The Buyer Decision Process for New Products

The Buyer Decision Process for New Products
The Buyer Decision Process for New Products


 
We have looked at the stages that buyers go through in trying to satisfy a need. Buyers may pass quickly or slowly through these stages and some of the stages may even be reversed.

Much depends on the nature of the buyer, the product, and the buying situation.

We now look at how buyers approach the purchase of new products. A new product is a good, service, or idea that is perceived by some potential customers as new.

It may have been around for a while, but our interest is in how consumers learn about products for the first time and make decisions on whether to adopt them. We define the adoption process as "the mental process through which an individual passes from first learning about an innovation to final adoption and adoption as the decision by an individual to become a regular user of the product

 

Stages in the Adoption Process

Consumers go through five stages in the process of adopting a new product:

1. Awareness. The consumer becomes aware of the new product but lacks information about it.

2. Interest. The consumer seeks information about the new product. 3. Evaluation. The consumer considers whether trying the new product makes sense.

4. Trial. The consumer tries the new product on a small scale to improve his or her estimate of its value.

5. Adoption. The consumer decides to make full and regular use of the new product. This model suggests that the new-product marketer should think about how to help consumers move through these stages. A manufacturer of large-screen televisions may discover that many consumers in the interest stage do not move to the trial stage because of uncertainty and the large investment. If these same consumers would be willing to use a large-screen television on a trial basis for a small fee, the manufacturer should consider offering a trial-use plan with an option to buy

Models of Consumer Behavior

 

Individual Differences in Innovativeness

People differ greatly in their readiness to try new products. In each product area, there are 'consumption pioneers' and early adopters. Other individuals adopt new products much later This has led to a classification of people into the adopter categories.

After a slow start, an increasing number of people adopt the new product.

The number of adopters reaches a peak and then drops off as fewer non-adopters remain.

Innovators are defined as the first 2.5 percent of the buyers to adopt a new idea (those beyond two standard deviations from mean adoption time); the early adopters are the next 13.5 percent (between one and two standard deviations); and so forth.

The five adopter groups have differing values. Innovators are adventurous: they try new ideas at some risk. Early adopters are guided by respect: they are opinion leaders in their community and adopt new ideas early but carefully.

The early majority is deliberate: although they are rarely leaders, they adopt new ideas before the average person.

The late majority is skeptical: they adopt an innovation only after most people have tried it.

Finally, laggards are tradition hounds: they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself. This adopter classification suggests that an innovating firm should research the characteristics of innovators and early adopters and should direct marketing efforts to them.

For example, home computer innovators have been found to be middle-aged and higher in income and education than non-innovators and they tend to be opinion leaders.

They also tend to be more rational, more introverted, and less social. In general, innovators tend to be relatively younger, better educated, and higher in income than later adopters and non-adopters.

 They are more receptive to unfamiliar things, rely more on their own values and judgment, and are more willing to take risks.

 They are less brand loyal and more likely to take advantage of special promotions such as discounts, coupons, and samples.

Manufacturers of products and brands subject to strong group influence must find out how to reach the opinion leaders in the relevant reference groups.

Opinion leaders are people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert influence on others. Opinion leaders are found in all strata of society and one person may be an opinion leader in certain product areas and an opinion follower in others. Marketers try to identify the personal characteristics of opinion leaders for the products, determine what media they use, and direct messages to them.

In some cases, marketers try to identify opinion leaders for their products and direct marketing efforts toward them.

This often occurs in the music industry, where clubs and radio DJs are influential. In other cases, advertisements can simulate opinion leadership, showing informal discussions between people and thereby reducing the need for consumers to seek advice from others. For example, in a recent ad for Herrera for Men cologne, two women discuss the question, 'Did you ever notice how good he smells?'

 The reason? 'He wears the most wonderful cologne.'4 " If Anna Flores buys a camera, both the product and the brand will be visible to others whom she respects. Her decision to buy the camera and her brand choice may therefore be influenced strongly by opinion leaders, such as friends who belong to a photography club.

 

Influence of Product Characteristics on Rate of Adoption

The characteristics of the new product affect its rate of adoption. Some products catch on almost overnight (Virtual Pets), whereas others take a long time to gain acceptance (Digital TV).

Five characteristics are especially important in influencing an innovation's rate of adoption.

 For example, consider the characteristics of the Minidisc in relation to the rate of adoption:

• Relative advantage: the degree to which the innovation appears superior to existing products. The greater the perceived relative advantage of using a Minidisc over a cassette - say, it does not tangle or lose quality - the sooner Minidiscs will be adopted.

• Compatibility: the degree to which the innovation fits the values and experiences of potential consumers. Minidiscs, for example, are highly compatible with an active lifestyle.

• Complexity: the degree to which the innovation is difficult to understand or use. CDs have already introduced customers to the benefits of digital recordings, so the idea no longer seems complex.

 • Divisibility: the degree to which the innovation may be tried on a limited basis. Minidiscs have a problem here. They require a big investment if people are to replace their in-home, in-car, and on-street music systems. And what if the technology changes again?

• Communicability: the degree to which the results of using the innovation can be observed or described to others. The benefits of Minidiscs are easy to demonstrate on a hi-fi system, but are the differences big enough to show in a car or a Walkman? Other characteristics influence the rate of adoption, such as initial and ongoing costs, risk and uncertainty, social approval, and the efforts of opinion leaders. The new-product marketer has to research all these factors when developing the new product and its marketing program.

Developing a Strategic Marketing Plan

 

Consumer Behavior Across International Borders

Understanding consumer behavior is difficult enough for companies marketing in a single country.

For companies operating in many countries, however, understanding and serving the needs of consumers is daunting. Although consumers in different countries may have some things in common, their values, attitudes, and behaviors often vary greatly.

International marketers must understand such differences and adjust their products and marketing programs accordingly.

Sometimes the differences are obvious. For example, in the UK, where most people eat cereal regularly for breakfast, Kellogg focuses its marketing on persuading consumers to select a Kellogg's brand rather than a competitor's brand.

In France, however, where most people prefer croissants and coffee or no breakfast at all, Kellogg's advertising simply attempts to convince people that they should eat cereal for breakfast.

Its packaging includes step-by-step instructions on how to prepare cereal. In India, where many consumers eat heavy, fried breakfast and 22 percent of consumers skip the meal altogether, Kellogg's advertising attempts to convince buyers to switch to a lighter, more nutritious breakfast diet.41 Often, differences across international markets are subtler.

They may result from physical differences in consumers and their environments. For example, Remington makes smaller electric shavers to fit the smaller hands of Japanese consumers; and battery-powered shavers for the British market, where some bathrooms have no electrical outlets. Other differences result from varying customs. Consider the following examples:

• Shaking your head from side to side means 'no' in most countries but 'yes' in Bulgaria and Sri Lanka.

• In South America, southern Europe, and many Arab countries, touching another person is a sign of warmth and friendship. In the Orient, it is considered an invasion of privacy.

 • In Norway or Malaysia, it's rude to leave something on your plate when eating; in Egypt, it's rude not to leave something on your plate. 

• A door-to-door salesperson might find it tough going in Italy, where it is improper for a man to call on a woman if she is home alone.42 Failing to understand such differences in customs and behaviors from one country to another can spell disaster for a marketer's international products and programs. Marketers must decide on the degree to which they will adapt their products and marketing programs to meet the unique cultures and needs of consumers in various markets. On the one hand, they want to standardize their offerings in order to simplify operations and take advantage of cost economies. On the other hand, adapting marketing efforts within each country results in products and programs that better satisfy the needs of local consumers.

The question of whether to adapt or standardize the marketing mix across international markets has created a lively debate in recent years

 

Summary

Markets have to be understood before marketing strategies can be developed. The consumer market buys goods and services for personal consumption. Consumers vary tremendously in age, income, education, tastes, and other factors.

Marketers must understand how consumers transform marketing and other inputs into buying responses.

 Consumer behavior is influenced by the buyer's characteristics and by the buyer's decision process.

Buyer characteristics include four main factors: cultural, social, personal, and psychological. Culture is the most basic determinant of a person's wants and behavior.

It includes the basic values, perceptions, preferences, and behaviors that a person learns from family and other key institutions. Marketers try to track cultural shifts that might suggest new ways to serve customers.

Social classes are subcultures whose members have similar social prestige based on occupation, income, education, wealth, and other variables.

People with the different cultural, subculture and social class characteristics have different product and brand preferences. Social factors also influence a buyer's behavior.

A person's reference groups - family, friends, social organizations, and professional associations - strongly affect product and brand choices. The person's position within each group can be defined in terms of role and status. A buyer chooses products and brands that reflect his or her role and status.

The buyer's age, life-cycle stage, occupation, economic circumstances, lifestyle, personality, and other personal characteristics and psychological factors influence his or her buying decisions.

Young consumers have different needs and want from older consumers; the needs of young married couples differ from those of retired people; consumers with higher incomes buy differently from those who have less to spend. Before planning its marketing strategy, a company needs to understand its consumers and the decision processes they go through.

The number of buying participants and the amount of buying effort increase with the complexity of the buying situation.

There are three types of buying decision behavior: routine response behavior, limited problem solving find extensive problem-solving.

 In buying something, the buyer goes through a decision process consisting of need recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior.

The marketer's job is to understand the buyers' behavior at each stage and the influences that are operating.

This allows the marketer to develop a significant and effective marketing program for the target market.

With regard to new products, consumers respond at different rates, depending on the consumer's characteristics and the product's characteristics.

Manufacturers try to bring their new products to the attention of potential early adopters, particularly those with opinion leader characteristics.

A person's buying behavior is the result of the complex interplay of all these cultural, social, personal, and psychological factors.

 Although marketers cannot control many of these factors, they are useful in identifying and understanding the consumers that marketers are trying to influence.

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