This is “Decision Making”, section 4.4 from the book Advertising Campaigns: Start to Finish (v. 1.0).
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After studying this section, students should be able to do the following:
Understanding how we make decisions helps advertisers choose the right message to send at the right time.
The decision to purchase a product has five stages, each of which implies the need for a different type of communication. The five stages are:
Figure 4.8 The Decision-Making Process
Advertisers can help consumers through the decision-making process. Some ads intend to create awareness that a need exists (it was an adman, not a doctor, who invented the term “halitosis” to describe bad breath!). Other ads provide information to facilitate information search and comparisons. Progressive Insurance, for example, lets customers shop online and compare prices among major competitors. The company does not promise to have the lowest price, but it makes clear what its price is in relation to the competition. This is particularly helpful in the “evaluation of alternatives” stage as customers compare different competitive offerings.Nancy Michael, “Customer Loyalty: Elusive, but Critical,” ABA Banking Journal 99, no. 2 (2007): 42.
The people who make the purchase decision can be individuals, couples, families, or businesses. In businesses, the “buying centerA group of people in a business who are involved in the decision-making process for corporate purchases.” (a group of people tasked with making purchase decisions on behalf of the organization) typically is involved in the decision-making process because organizational decisions are more complex. Each member of the buying center plays a different role in the process, which may require different types of messages. For example, new corporate computer software might advertise how it enhances business performance for managers while it emphasizes technical sophistication for IT professionals.
SS+K’s client, the Blue Cross and Blue Shield Association, has many audiences ranging from individuals to small businesses to national accounts (companies with over five hundred people, sometimes in multiple states). The agency recently designed a campaign to address the needs of national accounts business decision makers (the HR or corporate group in charge of making insurance decisions for a corporation.)
Ariba, a provider of procurement and spending management software and services, sells to organizations such as banks. Ariba has learned that marketing to banks means understanding their priorities and challenges. Banks tend to be more conservative in their software purchase decisions because buying software often requires being able to roll it out across different branch locations. Purchasing agents at banks want to know if the manufacturer will support the product across locations and if it can be scaled quickly to other regions or departments. They want to know that the software will improve their bottom line and that others have deployed it successfully.Roger Slavens, “Understand Client Priorities, Then Deliver Solutions” B to B, March 12, 2007, 24.
Interview people whose jobs include the responsibility of purchasing items for their businesses to use. Ask them how they go about making these decisions, and what information sources they consult in this process. How important are criteria such as brand name, reputation, cutting-edge features, and color?
MotivationThe processes that lead people to behave as they do. refers to the processes that lead people to behave as they do. For example, why do consumers decide to buy a timeshare vacation property? An industry survey found that the most important reasons to purchase a timeshare include flexibility, low cost, a desirable resort, and the certainty of quality accommodation.Beverley Sparks, Ken Butcher, and Grace Pan, “Understanding Customer-Derived Value in the Timeshare Industry,” Cornell Hotel & Restaurant Administration Quarterly 48 (February 2007): 28. It’s important that advertisers understand what drives customers so they can design messages to address central concerns rather than minor ones.
One important driver is a consumer’s extent of involvementThe amount of thought and effort a consumer puts into a buying decision. with a brand or product category. It’s tempting to assume that we put more thought into purchases that are expensive, but this isn’t necessarily true. We might be motivated to put a great deal of thought and effort into choosing even a relatively cheap product if we feel our choice will reflect something about ourselves to others.
And involvement often is a function of the product’s degree of perceived riskThe potential physical, financial, or social drawbacks that a consumer can imagine in making the wrong buying decision.:
Hershey or Nestlé? Coke or Pepsi? Charmin or Bounty? Lil Wayne or Usher? People don’t have the time or desire to ponder endlessly about every purchase. HeuristicsShortcuts or mental “rules of thumb” that people use in making a decision. are shortcuts or mental “rules of thumb” that we use when we make a decision—especially when we choose among products in a category where we don’t see huge differences or if the outcome isn’t do or die. These rules simplify the decision-making process by making it quick and easy. Common heuristics include these:
Some purchases matter to us a lot more than others, so it makes sense that we don’t devote the same amount of attention to advertising for every idea, product, or service. An advertiser needs to appreciate how involved her customers are likely to be; we are more likely to search out detailed information for products that are highly involving to us. In other cases we tend to fall back on heuristics, “rules of thumb” that reflect well-learned rules (such as “it must be better if it costs more”).