This is a topic that has always been fascinating to me as a professional business and marketing consultant. Marketing is about perception, so the mindset of consumers begs a whole series of questions.
- What do consumers buy?
- Why do they buy?
- Why should they buy from a certain seller vs. a different one?
- How do you reach the consumer when they’re ready to buy?
- How do you convince or encourage them to buy when you want them to?
These questions seem simple, but the answers are rather complicated. Keep in mind that the average consumer wants to avoid being sold; they prefer to make purchases on their own terms. My hair stylist told me she finished her Christmas shopping early in 2012; she bought everything online. Her terms.
There are several factors that influence the consumer’s mindset, such as the budget (is the product or service affordable), the level of need (is it a necessity or a luxury purchase), and the deal (is it a bargain at the price offered or is it better to wait), among other variables.
Let’s start with the level of need. Remember the heirarchy of needs? It starts with basic necessities such as food, water, and shelter. If your business offers products to meet these necessities, the theory holds that your business should survive and succeed. The consumer, in most cases, wants toilet paper so you should have little competition … except there are different levels of softness, sheets per roll, and other variables. What determines the consumer’s decision to buy in this scenario?
Here’s where other factors come in. Is the consumer looking to stock up because the supply is running low? Is there a good price on their favorite brand? Are they totally out and need whatever they can find at whatever the price?
With other necessities, such as electrical power and a water supply, the consumer has little choice since the market is dominated by monopolies. Utilities provide cost savings through the control of grid systems which enable individual users to share the cost of a major development. Going “off the grid” for your energy needs is an expensive project for the same reason it is costly to develop your own water capture and filtration system.
Another aspect of the level of need is whether the purchase is vital or merely a luxury.
This can be where the budget factors come in. If a woman needs a pair of pants for work and the same slacks are available at a discount store for 30% less than at a name brand department store, where does she buy the pants? She may buy them at the department store for the “prestige factor” or save the money buying them at the discount store and saying she bought them at the other place.
As the retailer, your advertising is going to depend on which store you own or represent. The discount outlet can be effective marketing the pants as “department store quality at 1/3rd the cost” whereas the department store is likely to focus on the quality of the name brand with a message along the lines of “available exclusively at.”
Another influencers in the consumer’s mind is brand loyalty. If the woman needing pants has always purchased her work slacks at the discount store, she will most likely purchase the next pair from that store. And if she’s loyal to the department store, she will buy there despite the price difference. The deal is less a factor when the power of the brand trumps the perceived value.
So what have we learned about the consumer’s mindset?
While advertising tends to lump consumers together, the individual makes his or her own buying decisions based on their psyche, budget, personal preferences, and perceived value. As a business owner, it is essential to understand your customers as much as you possibly can so that you and your products or services, remain relevant to them and their desires.
If you’d like some assistance with some market research on your consumer’s mindsets, please contact Brand Irons.