How understanding buying behaviour can improve your profitability* Part one

Wouldn’t it be great to know your customers so well that you could predict how they will respond to a new product launch or marketing campaign? By understanding the basic decisions and actions of the people involved in buying and using your products you can.

‘Buying behaviour’ describes what, when, where and how customers purchase our offer. Contrary to popular belief, marketing is not about controlling these factors, but about understanding them and adapting our marketing mix to appeal to the target audience and satisfy their needs and wants.

With each and every purchase, we engage in decision-making behaviour. The time and effort we put into the decision-making varies from the situation we are in and from person to person. For example, my husband and I needed a sat nav. If I was buying it I’d have gone to somewhere like Halfords or Argos, seen what was available for around £100 and bought the nicest looking one. My husband however, spent hours researching products and reviews on the internet and came up with an elaborate scoring system that covered consumer rating, price, size of display, how you update the maps and much more… It took him a long time to make the decision but he was very satisfied with his purchase. I kind of like the sat nav too but clearly not as much as my husband does!

Dibb et al in their excellent book Marketing Concepts and Strategies, classify decision-making behaviour into three broad categories:

Routine response behaviour: this is when we buy something frequently that is low cost and low risk; it is almost automatic purchasing. Generally consumers will have a preferred brand for products that fall into this category of buying behaviour, but if the shop has run out, will have a number 2 or 3 brand in mind that is acceptable. I exhibit this type of behaviour when I buy: coffee, washing up liquid, washing powder, cereal, tights for my work outfits, milk…

Limited decision making: this is when we buy products occasionally and we need to find information about the product or brand because it’s unfamiliar to us. We will dedicate a moderate amount of time and effort to our information search and consideration. I exhibited this type of behaviour when I recently bought: a sound system, a new mobile phone, a bracelet as a gift…

Extensive decision making: this is when are buying something unfamiliar that is expensive or high-risk. We use lots of criteria to evaluate different brands or product variations and we take a long time to deliberate over the information. I exhibited this type of behaviour when I bought my house, my car, my last holiday…

Of course we are all aware of impulse buying which involves no planning at all. We’ve all been there- a powerful urge to buy something immediately overcomes us and we give in. Quite often we regret impulse buying for example, when I gave an NSPCC collector some cash to later realise I didn’t have enough money for my train ticket. Marketers can capitalise on impulse purchasing through point of sale promotions, for example by putting chocolate and chewing gum by the till in the supermarket.

So how can we use this knowledge to make our marketing more effective?

Thinking back to my sat nav example, I was displaying limited decision making but my husband was displaying extensive decision making. We are both target customers of Garmin, Tom Tom and the like so how could they adapt their marketing to appeal to our differing buying behaviour?

For me, it was all about having the product in the right place (Halfords or Argos), having effective point of sale that showed me how nice the sat navs looked and giving some limited information about performance. It was also hugely about the products being priced at what I was willing to pay.

For my husband, it was about having lots of information online and consumer engagement through product reviews. Third party endorsement can be a great tactic when extensive decision making is involved. For him it was less about price and all about the benefits of the product being communicated in an appealing, informative way.

Another thing to think about with this example is who had the final say. In our case it was my husband, so the ‘winning’ sat nav was the one whose marketing appealed to my husband’s buying behaviour.

Basic market research can provide great insights into what, when, where and how our customers buy our products so if you’re developing your marketing strategy, or trying to figure out why what you are doing currently isn’t working, I suggest you start with trying to understand buying behaviour.

Look out for part two of this blog that explores the decision-making process and the influences on consumers when they buy.

*This may be particularly useful for CIM Introductory Certificate students doing the March UCR paper.

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