Hi guys, Mark here with Wolters World and today we're gonna talk
about consumer behavior.
Now, I have my consumer here, Trouble, you can see we have a
nicely named Trouble here, we're trying to decide what does this
baby want.
He just woke up so he's not very happy.
He's hungry, look at him.
He's like, erghh, so what's he going to take?
What's he going to go for first?
He goes for the paci because he's tired, and you know he's just waking
up.
But then, he goes for a ladle, he hasn't had breakfast, he goes
for a ladle, what's going on?
And that's the kind of frustration that marketers have
when they try to understand consumer behavior, because you
think, oh, well, the baby just woke up, he should be hungry.
So he probably is going to want to drink the bottle,
unfortunately, doesn't always work that way.
We saw he went for the paci first, and we might think, well,
that makes sense. Because he's a baby and they like the paci.
But a ladle? Why would he want a ladle? Is he going to go
cook his own food? Or just want something to play with?
And we see it's each situation is different.
And the more you know, your customers, the more you know,
your consumers, the better you can plan things. Okay?
For example, for me, I know this consumer very well. I mean, it's
like I've been there since he was born.
And I know he loves his his red pasi, but if I put a different
pasi there, it might not have work.
So I was giving him something he wanted.
Remember, the need red need recognition, he likes red, so I
give that to him.
But then, I also know his purchasing behavior, in terms of
I know what he goes for first, and his favorite toys are
spatulas, and ladles, and stuff like that.
So I had a rough idea that would be there.
So I knew that it could be a toy for him.
Also, I know how he buys in terms of what he likes to eat.
He doesn't like to drink or eat first thing in the morning.
So it takes some time.
So eventually, oh, my little man will do that.
And look, he's finished with the stuff.
And so he brought back his ladle, and his paci.
So I hope that helps you get a rough idea when you're trying to
understand consumer behavior.
I'd like to thank our, I'd like to thank, aw, I'd like to thank my helper
here, Mr. Trouble, aw, he loves his daddy.
Oh, I can't say he's a, an unnamed source.
Yeah, go go get it, go get it. And I hope that gives you a
rough idea of consumer behavior, how you know, you really can't
tell.
But you can do your best guess by doing your best research.
And that's why you need to know the decision making process of
consumers because then you have a better idea of how can I make
them happy?
How do I make sure they're going to do that?
Because I'm sure not too many people were thinking ladle when
they're thinking of a hungry morning baby.
So we've seen what Trouble did, okay, but let's go through the
decision making process so can help us better understand not
just the baby,
but consumers in general. Because consumers do go through
a five step process when they are looking to buy stuff.
One, need recognition. Two, information search. Three,
alternative evaluation.
Four, the purchase a product. Then five, there's post purchase
behavior.
And so we're going to go through each of these.
Now, the first step, when it comes to the decision making
process is need recognition.
People have to realize that they need something, you know, the
baby, we looked at hands like what we thought, well, he
probably be hungry, because he needs to eat in the morning.
But again, we never know what actually happens, but we see
there's going to be a need.
So we could offer him milk,
and maybe he'll go there. But the thing is, people have two
basic needs. One, you have functional needs, okay?
And functional needs is we have to get by something or hasn't it
actually serves a purpose.
So if I'm hungry, I need to have something that's going to fill
me up.
So for a baby, yes, milk will do it.
But then you have the second kind of need, which is called a
psychological need.
And the psychological need are these things that I need
something to makes me feel better.
Okay, so you look at those two different kinds of needs.
Now, the thing is what we as marketers, there's differences
between needs and wants.
And you have to determine that because the needs the things you
have to have to survive, and the wants are the things you'd like to
have.
And a job as a marketers is to turn those wants and to make them feel
like it's a need.
So you have to get it, you have to get the newest iPhone, you
have to get the newest Mac, all these kind of things.
Okay, so that's the first thing, need recognition.
Now, the second part of the decision making process is
information search, because consumers have to figure out
well, what should I buy?
And the things is, if you don't know, of course, you're going to search
more.
But if I say, hey, where do you want to go to dinner tonight?
You're going to think in your head, what are my favorite
restaurants?
Let's go there.
Thinking in your head, that's an internal search.
But let's say you're going to a new town.
You know, I haven't been in New York in years.
So if I'm going to go there to eat, maybe I'm going to look
online and see what I should go and eat.
Okay, that would be an external search. If you go and search
things outside your brain, that's an external search.
And the when people look for information, there's a few
things that kind of influence how much information they're
going to search for.
One, is the perceived cost of the search versus the perceived
benefit.
So is it worth my time and effort to research what the best
candy bar is?
Or should I just go to the vending machine and buy it, I
just go to the machine see a Snickers, hey, that's fine.
I'm not going to do too much research because there's not
much risk to it.
If I don't like the Snickers. I've only lost $1.
But if it's going to have more risk, then I'm going to put that
it will, of course, have more benefit. If I do my research, like I'm going
to buy a house, then people do more information search for it.
Okay? Other thing that influences the amount of search
they do is what we call locus of control.
How much do people feel like they're in control of things.
So if I search more, like, for example, let's say you're
picking stocks, well, if you're searching this, yeah, I can find
the best stock, well, you have an internal locus of control,
you're the one that knows, hey, if I do the research, I'll
probably pick the best one, I'll pick, you know, I'll beat the market.
That's internal.
Some of you have external locus of control, you feel like no matter
what I do, I'm not going to get the best stock.
So I'm just gonna buy a mutual fund.
And the last thing that kind of influences is the amount of
risks they're taking on.
Because if we think about it, more financial risks, the more
expensive it is, probably the more information you're going to
search, okay? You don't just walk out and buy a house that cost
$200,000.
But you will just walk out and buy stickers that cost $1.
Okay, another thing, you might look at a safety risk, okay? If
you're going to be bungee jumping, you're probably going,
or skydive, you're gonna look and see, what's the safety
record of these guys? Or the doctor is gonna have surgery,
what's their survival rate of surgery, you know? That safety
risk is going to come in there. Also, you have psychological
risk, social risk.
You know, there's all kinds of things out there that people
kind of look at in terms of risks that will influence how
much is sorted.
So the more risk we have in our decision, the more research and
the more information we're going to be searching for.
Okay, so now we're on the third step, alternative evaluation.
Now, when we have alternative valuation, sometimes people you
know, if I say, what's the difference between McDonald's
and Burger King?
And when you say, well, one is fast, and one's got the Whopper,
those are determinant attributes, kind of
characteristics that make the difference between two different
alternatives.
And that's what you start to do you look at these, well, what
can I do with these alternatives?
What are they worth for me? Well, how are they different?
So if we look at the baby, he had a pacifier. So what's that
for him? That's soothing.
Next, he had a bottle. What's the bottle for him? That
alternative? What's special about that?
Oh, it fills up my belly. So I'm full. And the third alternative?
The ladle.
What does that do for me? I can whack it around and make lots of
sound and have fun with it.
So those are the three arrays, he's kind of looking at, these three
options.
Okay? Now, for customers, what they do is they look at those
alternatives out there.
Okay, whether it's all, usually you don't look for everything, you
have certain ones you're looking for.
And you kind of ranked in between the two.
So if I'm looking to buy a tablet, okay, I can get an iPad,
I can get a nook, I can get a Kindle, I can get something from
Toshiba, I can get a Nexus, there's all kinds of things out
there.
And you start to say, what's the different ones? Well I say, well, Apple,
well, that one has all the cool apps and all these things,
but it's $599. This one is kind of expensive, and it has all those
things.
But the Kindle Fire HD is $199.
But it's not as powerful, not as many things but it's so much cheaper.
And people start comparing things. So you see them
comparing the different alternatives.
And some of the main things people do determine alternatives
for obvious are price.
So if you think about it, you're going to go see your boss,
you're going to buy your boss a $3 bottle of wine, or you're
gonna buy your bottle, a $50 bottle of wine.
Probably the 50 because even if you're not a wine connoisseur,
you know, if I spend 50 bucks, it's probably going to be a good
bottle of wine.
That's one thing. Another thing is brand.
You know, some people it doesn't matter.
They say hey, you know, I love Macs, I love Apple, I'm gonna buy
anything Apple. If you know that you can price it that way, your
alternatives,
you know, there's less alternatives for those people
because they're brand loyal. Coke, Pepsi have these same kinds of
things.
That's why they put a lot of advertising out there to get
people to like their brand associated with it.
So it limits their alternatives, because they're not willing to
switch to a Pepsi or a Coke depending on what they like.
And then, the last one is product presentation.
If you make yourself look really pretty, and all these kind of
things, people are more willing to buy. Think about it, when you
go to a restaurant.
Okay, and you're so full, you know, it takes a lot to get me full, but
you get so full, you're like, oh, I can't eat anymore and they're like, oh, would you like dessert?
No, I'm fine. But then they push that dessert cart by, don't you
go, oh, ma-ma-maybe I maybe I can have a piece of red red velvet
cake.
Oh, maybe I can have that. And you see that
because the presentation.
So those things can influence the alternative valuation, what
I'm going to go for.
And then, we have number four, the purchase, the actual
transaction, people actually buy the product, use the product,
these kind of things.
Yes, our job is done.
No. When you sell your product and it's been purchased, that's
not the end of the decision making process because people
buy products again and again, you don't buy one home, you'll
buy another home probably later in your life.
You don't buy one car, you bought a car every 10 years.
And if we're sellers and we stopped caring at the purchase,
they'll never come back again.
Okay? And that takes us to the fifth part,
The post purchase. Okay? Now, in the post purchase, we obviously
want to develop customer satisfaction.
So we're going to do things to make sure that customers are
right.
But how do we do that?
And one of the things would seem silly, like you think, well, I
have to promote my product so much and make it look so great
so people buy it. But if you overhype your product, people
will be disappointed.
Okay? So you want to take that into account.
Another thing you want to look at is, you want to look at, you know,
kind of demonstrating your product, so that people see how it's
really supposed to work.
Because you've ever had a product where you're kind of
like, hey, yeah, what's wrong here?
Like, oh, if you do this, I'm like, oh, so I can do this smart
time on my phone, I didn't know, oh, thank you. You help people
learn how to use their product better, and then they become
more happy.
And then you build customer loyalty. And then they come back
and you make more money off of all kinds of stuff.
So there's a customer satisfaction side of things, you
know? Think long term of your product, your customers.
Another thing to look for in the post purchase behavior is what's
called cognitive dissonance.
Or maybe you've heard it called buyer's remorse.
I mean, think about it. Have you ever spent a lot of money buying
an Xbox or a car or a house and you're like, oh, maybe we spent too much
money on that.
Oh, I don't know, was that the right choice? Or if you go out
to a bar, and you had that last beer?
And the next morning, you're like, oh, I don't know if that
10 Yeager Meister was a good idea, oh. Okay?
Those kind of things are buyer's remorse, I spent the money, now, I
feel bad about it.
We as marketers have to make sure that people don't have that
cognitive dissonance.
They don't feel bad about the purchase. So what do you do?
You send out the customer cards, you check up with them.
So you're enjoying your product?
Hey, look at all these awards we've won, the version of the
Honda are the Ford that you bought.
Now, as, you know, JD Power, the Car of the Year, don't you feel
good?
Oh, it's getting accepted. So people feel better about their
purchase.
And you have to work with these things.
Okay? But if also in the post purchase thing, you have what
are called, you know, unhappy customer, unsatisfied customers,
whatever.
And the Internet has allowed people to voice their concerns a
lot more.
And as a company, you need to be out there.
That's why you have the social media, check out a social media
video to help you with that.
Have your social media help deal with customer relationships,
good and bad, don't ignore them, learn from them, because you can
turn some of your most pissed off customers into some of your
biggest proponents because you help them fix their problems.
Okay? So I hope that helps, gives you an idea of the consumer
decision making process.
First, you have need recognition, and to realize there's something
they need. Two, the information search, they go and find out
what they're going to, what they, what they need.
This is where we market and stuff like that.
Three, alternative evaluation, how do they choose between the
two, or three or 20 options. Four, they make their purchase.
And five, you work on developing good relationships in the post
purchase side of things.
Now, we look at our baby and you kind of go, oh, where does this
all work? Well, you need recognition, I knew he would
either be hungry or tired, or want to play, those are the three
needs a baby pretty much has sleep, eat, happiness.
Information search?
Well, what's he going to do? Well, I lay the the three
options out in front of him.
So he said, oh, okay, I have one of these three things.
That's what I got. And if you noticed, one of his options was
to come back to dad and give him a big hug.
Yeah, that's something else out there, we're not even thinking
about that.
Then, you look at the purchase.
That's when he went in for the buy. So hewent for the pasi.
And why did he do that? I talked about that. He just woke
up.
So it soothes him, and then he wanted to play. And then, post purchase
behavior.
What can we do to make him more happy, hey, we give him a big
hug and make him feel better.
Okay? Now, when you have customers, there's sometimes
they're not that simple.
But if we understand their decision making process, where we
could influence it, it could help us make more money and do a
better job as marketers.
So I hope that helps. If you want to learn more about
marketing, please check us out our website at
www.woltersworld.com.
And please like and favorite this video.
And, well, don't worry about the baby. He got his milk in the
end.
So, bye. And now, right after we finish, he starts drinking because now
it's breakfast time.
And just so you know, no chumbas were injured in the filming of
this video.