The five-stage purchasing process model is a theorem that derives from within the complex area of buyer behaviour and customer decision-making processes. It contains five elements of a customer’s behaviour that relates to almost every purchase that they make. The illustration below is the Solomon, Bamossy & Askegaard version of the 5 stage purchasing process model of which they call the ‘consumer decision making model’ in there 1999 publication, “Consumer Behaviour – A European Perspective”.
The extent to which each stage is used in a purchase would rather rely on the character of the acquisition and the involvedness implied.
Problem Recognition: The fundamental element to all purchases is the problem recognition, which could occur naturally in the course of events, or could require effort on the part of the supplier. Where effort from the supplier is need is in with elements that have a low penetration threshold in any applicable market.
Information Search: As soon as a problem has been recognised, consumers then start to search for information about that problem in order to fulfil it. This is usually where both informal and formal approaches are used. It may be an informal approach and take the form of becoming ‘open to information’ about the item for consumption’s form. Or customers could adopt a formal approach and become very active in their approach. This could involve conversations with friends, the accumulation of trade details, the consultation of specific reports or expert opinion and could occasionally involve a journey to similar outlets to try not-too dissimilar offerings. This has been depicted, as being a cognitive stage as there has been an amassing of understanding concerning a multitude of potential options.
Evaluation of Alternatives: This is the stage where there is a judgement by the customer on the alternatives and is also the stage where a preference is developed upon or towards a particular brand or product. From there we lead rapidly to the next stage, purchase intention.
Purchase Intention: As soon as the customer is convinced that the value of a particular offering is of a standard to them, they can then be characterised as acquiring a purchase intention. This stage is affected directly by the customer’s cultural, societal, individual and emotional traits and is the stage where the consumer develops an emotional reaction to the array of offerings. This response though, is also a direct expression upon the environment of the market and the position in the market that the product has been placed into or possessed initially. This can also be known as the affective/emotional stage.
Product choice: This is the stage where the customer ‘takes the plunge’ so-to-speak and opts for their personal preference. Purchase decisions are often susceptible to deflection through the intrusion of others or through some type of unforeseen reason (availability, actions of a sales person), and are more susceptible during high-risk purchases where the levels of anxiety reach their peaks. The customers’ final choice will then be regarded as a success for the supplier and will be seen as progress in understanding the complex area of buyer behaviour and an opportunity to perhaps establish a relationship. (de Chernatony & McDonald: 2001: 70-71)
Benefits to Value
Direct marketing is fundamentally about the customer. Ultimately it is the customer generates the profit and not the actual product. Obviously not in the material sense but it is the thoughts, decisions, concerns and overall behaviour that are critical in any purchasing process. If the customer harbours any doubts about the product, then the probability is that the customer will not part money with their hard earned money. It is essentially a marketer’s job to assure the customer that their product is the one that they want and should have. Now to do this the marketer has to appeal to their desires and needs directly, which is why the value that will be emphasised will be that of Customer Perceived Value.
The customer’s perception of value is clearly outlined in Lambin as the product as a package of benefits. The core is the functional value but as well as that, the attributes that a customer looks for are the additional services.
The figure below is an adaptation that could easily be applied to the customer’s perception of some of the additional benefits (Lambin: 2000: 111-112).
Customer analysis shows that customers can be categorised into four genre of buyer – loyal customers, promiscuous customers, frequent customers and occasional customers. The loyal customers are, according to the Pareto rule, the organisations highest source of income. Pareto’s rule is one that states that 80 per cent of revenue will come from 20 per cent of customers. Promiscuous customers can be described as customers who purchase the organisations product but are not turned off at purchasing rival products. This fluctuation between rivals often occurs because of discounts or other promotional offers. Frequent customers are often described as being those that purchase the product regularly but often in small amounts and occasional customers buy the product infrequently but in large amounts. Marketers can tailor their approach to match each genre of customer and so in turn offer attractions to each that will move them into becoming, or keep them as, loyal customers. For example the highlighting of the product benefits and the offer of extra incentives such as money off coupons are ways in which marketers can tailor there approach directly (O’Malley et al.: 1999: 348-350).
The developing demographics of the population accompanied by a change in most people’s lifestyles are a prime example of how direct marketing can be utilised by marketers. Women are the main focus of marketer’s attentions through the vehicle of direct marketing. In recent years women’s roles in the household have become more complicated with some now becoming the main bread winners in the household and therefore having less time to do the sort of things that were naturally taken for granted in previous years, for instance shopping. Women have chosen to use there spare time to pursue leisure activities and so the ease of shopping from home by phone, mail or Internet with the bare minimum of effort through the use of credit or debit cards has become a social norm (Brassington & Pettitt: 2000: 732-733).
A major advantage of using direct marketing is that it is the major tool in building-up, sustaining and developing a business to customer relationship. This is simply the development of a consumer’s faith and allegiance in a business. When trying to gain the initial purchase in the five-stage purchasing process model listed above, a marketer should evaluate a customers purchasing history in order to gain insights, and should therefore tailor the approach to appear to suit that customers needs and wants. Then the marketer, when considering future purchases the consumer may make, will be able to tenderly push the customer in the direction of the more higher-priced acquisitions (Brassington & Pettitt: 2000: 732-733).
The increase of competition in contemporary markets is another factor that direct marketers have to face the challenge of. Although with the use of, for example direct mail, the needs and desires of the customer can be tailored too and so in turn if these are met then the business needs to worry less about rivals stealing their sale. The business can then build upon the intimacy of the relationship in order to exploit customer confidence and achieve sales targets and objectives. What is appealing to the customer and is an essential lead into relationship marketing is the personalised touch that direct mail etc can offer. The customer obtains a sense of belonging and so in the case of the purchasing process, direct marketing plays an important and at times crucial role (Brassington & Pettitt: 2000: 732-733).
The fragmentation of the media has meant that it has become increasingly easier to more precisely catch the attention of the preferred market segment. With the expansion of cable and satellite television there is a plethora of specialised TV channels, such as music and sports. But on the other hand it is known that the there is a reduced reach-per-medium rate and so direct marketing, ahead of traditional broadcast advertising, can penetrate these niche markets thus a higher audience proportion will be reached and as a result response will be more forthcoming. Direct marketing then can influence the end decision, especially during the customer’s evaluation of rival alternatives.
Media costs in the contemporary advertising world are huge, and there is not a precise way of measuring a traditional broadcast advertising campaigns effect and successfulness. Therefore the targeting of a predetermined segment through direct response advertising and then direct mail will prompt the customer into action. This in terms of the five-stage purchasing process model would have influence in the first three stages. It could be used as a prompt for the consumer to recognise that they have a problem, can provide the information that they are searching for and also to influence them in their evaluation and choice of possible rival alternatives.
New distribution channels have also made it a lot easier for direct marketing to become more successful. For instance the advancements in speed of delivery, from the times of ‘allow 28 days’ to 48-hour or even 24-hour delivery, have attracted a greater consumer base. Internet shopping now allows you to order CD’s and DVD’s from abroad, and they can be at the customer’s home within 5-7 days. In combination with new distribution channels coupled with the obvious convenience factor, this area of direct marketing has its attractions for the consumer as it eliminates shopping centre and superstore cues and offers greater product choice and less overall hassle. As Flack stated in 1999 the huge growth of telephone call centres has created a new channel of distribution between organisations and consumers. The UK has the largest number of call centres in Europe at present and by the year 2003 will have increased that number over 50% to 19,000.
Developments in technology have also greatly increased direct marketers chances of gaining and keeping consumers. Even the smallest and least powerful computers have the ability to hold some form of database and so direct marketers have vast and intricate information at their fingertips. With the ability to hold large quantities of information on a consumer at a relatively cheap outlay, databases, data mining and data warehousing have become an integral element of targeting individuals as opposed to vast segments. Also the advancement in communications technology has helped call centres handle hundreds of calls at once, which in the long run can only benefit the organisation as the customer isn’t forced to listen to a constant engaged tone and wont lose there service through sheer frustration.
These tools of technological development make a direct marketers life a lot easier and will help in the ‘evaluation of competitors’ phase of the five-stages of the purchasing process as the consumer will consider the fact that the organisation – in terms of data handling progression – has targeted them personally, and in terms of telephone handling advancements the effectiveness and attitude of the customer service element of the package. This is especially applicable in the energy markets such as water or gas suppliers as a phone service is vital to the consumer in times of need.
Direct marketing is essentially about building some form of relationship with the customer, whether it’s a short term or long-term allegiance and so the elimination of any perceived risk is essential in doing this. If the customer undertakes an extensive search for information then the likelihood is that there would involve a perceived risk. There are five types of risk (monetary, functional, physical, social and psychological) that the marketer needs to eliminate in order to assure the customer of the products quality and benefits. For example the purchase of a computer is a major financial outlay and so the use of database analysis followed by the use of direct mail or phone sales is valuable and essential in the targeting of the correct individuals (Solomon et al: 1999: 218-219).
Conclusion
To conclude, it is evident that direct marketing has a tremendous influence on ‘customer perceived value’. The tools of direct marketing, which include direct mail, the World Wide Web and telesales, are instrumental in the gaining of peoples trust, the easing of their doubts and the exaggeration the products benefits. This is essential in the development of business to consumer relationships and the creation of relationship opportunities.
Every consumer who partakes in some form of survey can easily be placed into a scale in order to find the products positioning on what is known as a perceptual map. The data provided can help determine the position of the product on this map. The position will be determined by the characteristics of the product that the customer perceives to value the highest.
In order to gain a suitable position on the perceptual map, the customers concerns and attitudes about the value of the product – quality, level of service etc – need to be addressed. Direct Marketing makes a unique contribution to the purchasing process through established and new channels of communications.
It poses the question of the revision of business to consumer relationships to account for their full and perhaps untapped potential and value. Direct marketing has evolved marketing through its use of a many-to-many model (Web-sites etc) instead of the one-to-many model of traditional media has helped to achieve greater value. This essentially realises that value can be created through direct marketing, but only if the organisation develops a concept which does not rely on the one-way directional flow that value creation has always been perceived as having in traditional marketing, but realises the potential of the customer and recognises the dynamic role of the customer in contemporary marketing (O’Malley et al.: 1999: 348-350). Although in essence it comes down to the innovation of the marketer as one of the “prime skills of the direct marketer is to communicate the right message in such a way as to attract the desired response” (Holder: 1993)
Bibliography
- Exploring Direct Marketing: 1999
O’Malley, Patterson and Evans: Thomson Learning
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Cited from Exploring Direct Marketing: 1999
(Holder: 1993)
- Consumer Behaviour – A European Perspective: 1999
Solomon, Bamossy & Askegaard: Prentice Hall Europe
- Marketing in Managing Bites: 2000
Meldrum & McDonald: Macmillan Press Ltd
- Creating Powerful Brands: 2001
de Chernatony & McDonald: Butterworth-Heinemann
- Principles of Marketing: 2000
Brassington & Pettitt: Pitman Publishing
- Market-Driven Management: 2000
Jean-Jacques Lambin: Palgrave
