3: Developing Customer Insights
The author relates John Howard's model of decision making - a process that involves problem recognition, information search, evaluation of alternatives, purchasing decisions, and after purchase evaluation. Howard's model suggests that a "limited" process is sometimes used, which involves minimal alternative evaluation and no after-purchase evaluation, and a "habitual" process that involves limited information search, no consideration of alternatives, and no after-purchase evaluation.
Any decision-making process begins by problem recognition, which involves the realization that some action must be taken to achieve a desired future state (either to gain a benefit or maintain current status).: "I'm running out of toothpaste" or "I lack the skills needed to gain better employment" both reflect the recognition of a need that the customer will seek to fill.
Once the problem is recognized, the subject does an information search to determine what course of action to take. In some instances, this is superficial and internal (in the toothpaste example, the decision will be to buy a familiar brand, probably the same one, at the supermarket). In others, it can be quite complex (the need for "skills" requires research to determine exactly what is needed and where it might be obtained).
Information search can also be impacted by experience (if the individual has solved the same problem satisfactorily, they will generally take the same course), knowledge (the individual will be inclined to make ad decision based on what they already know versus having to hunt for new information), and the impact/expense (the greater the consequences and cost, the more effort will go into researching solutions).
Considerable effort is put into brand marketing to ensure that the customer is aware of a product for the time when they will need it - gaining "top of mind" recognition to begin with, and making information easy to obtain if a research effort is needed.
Provided the decision is not automatic, and that information search has yielded multiple alternatives, the subject considers the options with an eye toward the effectiveness of a solution and the cost/difficulty of obtaining it. At this point, a purchase decision is made, and the customer obtains the solution.
Howard suggests that after-purchase evaluation of whether the solution satisfied the need is present only in intensive decision-making - however, it occurs in the wake of any decision, though it seldom is a formal process: the customer recognizes that the solution did, or did not, meet their needs. This assessment is critical to later decisions to repurchase the same solution when faced with the same problem, or to recommend the solution to others.
In traditional marketing, after-purchase evaluation is largely ignored - once a sale is made, the vendor has gotten what they want from a customer, and it's presumed that they now "own" the customer unless a competitor acts to draw them away. But companies are coming around to the notion that it is the customer's experience of the product, in itself, that can cause them to seek another brand in future or to remain loyal to the brand they previously purchased.
Hence, "relationship marketing" begins after the purchase, and is intended to ensure the customer is satisfied and remains engaged with the vendor until the need arises for them to purchase again, and as a means to galvanize the customer against competitor's attempts to weaken their loyalty.
INFLUENCES ON CUSTOMER DECISION MAKING
The author returns to Maslow's Hierarchy as a method of exploring customer motivations, and provides some examples of marketing messages targeted to specific levels of need. (EN: this has been done so often it's not longer of interest, and the author has nothing new to add.)
The author explores the "perception process," with the suggestion that simply transmitting a message to a market does not mean it has been received. In the example of a television ad, your commercial may be broadcast, but a person may not be watching. Even if their set is tuned to the channel, they may have left the room, or turned their attention to something else during the commercial break. Even if they happen to be watching, they may not give it their "full attention," sufficient to remember the content or even have a vague recollection of it.
In this regard, understanding the media consumption of the target market is critical.
There is a stray note about altering the characteristics of a message to aid in the perception process: a television ad that is louder than surrounding programming, print ads that use clashing colors, internet ads that obstruct desired content. The notion is that such tactics will get attention, but will often annoy consumers.
These have always been common problems of push marketing, but the problem is even more pronounced to an audience that is bombarded with commercial messages, and which often chooses to avoid or ignore them. In pull marketing, it is acknowledged that the customer controls the information he receives, and will consult multiple sources for information before making a purchase decision
The notion of "selective comprehension" suggests that a customer will interpret any message, based on their current perceptions, and integrate the information into that which they already know and/or believe. While the author cites no evidence, he suggests there is "little doubt" that a person is more likely to pay attention to message that is speaks to existing attitudes, motivations, and issues.
In instances where there are negative attitudes about a brand, marketing efforts focus on changing the customer's attitude toward the product. The author suggests that sponsorship and support of popular causes (the example given are the slough of companies that support breast cancer research) as methods to create a positive association with a brand.
There is also the problem of retention: in many instances, a customer receives information he is unable (or not inclined) to act upon immediately, and so must store any information for future use. Typically, when a customer decides to make a purchase, they choose from the "evoked set" of brands they associate with a given product category.
It is also noted that, rather than attempting to improve customer attitudes about its own brand, companies may attempt to denigrate competing brands instead. This is often the tactic of comparative advertising - which overtly attempts to demonstrate a company's "superiority" over a brand that customers currently prefer. (EN: the author does not mention a significant factor, in that a small company with a little-known brand can get a significant boost in awareness from comparative advertising, especially if the other brand responds.)
Another loose note: many online groups and communities are focused on people with similar issues, lifestyle choices, or interests, and a considerable amount of discussion tends to be about products and brands associated to the community's topic of interest.
HOW CONSUMERS LEARN
In applying an attitude-change initiative, marketers are attempting to "teach" customers about the brand. To do so, it's necessary to understand the way in which consumers learn.
Classical Conditioning is an attempt to create an association between two unrelated stimuli, the most common example being Pavlov. The notion is that, by repetition of an advertising message, customers will accept the association the marketer is attempted to make with a brand.
There is some sense that much conditioning is done on the subliminal level. The use of a celebrity spokesperson causes the subject to transfer the positive feelings they have about the spokesperson to the product, or the depiction of a product in a clean middle-class home causes the subject to associate the product with a comfortable and respectable setting, or the use of a popular song causes the subject to associate the product with popularity.
The author concedes that, when classical condition does work, it can work very well - but especially in the case of celebrity endorsement, there can be howling failures (when the celebrity associated to a product gets involved in a scandal, that harms the brand as well).
Another form of conditioning, operant conditioning, involves learning through reinforcement. In this regard, the author speaks of "reward" programs at supermarkets that tie promotions to past behavior. (EN: it's not clear what he's getting at, and the connection of sales promotion to operant conditioning seems tenuous at best. The notion that participating in a program gives customers "customized" deals based on their previous behavior is not closely enough related to "reward" for it to be considered a form of operant conditioning - so I'd say he's stretching it a bit thin.)
The notion of "vicarious learning" implies that a person can learn by watching another person to whom they can relate. This is the theory behind commercials that demonstrate or provide testimonials, such that the subject gets the impression that the product is valued by people who are "like me." (EN: again, the author is slightly off-base, in that what he describes is not learning, but association of a product with certain qualities of character. As such, this is still conditioning, not learning per se.)
ENVIRONMENTAL INFLUENCES
The author asserts that the customer's environment has a strong influence over their choices in the marketplace - primarily, the groups to which a person belongs or aspires to belong have a strong influence over their behavior, both as individuals and as consumers.
The author mentions culture, subculture, and class as environmental factors (EN: but he botches the definitions horribly and draws no connection to decision-making.) The author then mentions reference groups: the groups to which the individual aspires to belong, the groups the individual wishes to resist being assigned to, and the groups in which he is "formally" a member. The author also mentions that a "family" is another kind of group, which a person does not choose for themselves, but to which they nonetheless belong.
There's a fair amount of detail, which fundamentally comes down to this: a person will act in certain ways to identify themselves as belonging to certain groups or setting themselves apart from others. Some of these actions involve the consumption of goods.
There is also more direct influence in certain groups. Especially in terms of families, couples, and even roommates, there is group decision-making for certain items. He mentions the phenomenon of people who live together for the first time (college roommates, newlyweds) and the effect this has on decision-making when they live in proximity to another person who has different brand preferences, and the negotiation between them to arrive at a decision as to which brands to keep.