Heuristics and How They Can Be Used by Marketers to Influence Consumers - Essay Example

?Heuristics and Print Advertising Heuristics and how they can be used by marketers to influence consumers Understanding the psychology or the behavior of consumers is key in marketing. This is because an understanding of when, where, why and how people buy or do not buy a certain product is important in making developing strategic marketing plans that will make a product get larger market. This means one has to understand the consumer decision-making process. This could require an extensive research involving interviews or questionnaires administered to a large group of people. However, exhaustive research is not practical or organizations may not afford to spend large amounts of resources on every issue. This calls for the use of simpler methods to get satisfactory solutions. An example of this is the application of heuristics. Heuristics refers to experience-based techniques for discovery, learning and solving problems. Heuristics can also be described as simplifying strategies or rules of thumb that help people in their reasonable judgment and make guesses more quickly. Therefore, they are informal shortcuts or rules used to make daily judgments and get satisfactory solution since organizations cannot afford to spend large amounts of resources like energy, time and money on every single judgment or detail of life (Kahneman et al, 1982). Consumer behavior theories also give a good understanding of the behavioral trends among consumers and the factors that affect their decisions. Marketers combine information from these theories with heuristics so as to attain strategic marketing. The consumer behaviour theory gives a practical application of understanding the behaviour trends in consumers and thus providing a way of strategizing to influence them. The theory explains the psychological, mental, emotional, non-utilitarian or subjective aspects of consumer behaviour in making buying decisions. Consumer behaviour theory explains how consumers buy while giving a prediction on what they will buy. It is important to understand factors that influence consumers purchase decisions and a change in these decisions. These include upbringing, socio-economic status, friends, media, culture, role models, or peer pressure or influence from certain groups. It is also important to understand that there are consumers who are always after brands of high value hence they seek a lot of information on available brands before making any purchase (Engel et al 1995). Other consumers have habitual buying behaviour whereby they purchase products as a habit whereas others are variety seeking. Howard (1989) states that variety consumers always shop around to get a different brand of a product just to have variety. Variety seeking consumers are the best targets for advertisements since it brings the existence of the brand into their attention so that they can seek it. When they have got used to it, the manufacturers can make slight changes to re-advertise it as a new or improved product once again. Another consumer behaviour theory that explains the trends in consumer behaviour is the neoclassical consumer theory. This theory is a branch of microeconomics that deals with understanding consumer behaviours through the application of classical models of economics. These models are based on the perception of consumers as people who are very rational in their decision making. In this respect it views them as people who always seek to maximize their satisfaction and benefits with purchases through informed and reasoned analysis of utility and value. When the neoclassical consumer theory is applied to consumer behaviour, it assumes that the utility or benefit of a product describes their behaviour over a life time. The utility maximizing rule states that for consumers to maximise satisfaction, they should allocate their finances so that the last amount of money spend on each product yields the same utility. The neoclassical theory factors in the issue of elasticity. If a product is highly elastic, its consumption will reduce if its price rises. However, if product is inelastic, an increase in its price will not affect consumer behaviour. They will still go for it regardless of the increased prices. This means s company that wants to capture customers and retain them should ensure the elasticity of their product is at the lowest level. It should also be noted that substitution effect works in the neoclassical consumer theory in that customers are always willing to substitute a product with its substitute provided t is cheaper. This means that marketers should always be very keen on the prices of the substitutes of their product. If they are ranging closely, then it is worth making a lot of advertisements about it. If the gap is so big, then it may not achieve much. This means they could consider lowering their prices or make their product to look as though it is of superior quality. In this way, consumers will be willing to spend more just to have it. Heuristics are very important in marketing since they provide a quick understanding of how consumers reason, feel, think and select between different alternatives of retailers, products and brands. Perner (2002) states that it also helps in the understanding of how the consumer is influenced by their environment like family, signs, culture and media and behaviour of consumers while making decisions or shopping. An understanding of these will help marketers to improve their marketing strategies and marketing campaigns to make them more effective in reaching and influencing customers. Heuristic persuasions therefore focus on inducing a change of attitude. Generally, heuristics can be used as an advertising strategy that relies on symbols, values, emotions or images to promote a product. There are different types of heuristics that can be applied by marketers to influence consumers to purchase their product. An example of these is similarity heuristic. This heuristic explains how people make decisions or judgments based on similarity. This is similarity between the current situations and other similar situations. The goal of this type of heuristic is to maximize sales through favourable experience while making sure not to repeat unfavourable experiences (Grushka-Cockayne, 2002). Using similarity heuristic, companies often advertise their products as that of a successful competitor but better. In this manner, a heuristic similarity in the consumers mind. A similarity between the new product and past successes or good experience of similar products will make people to buy the new product. Marketers can also market their product using a name that is almost similar to that of a competitive product despite being produced with lesser specifications than compared original/competitor product. An example similarity is interchanging the brand name Life is Good into Good Life or taking Original Equipment Manufacturer, OEM, and interchanging it into Original Equipment, OE. Due to its mode of action, the heuristic similarity can also be described as an adaptive strategy. Print advertisements can be most influential due to their potentially long hours of contact with consumers for example posters stuck for weeks or adverts appearing daily on magazines. The company should therefore ensure they make regular print advertisements so as to achieve a greater level of influence on customers. Social proof is another type of heuristic. This heuristic is also known as information social influence. This is a psychological phenomenon in which people assume that the actions of other people reflect the correct behaviour for a given situation. This effect is more pronounced in situations in which people are not able to decide on the appropriate mode of behaviour hence they are driven by the assumption that people around them have the relevant knowledge about the situation. Similarity also applies in social proof where people perceive themselves as similar to those surrounding them. This means they are more likely to perceive choice or behaviour of these people as the most appropriate. The effect of information social influence or social proof can be noted in the tendency of large groups of people to conform to choices that could either be mistaken or correct. It therefore reflects a rational motive to take into consideration the information possessed by others. Formal analyses reveal that social proof can cause large groups of people to converge very quickly upon one choice. In this case, decisions of even large groups of people may actually be grounded on very little information. This phenomenon can also be described as herd behaviour. Engel et al (1995) state that marketers can apply social proof by making the most influential or admired people or groups their initial target. In this case, other groups or people will look to them for cues concerning the product. This means they should make the experience of their initial target the most pleasant. In this manner, the information they will as to others will focus on the positive aspects of the product. This strategy works very well in places where human density is high like a college or a town. Gigerenzer and Goldstein (1996) explain that the take-the-best heuristic is a heuristic that helps determine the potential behaviour of people when making judgments or choices on multiple criteria. For marketers, this heuristic helps them to determine customer behaviour in cases where there are several choices to make. People will always try the available criteria one at a time using their cue of validity. After this, they make a decision in respect to the criterion that discriminates between the various available choices/alternatives. In this respect, marketers will ensure that in their advertisements, they mention one outstanding feature of their product that discriminates it from those of their competitors. Fluency heuristic is a type of heuristic in which if one product is processed faster, fluently and more smoothly, the mind infers that this product is of higher value. In this case, marketers should state one aspect of their production process or product feature that can make their product to be picked out by consumers. For example, stating that a certain brand of margarine is easy to spread compared to other margarines or that it is has fewer chemical preservatives (Schwarz, 2004). Recognition is another type of heuristic that can be applied by marketers. This heuristic states that if one among two objects is recognised and yet the other is not recognised, this then infers that the object that is recognised is of higher value with respect to the particular criterion (Goldstein and Gigerenzer, 1999). Marketers should apply the strategy of repetitive advertisement to ensure their brand gains more recognition compared to other competitor brands. Another type of heuristic that can be applied by marketers in order to influence the behaviour of consumers is familiarity heuristic. Park and Lessig (1981) state that in this heuristic, people judge the correctness of a current behaviour based on its similarity to the past behaviour and the outcomes of that behaviour. Using the familiarity heuristic, marketers should ensure that in their advertisements, they bring out specifications of their product that will give consumers a positive experience as that offered by similar products from its competitors. In this case, consumers will be able to flashback their experience with similar products which offered them positive experience. This will stimulate them to buy the advertised product in search of a similar experience. By using information-based information heuristics, marketers can produce a more enduring change of attitude among consumers. However, not all buyers can spend large amounts of time evaluating advertised products. The time allocated for TV advertisements are also restricted and this is compounded by limited attention span for their audience. It should also be noted that repetition of advertisements on TV boosts the chances of availability heuristics. Availability heuristics refers to the tendency to make a judgement on how relevant examples can easily be generated. The more an advert features on TV or on print media, the more easily the audience are able to access them in their own memories. Zaltman and Wallendorf (1983) state that this repetitive advertisement enhances their chances of changing their attitude towards the product and hence making them to purchase the advertised product. TV and print advertisement can therefore be said to rely on heuristic persuasions to get the attention of its audience as opposed to other traditional methods of bombarding consumers with information. Conclusion Heuristics give a quick way of understanding the behaviour of consumers and this is important for purposes of marketing. It gives marketers a hint on how to present their product to ensure that it captures the attention of consumers and motivate them to buy it. This could include the brand name used, where to target their advertisements or product features to indicate during their advertisements. These should be presented in such a manner that will it will greatly persuade the consumers to prefer the product over product brands produced by its competitors. References Engel, J. Blackwell, R. and Miniard, P. (1995). Consumer Behaviour (8th. Ed). London. The Dryden Press. Grushka-Cockayne, Y. (2007). The Similarity Heuristic. Online: http://ssrn.com/abstract=1030517. Viewed on 30th August, 2011. Howard, J. (1989). Consumer Behaviour in Marketing Strategy. London. Prentice Hall. Gigerenzer, G. and Goldstein, D. (1996). "Reasoning the fast and frugal way: Models of bounded rationality". Psychological Review, 103, 650-669. Gigerenzer, G. and Goldstein, D (1999). The recognition heuristic: How ignorance makes us smart. In G. Gigerenzer, & P. M. Todd, (Eds.). Simple heuristics that make us smart. Oxford. Oxford University Press. Kahneman, D. Tversky, A and Slovic, P. (1982) Judgment under Uncertainty: Heuristics & Biases. Cambridge. Cambridge University Press. Park, W. and Lessig, P. (1981). “Familiarity and its impact on consumer decision biases and heuristics.” Journal of Consumer Research. 8. p. 223–230. Perner, L. (2002). CONSUMER BEHAVIOUR: THE PSYCHOLOGY OF MARKETING. Online: http://www.consumerpsychologist.com/. Viewed on 30th August, 2011. Schwarz, N. (2004) Meta-cognitive experiences in consumer judgment and decision making. Journal of Consumer Psychology, 14, 332–348. Zaltman, G. and Wallendorf, M. (1983). Consumer Behaviour: Basic Findings and Management Implications. New York. John Wiley and Sons. Appendix 1. Print Advert Read More