How People Make Buying Decisions
Read this chapter, which discusses consumers' decision-making process and examines the situational, personal, psychological, and societal factors influencing their buying decisions.
Factors That Influence Consumers' Buying Behavior
Situational Factors
Have you ever
been in a department story and couldn't find your way out? No, you
aren't necessarily directionally challenged. Marketing professionals
take physical factors such as a store's design and layout into account
when they are designing their facilities. Presumably, the longer you
wander around a facility, the more you will spend. Grocery stores
frequently place bread and milk products on the opposite ends of the
stores because people often need both types of products. To buy both,
they have to walk around an entire store, which of course, is loaded
with other items they might see and purchase.
Store locations
also influence behavior. Starbucks has done a good job in terms of
locating its stores. It has the process down to a science; you can
scarcely drive a few miles down the road without passing a Starbucks.
You can also buy cups of Starbucks coffee at many grocery stores and in
airports - virtually any place where there is foot traffic.
Physical
factors that firms can control, such as the layout of a store, music
played at stores, the lighting, temperature, and even the smells you
experience are called atmospherics. Perhaps you've visited the office of
an apartment complex and noticed how great it looked and even smelled.
It's no coincidence. The managers of the complex were trying to get you
to stay for a while and have a look at their facilities. Research shows
that "strategic fragrancing" results in customers staying in stores
longer, buying more, and leaving with better impressions of the quality
of stores' services and products. Mirrors near hotel elevators are
another example. Hotel operators have found that when people are busy
looking at themselves in the mirrors, they don't feel like they are
waiting as long for their elevators.
Not all physical factors are
under a company's control, however. Take weather, for example. Rainy
weather can be a boon to some companies, like umbrella makers such as
Totes, but a problem for others. Beach resorts, outdoor concert venues,
and golf courses suffer when it is raining heavily. Businesses such as
automobile dealers also have fewer customers. Who wants to shop for a
car in the rain?
Firms often attempt to deal with adverse
physical factors such as bad weather by offering specials during
unattractive times. For example, many resorts offer consumers discounts
to travel to beach locations during hurricane season. Having an online
presence is another way to cope with weather-related problems. What
could be more comfortable than shopping at home? If it's raining too
hard to drive to the GAP, REI, or Abercrombie & Fitch, you can buy
products from these companies and many others online. You can shop
online for cars, too, and many restaurants take orders online and
deliver.
Crowding is another situational factor. Have you ever
left a store and not purchased anything because it was just too crowded?
Some studies have shown that consumers feel better about retailers who
attempt to prevent overcrowding in their stores. However, other studies
have shown that to a certain extent, crowding can have a positive impact
on a person's buying experience. The phenomenon is often referred to as
"herd behavior".
If
people are lined up to buy something, you want to know why. Should you
get in line to buy it too? Herd behavior helped drive up the price of
houses in the mid-2000s before the prices for them rapidly fell.
Unfortunately, herd behavior has also led to the deaths of people. In
2008, a store employee was trampled to death by an early morning crowd
rushing into a Walmart to snap up holiday bargains.
Social Situation
The social situation you're in can significantly affect your purchase behavior. Perhaps you have seen Girl Scouts selling cookies outside grocery stores and other retail establishments and purchased nothing from them, but what if your neighbor's daughter is selling the cookies? Are you going to turn her down or be a friendly neighbor and buy a box (or two)?
Video Clip
Thin Mints, Anyone?
Are you going to turn down cookies from this cute Girl Scout? What if she's your neighbor's daughter? Pass the milk, please!
Companies
like Pampered Chef that sell their products at parties understand that
the social situation makes a difference. When you're at a friend's
Pampered Chef party, you don't want to look cheap or disappoint your
friend by not buying anything. Certain social situations can also make
you less willing to buy products. You might spend quite a bit of money
each month eating at fast-food restaurants like McDonald's and Subway.
Where do you take someone for your first date? Some people might take a
first date to Subway, but other people would perhaps choose a restaurant
that's more upscale. Likewise, if you have turned down a drink or
dessert on a date because you were worried about what the person you
were with might have thought, your consumption was affected by your
social situation.
Time
The
time of day, time of year, and how much time consumers feel like they
have to shop affect what they buy. Researchers have even discovered
whether someone is a "morning person" or "evening person" affects
shopping patterns. Have you ever gone to the grocery store when you are
hungry or after pay day when you have cash in your pocket? When you are
hungry or have cash, you may purchase more than you would at other
times. Seven-Eleven Japan is a company that's extremely in tune to time
and how it affects buyers. The company's point-of-sale systems at its
checkout counters monitor what is selling well and when, and stores are
restocked with those items immediately - sometimes via motorcycle
deliveries that zip in and out of traffic along Japan's crowded streets.
The goal is to get the products on the shelves when and where consumers
want them. Seven-Eleven Japan also knows that, like Americans, its
customers are "time starved". Shoppers can pay their utility bills,
local taxes, and insurance or pension premiums at Seven-Eleven Japan
stores, and even make photocopies.
Companies worldwide are aware of people's lack of
time and are finding ways to accommodate them. Some doctors' offices
offer drive-through shots for patients who are in a hurry and for
elderly patients who find it difficult to get out of their cars.
Tickets.com allows companies to sell tickets by sending them to
customers' mobile phones when they call in. The phones' displays are
then read by barcode scanners when the ticket purchasers arrive at the
events they're attending. Likewise, if you need customer service from
Amazon.com, there's no need to wait on the telephone. If you have an
account with Amazon, you just click a button on the company's Web site
and an Amazon representative calls you immediately.
Reason for the Purchase
The
reason you are shopping also affects the amount of time you will spend
shopping. Are you making an emergency purchase? What if you need
something for an important dinner or a project and only have an hour to
get everything? Are you shopping for a gift or for a special occasion?
Are you buying something to complete a task/project and need it quickly?
In recent years, emergency clinics have sprung up in strip malls all
over the country. Convenience is one reason. The other is sheer
necessity. If you cut yourself and you are bleeding badly, you're
probably not going to shop around much to find the best clinic. You will
go to the one that's closest to you. The same thing may happen if you
need something immediately.
Purchasing a gift might not be an
emergency situation, but you might not want to spend much time shopping
for it either. Gift certificates have been popular for years. You can
purchase gift cards for numerous merchants at your local grocery store
or online. By contrast, suppose you need to buy an engagement ring.
Sure, you could buy one online in a jiffy, but you probably wouldn't do
that. What if the diamond was fake? What if your significant other
turned you down and you had to return the ring? How hard would it be to
get back online and return the ring?
Mood
Have
you ever felt like going on a shopping spree? At other times wild
horses couldn't drag you to a mall. People's moods temporarily affect
their spending patterns. Some people enjoy shopping. It's entertaining
for them. At the extreme are compulsive spenders who get a temporary
"high" from spending.
A sour mood can spoil a consumer's desire
to shop. The crash of the U.S. stock market in 2008 left many people
feeling poorer, leading to a dramatic downturn in consumer spending.
Penny pinching came into vogue, and conspicuous spending was out. Costco
and Walmart experienced heightened sales of their low-cost Kirkland
Signature and Great Value brands as consumers scrimped". Saks
Fifth Avenue wasn't so lucky. Its annual release of spring fashions
usually leads to a feeding frenzy among shoppers, but spring 2009 was
different. "We've definitely seen a drop-off of this idea of shopping
for entertainment," says Kimberly Grabel, Saks Fifth Avenue's senior
vice president of marketing. To get buyers in the shopping mood, companies
resorted to different measures. The upscale retailer Neiman Marcus began
introducing more mid-priced brands. By studying customer's loyalty
cards, the French hypermarket Carrefour hoped to find ways to get its
customers to purchase nonfood items that have higher profit margins.
The
glum mood wasn't bad for all businesses though. Discounters like
Half-Priced books saw their sales surge. So did seed sellers as people
began planting their own gardens. Finally, what about those products
(Aqua Globes, Snuggies, and Ped Eggs) you see being hawked on
television? Their sales were the best ever. Apparently, consumers too
broke to go on vacation or shop at Saks were instead watching television
and treating themselves to the products.