Saturday, March 23, 2013

23 Marketing Hypotheses, In 7 Categories, For 3 Products (Life As A Marketing Case Study)

Photo by Renee S. Suen via Flickr; permission to share with attribution


"The purpose of business is to create a customer." - Peter Drucker

Preface - Journaling To Learn

When I taught consumer behavior at GW University in Washington, I made the students go to the mall. There they stood with notebook and paper, tracking people as they walked through the stores. Observing their buying behavior. It was great!

Most market research we get in the news is massive in scale. Quantitative surveys, useful to a point but in my view biased toward the sponsor. It is therefore helpful to balance research sources - survey, interview, focus group, and observation.

One underutilized tool is the personal case study. This is where you observe yourself in the process of buying, then take the time to write what you see and extrapolate the lessons learned. These are probably better stated as "hypotheses" because they're just one experience from one person's perspective.

In that spirit here is an unfinished personal case study from the experience of redecorating. The experience is followed by a hypothesis, put in italics. These are organized in the next section for quick reference.

The 23 Hypotheses

1. Branding
  • In the absence of information people go to the brands they know first. 
  • Customers prefer to buy from vendors who have sold them good merchandise previously.
2. Customer Service
  • Customer service representatives who take the time to talk to the customer win business. 
  • Customers notice and get nervous when you are inconsistent or don't keep your word. 
  • Customers notice when your company doesn't seem to operate in unison. 
3. Gender
  • Women connect the dots. So for us shopping has a domino effect. It makes us see related needs. 
  • Men have no patience for shopping. 
  • Men are more swayed by quality than women. 
  • Men are more sensitive to price than women. Men are also more spatially oriented. They want to know the specs. 
  • Men are more practical shoppers. 
4. Mass Media
  • People want the things they see on TV. 
  • Repeat advertising works. People remember catchy mass-media ads. 
5. Internet
  • Better Business Bureau accreditation sounds good. Angie's List has credibility. 
  • Customers use retail outlets to find what they want and then go online to get a better deal. 
  • Online shopping is about trust. 
  • Even a single complaint can ruin your online business. 
  • Google paid search is a good investment. 
6. Price
  • Lacking other indicators, people assume that a higher price means the quality is better especially as compared with other merchandise. 
  • Bundling products together for a single price makes the customer think they are getting a better deal. 
  • Making the customer pay for an estimate saves money and elicits a commitment. 
  • It's not enough to provide the customer information transparently. They are mentally benchmarking your cost against a theoretical baseline. If it's too high, they will walk away. 
7. Sales
  • Know why your customers call you and be ready to answer their doubts before they are even articulated. 
  • If you sound confident your customer will have confidence in you.

The Case 

1. Buying a Sofa

It started with the couch.

Me: "It's not comfortable."

My husband: "What's wrong with it?"

Me: "Look how we have to sit on this thing."

One unflattering pose later we were on our way to the store.

In the car, me: "I want the couch that Chandler had on Friends."

People want the things they see on TV.

My husband: "And where are we going to get that?"

Repeat advertising works.

Me: "The Cinema Store. I've seen their ads over and over again." 

Go to the store. Try out chair. Nice. 

My husband: "We are paying retail prices though."

Me: "Go over there."

I take out my iPhone and take a picture of the tag on the couch. Search the Web. Find it cheaper.

Customers use retail outlets to find what they want and then go online to get a better deal.

Me: "Let's go now. Let's go. We can get it cheaper online."

While my husband drives I talk to him about the different vendors I am finding on the iPhone. 

"I think we should check on the home computer first," he says. "I want to see if there are any complaints."

Online shopping is about trust.

Indeed one of the vendors is part of a complaint war on the Internet. 

Me: "I think it's fine."

My husband: "No. I don't want any problems. This isn't Amazon."

Even a single complaint can ruin your online business.

Finally we settle on a vendor.

2. Dining Room

I realize then that the dining room set is old.

Women connect the dots. So for us shopping has a domino effect. It makes us see related needs.

My husband goes on the computer. 

Men have no patience for shopping.

"Don't we have to look at a new set first?" I say.

"You were at the store the other day, what set did you like? We got this other piece from them, right?"

Customers prefer to buy from vendors who have sold them good merchandise previously. 

"Well is it quality?" He says.

Men are more swayed by quality than women.

"It was more expensive than the other sets," I say. 

Lacking other indicators, people assume that a higher price means the quality is better especially as compared with other merchandise.

"It looks good. Let's just get it. The price is reasonable. Let's measure everything first."

Men are more sensitive to price than women. Men are also more spatially oriented. They want to know the specs.

We take out the measuring tape, do the measurements, put the stuff in the cart. The different pieces make it look expensive even though it's not, terribly.

"Wait, there's a package deal," I say.

We put the package in the cart and now there's one price. We start the checkout process.

Bundling products together for a single price makes the customer think they are getting a better deal.

3. Flooring

At this point we realize the floor is no good. It's been awhile since we carpeted. There is dust.

We try to buy new floor online but realize you have to see it first. I head over to the Home Depot. I remembered their tagline, "More Saving, More Doing, That's The Power of the Home Depot."

In the absence of information people go to the brands they know first. 

They remember catchy mass-media ads.

"Hello? Is anybody here?" I say in the flooring department.

"They all went home, I will stay and help you," somebody says. I have a half hour conversation during which I am convinced to buy a certain kind of flooring.

A second customer service representative talks to me about timeframes and walks with me to the display. 

Customer service representatives who take the time to talk to the customer win business.

I go home and tell my husband about that flooring.

"Oh no," he says. "If we ever want to sell this place people will only want genuine hardwood."

Again, men are more practical shoppers.

Home Depot sends someone to measure. I pay for the privilege.

Making the customer pay for an estimate saves money and elicits a commitment.

I am ready to buy the flooring from Home Depot. But they don't contact me right away with a time window as promised. I call them twice. The call is dropped the first time. The second time I am told that "the manager has gone to lunch."

Customers notice and get nervous when you are inconsistent or don't keep your word.

I use the web-based interface to contact Home Depot customer service and get a call back the same day. However, this call crosses with the call from the third-party estimate provider.

Customers notice when your company doesn't seem to operate in unison. 

The estimate provider spends a lot of time on the phone with me. He breaks down the charges point by point. I get a written estimate by email. The estimate seems very high. I tell my husband. He says, "No way. That's a ripoff."

It's not enough to provide the customer information transparently. They are mentally benchmarking your cost against a theoretical baseline. If it's too high, they will walk away.

"What are we going to do?" my husband says to me. "We need to coordinate the floor and the furniture."

Out of desperation, while I'm on the train I do a Google search on my iPhone. I key in our town and the words "hardwood flooring." Three paid search results come up.

Google paid search is a good investment.

I choose the one with the name connoting the lowest cost and the highest trust factor. The ad says "family owned."

Someone picks up the phone right away and shows up the same day to measure. With samples.

When you get the call you must be prepared.

The first words out of this person's mouth: "How did you find us?"

"Google paid search," I say. "I guess that works."

The salesperson says: "We're accredited on the Better Business Bureau. We have hundreds of good ratings on Angie's List."

Know why your customers call you and be ready to answer their doubts before they are even articulated.

If you sound confident your customer will have confidence in you.

Better Business Bureau accreditation sounds good.

Angie's List has credibility.

To Be Continued

We're not even close to done yet. But looking over what's happened so far, we're immersed in marketing takeaways.

Let's see how things close out - a possible Part 2 of this case study, perhaps for another day.













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Copyright 2016 by Dannielle Blumenthal, Ph.D. All opinions are the author's own. Powered by Blogger.