How do consumers decide to buy our products?

1. How do consumers decide to buy our products? Dr. Marv Khammash

2. Consumer Behaviour provides the answer… • Consumer behaviouris the study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.

3. So what do we need to know?How does it affect marketing? 10 Golden Lessons in Consumer Behaviour

4. Lesson 1:Consumers are problem solvers Purchases are responses to problems consumers face. After realisingthat they want to make a purchase, they go through a series of steps in order to make it. It can seem automatic or natural. It’s normally complicated by consumer hyperchoice.

5. Lesson 2: Consumers think differently • Rationally: integrating as much information as possible with what they already know about a product, weighing pluses and minuses of each alternative and arriving at a satisfactory decision. • Externally: buying products based on environmental cues, such as a sale or promotion. • Experientially: buying products based on totality of their appeal. • Momentarily: buying beyondsatisfaction of their needs.

6. Lesson 3: Consumers act differently Routinely: making decisions with little to no conscious effort. Partially: not as motivated to search for information or to evaluate rigorously. They use simple decision rules to choose. Extensively: feel that eventual decision carries a degree of risk.

7. Lesson 4: Consumers want more stuff Consumers recognise the difference between current state and ideal state. When the ideal state moves upward, they recognise an opportunity. When the actual state moves downward, they recognise a need.

8. Lesson 5: Consumers search for more info • Pre-purchase: involved with the purchase to make better decisions. • Ongoing: involved with the product to build a bank of info for the future. • Internal: scanning memory to gather product alternative information. • External: obtaining information from ads, retailers, catalogs, friends, family and web sites. • Deliberate: existing product knowledge obtained from previous information search or experience of alternatives. • Accidental: exposure over time to observations of others.

9. Lesson 6: Consumers are irrational…(sometimes) • Some consumers avoid external search, especially with minimal time to do so. • Others spend more time doing external search, especially for symbolic items. • Some consumers select familiar brands when decision situation is ambiguous (i.e. Brand Switching). • Others have a desire to choose new alternatives over more familiar ones (i.e. Variety Seeking).

10. Lesson 7: Consumers are biased…(most of the times) • Consumers frame problems in terms of gains/losses and this influences their decisions (i.e. Mental Accounting). • Consumers are reluctant to waste something they have paid for (i.e. Sunk-cost Fallacy). • Consumers assessment of risk differs when they face options involving gains versus those involving losses (i.e. Prospect Theory).

11. Lesson 8: Consumers try to avoid risk

12. Examples of perceived risk Social risk and Physical risk

13. Lesson 9: Consumers can NOT remember every single brand • Consumer usually don’t seriously consider every brand they know about. • They often include only a surprisingly small number of alternatives in their choice set (evoked set). • Marketers must focus on getting their brands in consumers’ choice set. • Consumers often do not give rejected brands a second chance.

14. Lesson 10: Consumers use known knowns to know about the unknown knowns! • Consumer evaluate products in terms of what they already know about a (similar) product. • Choice-set products usually share similar features • When faced with a new product, consumers refer to existing product category knowledge to form new knowledge. • Marketers want to ensure that their products are correctly grouped in the right category in the knowledge structure.

15. Thanks for your attentionPlease feel free to ask Qs Or send me an e-mail to: m.khammash@bangor.ac.uk