Reliance Life Insurance (Customer Buying Behaviour Towards i
Product cost and customer buying experience
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Mistakes done by companies | Relation between product cost and customer buying process One of the basic fundamental of marketing talks about customer buying process complexity and its relation with product cost. Ideally cost of a product is directionally proportional to complexity of buying a product. Take an example, suppose I have to buy a product like a shampoo. I might owe a risk of using it once because of 2 major parameters which comes into play: 1. Life of a product – bottle of shampoo will end in a months time and after that I will be a repeat new customer of this category of a product 2. Low risk related to money at stake. All other parameters like brand association, quality etc kept constant. Now compare with something like a car. If today I have to buy a car decision would have been already scrutinized at every level of purchase decision. I may also have looked for suggestions, editorials etc. Here 2 parameters about which I talked earlier form a basis of final decision. Because life of a product and risk of investing money is comparatively higher I might not take a chance with it. Hence product quality, brand image etc comes into play big time. Coming to the point many companies today are making a mistake of selling high involvement (valued) products by focusing on parameters other than discussed above. Here in this segment product quality, looks, brand association, performance matters a lot. And you cannot expect things to sell without considering all these parameters important. Yes there are ways to do by selling on discounts or schemes it but it will directly impact profitability of the company and product will die slow death. Climbing up the ladder I price index demands more efforts on product development. In today’s scenario majority of your product success depends on a good strategically designed marketing campaign. If my product falls in the category of high involvement complex buying
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Transcript of Product cost and customer buying experience
Mistakes done by companies | Relation between product cost and customer buying process
One of the basic fundamental of marketing talks about customer buying process complexity and its relation with product cost. Ideally cost of a product is directionally proportional to complexity of buying a product. Take an example, suppose I have to buy a product like a shampoo. I might owe a risk of using it once because of 2 major parameters which comes into play:
1. Life of a product – bottle of shampoo will end in a months time and after that I will be a repeat new customer of this category of a product
2. Low risk related to money at stake.
All other parameters like brand association, quality etc kept constant. Now compare with something like a car. If today I have to buy a car decision would have been already scrutinized at every level of purchase decision. I may also have looked for suggestions, editorials etc. Here 2 parameters about which I talked earlier form a basis of final decision. Because life of a product and risk of investing money is comparatively higher I might not take a chance with it. Hence product quality, brand image etc comes into play big time.
Coming to the point many companies today are making a mistake of selling high involvement (valued) products by focusing on parameters other than discussed above. Here in this segment product quality, looks, brand association, performance matters a lot. And you cannot expect things to sell without considering all these parameters important. Yes there are ways to do by selling on discounts or schemes it but it will directly impact profitability of the company and product will die slow death.
Climbing up the ladder I price index demands more efforts on product development. In today’s scenario majority of your product success depends on a good strategically designed marketing campaign. If my product falls in the category of high involvement complex buying
product I may like to work more on product value preposition rather than jazzy marketing promotional plans. On the contrary if I have a product whose buying process is not so complex or rather which is a low complex buying product, I will spend more on availability, offers, attractive marketing plans etc.
