Bob McCarron
In an earlier post, I discussed the different theories behind the way consumers make purchase decisions. Quick recap: The Utility Theory basically holds that consumers make decisions based on the expected outcomes of those decisions. Satisficing contends that consumers are willing to settle for something that is good enough and will move on. The Prospect Theory lists two main factors in a consumer’s decision-making process as Value and Endowment (the notion that my owning something is better than your owning that same item).
The development and exploration of a series of useful consumer decision-making strategies that can be exploited by marketers is the natural evolution of understanding these consumer theories.
For each product or service, marketers need to understand the specific decision-making process utilized by each consumer segment acquiring that product or service. If this is done, marketers can position their products and services in such a way that the decision-making process leads consumers to select them.
Some of the different strategies are:
Equal Weight Strategy Here, consumers allow a higher value of one attribute of a particular product to compensate for a lesser value of another attribute. For example, if a consumer is looking at buying a new car, a high value in gas mileage might compensate for a lower value in leather seating. This would lead the marketer to focus on the value of good gas mileage vs. the comfort aspect of leather seats. In this case, a consumer values all the attributes equally.
Weighted Additive Strategy An example of this strategy would be where a consumer places a higher value on specific attributes. So if they value gas mileage over anything else, usually the car with the highest MPG would win the day because they might place twice as much importance on that attribute as on anything else. Here the consumer ranks the value of attributes differently.
Elimination by Aspects This sets a cutoff value for the most important attribute, and allows all competing products that meet that cutoff value to go to the next attribute in the decision-making process.
Lexicographic Here the consumer evaluates the most important attribute, and, if a product is clearly superior to others, he/she will stop the decision-making process and select that product.
Frequency of Good and Bad Features Unlike the Lexicographic, in which one attribute plays the key role, here a consumer will evaluate all relevant attributes and simultaneously compare them. The product that has the most “good” features is the winner.
In summary, the idea of understanding consumer behavior is extremely complex. The fields of economics, psychology, sociology, and marketing are all connected and deeply involved when trying to understand how consumers make decisions. While much of this research is conducted in a controlled, laboratory type environment, the practical value to professional marketers is very high. By having a better understanding of how potential customers are making decisions, a marketer can tailor his or her marketing efforts accordingly.
About the Author:
Bob McCarron is the Financial Services and Insurance Practice Leader at SIGMA Marketing Group. Connect with Bob on , or follow him on .
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