Summary
- Name of the Webinar: What Influences Customers in the Age of Nearly Perfect Information?
- Channel Name: Marketing Science Institute
- Key Speakers: Kevin Keller, Executive Director at the Marketing Science Institute, and Itamar Simonson from Stanford University
In this webinar, the speakers discuss the topic of consumer behavior and how marketers control and manipulate it. It also describes how consumers make choices under the influence of their own psychology, for example, when making relative choices or compromise choices (“What really influences customers in organizations,” 2014). Itamar Simonson emphasizes that in the modern era of information, people, in general, tend to make more informed choices based on absolute judgments, which is a fundamental change in consumer decision-making.
Then, Itamar Simonson describes some types of market decisions – the ones based on prior preferences, marketers, and other people’s opinions, including experts, other consumers, and various information services. He also notes that lately, the third type of decision has become the most widespread, saying that the shift from ‘M’ to ‘O’ has happened (“What really influences customers in organizations,” 2014). Interestingly, the narrator also admits that the increased tendency towards ‘O’ decreases the ‘P’ group since the consumers facing huge amounts of current and irrelevant information tend to trust their own opinions less.
Specific Terms
The webinar considers some specific topics, and consumer behavior is the first topic presented to the listeners’ attention. Mothersbaugh and Hawkins (2017) determine the consumer behavior study field as “the study of individuals, groups, or organizations, and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer” (p. 7). Another interesting term is the concept of ‘relative choices,’ which means that consumers use to choose products relative to other things. However, it is also said then the more information about the product is provided, the less is the tendency to make choices on relative terms. The ‘compromise choosing’ is also described as a situation when the consumer chooses the middle option between the three choices.
The next term described by the narrator was the relative evaluation, a concept that presents the situation when consumers compare different characteristics of similar products and make their choice based on distinguishing the particular features. The narrator also introduces the term branding saying that people tend to make choices being guided by brand names (Mothersbaugh & Hawkins, 2017, p. 303). Then, the speaker presents the concept of loyalty, emphasizing its importance for the brands in creating a base of loyal customers.
Application
The listed concepts can be successfully applied in the modern market, starting or continuing a business. For example, today, most sellers use fake reviews and opinions to create a positive image for their products. On the one hand, this tactic works because consumers are willing to buy the product that has the most positive reviews. On the other hand, as the world of information offers access to full product specifications, shoppers are becoming more knowledgeable and less likely to make rash or poorly balanced purchases.
Therefore, if my flower sales organization ‘Flowers’ intends to sell as many flowers as possible to a target group of buyers, we must consider both of these aspects. The flower business is well suited to provide an example of the application of the theory presented by the speakers, as it relies heavily on the emotional impulses of customers who often share opinions about a product. First, I will need to provide an adequate online image for my product in order to attract buyers. Secondly, I will need to select really high-quality goods at the most affordable price so that the buyer makes a purchase as a result.
Interestingly, I can also achieve customer loyalty by meeting these conditions, which is very important in today’s market. At the same time, I should not be overly reliant on the psychology of relative choices and compromise choices. These tactics are used to work to provoke shoppers into impulsive purchases, but in today’s world, they are not. Despite the fact that research participants can confirm the psychological tendencies of buyers, in fact, they almost always use common sense in the end due to the wide informational possibilities.
If I want to successfully sell my products, I also need to give my business a beautiful name and build brand awareness. Shoppers tend to rely on the brand when making purchases due to information overload in the marketplace. An excessive amount of irrelevant and current information creates a situation in which buyers cannot rely on product information, their own opinion or prior preferences. Therefore, the brand becomes the only way to determine the acceptability of the price-quality ratio of the product. At the same time, having a recognizable brand will allow my business to differ from competitors positively.
The combined application of these strategies will allow the creation of a store and a web page. Where products will be presented and detailed descriptions will be given to ensure customer loyalty. I can also use direct and indirect advertising, including advertising through Industry 2.0, to build brand awareness and engage buyers. Honestly, treating customers and offering honest products will enable me to retain customers and establish a sustainable and successful business.
Reference
Mothersbaugh, D. L., & Hawkins, D. I. (2020). Consumer behavior: Building marketing strategy, 11th ed. McGraw-Hill Education.
What really influences customers in the age of nearly perfect information?. (2014). Web.