Decoding the 'Point of Buying'

By afaqs! news bureau , afaqs!, Mumbai | In Marketing | February 15, 2012
At the Shoppers and Consumer Insight forum held in Mumbai, Prasenjit Ray, founder and chief executive officer, InStore Consulting spoke about the dynamics involved in consumers' POB (point of buying) decisions.

At the Shoppers and Consumer Insight forum held in Mumbai on February 14, Prasenjit Ray, founder and chief executive officer, InStore Consulting spoke about the dynamics involved in consumers' POB (point of buying) decisions. His session was titled 'Consumer - Shopper Linkage and decoding choice making at the point of purchase'.

Prasenjit Ray

Ray started by explaining the basic terminology, saying that 'the shopper' can be defined as 'the one who shops' and that 'shopping' essentially equals 'making a choice'. This choice could be the choice of category, choice of brand, choice of the pack or even the choice of the reason for making the purchase. "It is this choice that makes an individual 'a shopper' as opposed to 'a consumer'," Ray explained. Then, he addressed the issue of how the shopper and the consumer could be viewed as two separate entities or as those that lie on the same continuum.

Regarding the purchase decision, Ray said that people buy things based on three aspects, namely, their past experiences, the information available and their emotions. He underscored the last one as being particularly important.

Ray then introduced the audience to the concept of 'The Path to Purchase', one that broadly comprises the buyer's 'Need State' (that is, the buyer's needs), the process of evaluating the various options available for purchase, the different choices that have to be made and finally, the selection of the product. Factors influencing this path include one's income level, life stages, socio-economic status, and several other external or environmental influences (such as advice, suggestions and expert opinions).

"Along this path, there are many 'Moments of Truth' that the person faces," Ray said, adding that the actual POB is merely one such moment.

Talking about transient need, he said that brands can benefit tremendously by increasing the visual space occupied by the product at the POB level. "Increased visual engagement and higher share of visual space can actually increase purchase probability," he said.

Citing the example of potato wafers, Ray then went on to explain that when brands stock up their products on shelves, shoppers are more likely to buy the product when a large variety of flavours are displayed on the shelf than when many packets of the same flavour are displayed. This finding is based on the consumer insights that reveal that shoppers tend to change their flavour preferences every time they buy products from the category (that is, potato chips). Besides this variety-seeking behaviour, it was also found that there is a high degree of 'stickiness' to a particular brand across transactions when the brand has many variants (different flavours).

Towards the end of his presentation, Ray spoke about how shoppers make purchase choices. "Choice making is about 'risk reduction'," he said, adding that the risk could be financial, social, emotional or even psychological. Ray then went on to enumerate the different choice strategies that shoppers use.

Barring the 'Grab-and-Go' situation where there is no real choice as such, there exist three choice strategies. The first type is called Non-compensatory Choice, in which the shopper evaluates two or more options based on one parameter. Non-compensatory Choice can either be a 'single attribute choice' (wherein one parameter is used to judge the products) or a 'sequential elimination' process (wherein the choice is restricted by a price cut off/upper limit).

The second type is the 'Compensatory Choice' in which the shopper evaluates his/her options based on more than just one parameter. Compensatory Choice can be carried out in an additive or weighted manner.

The third type of choice is Affect Referral, in which, just before making the decision to buy something, the person seeks validation for the decision. For example, women who go shopping alone are found to make far fewer purchases than those who take a friend along, as the latter receive validation while making purchase decisions!

"As one moves from the first type of choice strategy to the last, the degree of pseudo-rationality increases," Ray said.

He concluded by talking about the interesting concept of 'Haptic Perception', a tactic that shoppers unconsciously use. It refers to consumers' texture-mapping and contour-mapping of items before deciding to purchase them.

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