In this article Satama’s Director Eeva-Liisa Ylälahti discusses the various approaches to analyse consumer behaviour and means to bring consumer understanding as business-relevant as possible.

Does the marketer need to understand the buying process of a consumer in the market for a vacation package, mobile phone, or a new home? Yes – by understanding the consumer’s buying process, the marketer can learn to both manage and make the most of media convergence.

Does the consumer in the market for a vacation package, mobile phone, or new home need to understand media convergence? No – the consumer simply lives media convergence by using different marketing channels in a variety of ways and by moving back and forth between channels in search of products and/or services.

From information silos to understanding the buying process

Although there have been myriad studies on marketing phenomena, most often the knowledge gained has been cross-sectional. Marketing channels have been studied in silos; each channel and its efficiency separately. Rarely if ever have studies focused on successive media or how multiple channels work together as a single entity.

Last fall, the Helsingin Sanomat newspaper undertook a forward-thinking study of consumer processes related to the purchase of a home or apartment. The central goal was better understanding of how print media and the internet work together; in other words, the study focused on the play between the net and the newspaper, and how people moved back and forth between the two while searching for interesting investments. The process of buying a home was recognized as lengthy in terms of duration and complex in terms of the channels used. The study subjects were Helsinki area residents who were in the market for a new home over the next six months.

Structure of the buying process

The home buying process is clear: once a consumer identifies the need to buy, the first steps are gaining an overall understanding of the situation, dreaming about possibilities, following the market, and investigating developments. After this initial research, the buying process accelerates and the consumer starts visiting home showings. Then it’s time to make an offer and investigate the neighborhood that is the target of the potential move. The home is bought, but the process continues. The consumer who has already bought “returns” to the initial state of monitoring the market – but for a different reason. After making a purchase, the consumer wants to make sure that they have made a good investment and follow the development of its market value.

Buying processes have been studied across many fields and share many similarities, regardless of whether it’s a home, vacation, or mobile phone that is being purchased: first the consumer dreams, then investigates and compares, then selects and finally, regardless of the process, makes an offer and/or buys based on an offer.

Role of different marketing channels during different phases of the buying process

The study of the home-buying process strongly indicates that the newspaper and the internet each play a clear role. The paper is used first and foremost to gain an overall picture of and monitor the market. The newspaper also functions as a reminder, stimulating the consumer to search for more information online. On the other hand, the internet is best for fast, precise searches and offering useful market monitoring services for busy urbanites. Of study subjects, 90% used both the newspaper and the internet as sources of information. The newspaper’s classifieds were actively followed by 80% of subjects, while 76% regularly searched for more information online. The significance of different marketing channels and sales efforts is great, as a third of the respondents indicated that they had purchased a different kind of home or a home in a different area than they had originally intended. The majority of respondents indicated that they followed any and all information and advertising that they could get their hands on when the buying process accelerated and they started visiting home showings more actively. Home buyers considered all advertising that increased informativeness to be relevant.

A long buying process guarantees an active and long-term target audience

The bigger the investment, the longer the buying process seems to be. In other words, as a target audience, home buyers are in an active phase for a long duration, and warrant being addressed with messages related to home-owning throughout the buying process, and long thereafter as well. For instance, an interest in decorating activates strongly once the deal is done or close to being done. The marketer who recognizes the target audiences at different stages of the buying process knows how to more accurately select the most effective channels and messages. Direct marketers as well are ensured better success when they know how to segment the market more accurately according to different phases of the buying process and different consumer motivations instead of relying solely on traditional segmentation models.

Ways of studying the buying process to facilitate understanding of media convergence as a phenomenon and target audience processes

To date, the best methods of studying of buying processes have relied on ”unorthodox” approaches. The greater the number of methods combined, the more viewpoints are discovered, the more accurately the role of successive media is identified, and the better consumer ”jumping” from one channel or information source to another is understood. Most studies of purchase processes are restricted to a single process and clearly focused on a distinct, desired target audience. Yet panel-style studies have proven to be effective, as has automatic data gathering combined with dialogue-style internet surveys, in-depth interviews, or other qualitative methods. The buying process cannot be successfully studied in a week or two. At least two or three months should be dedicated to it, in order to find a sufficient group of consumers who go through the entire process. The comments of marketers who studied the buying process are encouraging: ”It’s fantastic that the research generates information on a new viewpoint and helps us understand phenomena more deeply, while at the same time indicating concrete improvements for our marketing activities”.

This entry was posted on Friday, March 23rd, 2007 at 5:54 pm and is filed under Insights. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.