“How do consumers choose what brand to buy?”

By Dr Ned Roberto with Ardy Roberto

Q: We attended the Senior MRx-er’s Consumer Insighting seminar last April. In one portion of the seminar, you dealt with the question of how consumers choose what brand to buy. You presented a consumer decision making model that the image section of the UAI (Usage-Attitude-Image) market survey has been using for the longest time. Your example was about brands of toothpaste.

We’re in the household appliance business. We just had our UAI on refrigerators completed. We looked at the image data together with our dealers. No sooner had we finished the last Power Point slide when our dealers challenged our implied assumption of the data about how ref buyers choose the brand of ref to buy. They said they have yet to see a ref buyer who in choosing a ref brand lined up the available brands. They then evaluated each brand on a set of preselected ref attributes that they have prioritized in importance. Then the buyer’s choice goes to the brand that the buyer rated highest versus other brands on the top priority 2 or 3 prioritized ref attributes.

The dealers’ observations say that buyers’ choice is much simpler. Inside the appliance store, a ref buyer looks over one brand that catches her attention. Then after a cursory inspection outside and inside the ref, the buyer decides to buy. If the buying decision is suspended, the buyer goes to just one other brand. She then does the same cursory inspection and then decides between the first and second brand.

Of course, we remember your telling us that the UAI-based model is just one of many models of consumer decision making. But what should we do now? How do we validate with research our dealers’ version of the “more realistic” way ref buyers choose a ref brand? – Perplexed appliance entrepreneur

A: To start with, we have to say that we’re happy about two things in your note. First, you’re willing to listen to your dealers. After all, they are the ones in direct contact with your buying customers. They know and have a personal understanding of those customers. Second, you have learned the discipline of pretesting in making your own decisions. The father of direct marketing, Bob Stone, says: “To be sure, test, test again, and test some more.”

Let’s now proceed to your question. We’ll first diagnose the two conflicting models of how ref buyers choose the brand of ref to buy.

The UAI-based model assumes that the buyer’s decision strategy is to serve her goal of making the best choice by considering all the alternative ref brands along her prioritized criteria for a good ref brand. If the ref buyer were doing her shopping online, and visiting all the available ref brands in their respective Web sites, this consumer decision making model would probably have a good measure of reality. But in the setting of the appliance store, it obviously would be inferior in explaining ref buyer brand choice as compared to what your dealers had observed.

Romancing vs No-Brainer

Our own research supports your dealers’ model. The ref buyer’s decision strategy is a process of inspecting just one brand or two. Here’s what our observation study had revealed.

The buyer goes to a ref brand that had impressed her. She walks around this ref knocking every so often on its outside panels. She then stands in front and opens the door and then closes it. She again opens and then closes. Then she takes out a piece of paper from her bag and tries inserting it where the door clings to its ref body base. Then she opens again, and looks inside the freezer compartment after opening its vertical cover. She checks if the ref is on and then feels with her hand the floor, sides and ceiling of the freezer compartment. Then she shifts her attention to the bottom drawer where the vegetables and fruits are usually contained. She pulls out the drawer completely and inspects the drawer’s shape and inside space. She then puts back the drawer, closes the ref door and proceed to look for a sales ref to talk to.

When we obtained permission to interview this buyer, we got the following eye opening answers to our several why-questions. She said she was knocking on the outside panels because she wanted to check how thick or thin that “steel” or “aluminum” panels were: “Baka sin nipis lang sila nang Ligo sardine cans” (They might just be as thin as the Ligo sardine cans).

She was inserting the paper to find out if the door seals tightly: “Kasi pag medyo maluwag siya, sasayangin niya ang kuryente na lulusut sa puwang na kahit nipis na nipis lang” (If the door doesn’t seal well, the ref will just waste the coolness inside that will escape out even in the thinnest opening). Her hand was feeling out inside the freezer because she wanted to check if there’s ice forming. When told that the ref brand she was check was “frost-free,” she didn’t ask what that meant. Instead she just said: “Anong klaseng ref yan kung walang yelo” (What kind of a ref doesn’t have ice)?”

When she pulled out the entire vegetable drawer, she said she was disappointed. She said the rear of the drawer could not contain much because the entire rear curved in to a third of the length of the drawer. When it was explained to her that the eaten space was to give way to the ref’s engine, she simply said: “Basta ang daya nyan” (That’s cheating).

It should be clear that for your brand, its advertising communication as well as its sales rep’s selling script will differ according to which consumer decision making model actually prevails. In the UAI-based model, to persuade consumers for a brand choice, the ad message and the selling script will focus on the brand’s satisfaction of the ref buyer’s priority ref attribute or attributes that the brand distinctively satisfies. On the other hand, in the inspection-processed-based model, the focus will be on “the big story” about the ref buyer’s “romancing of the outside and inside of the ref brand she is inspecting.”

From the foregoing, no one should conclude that consumer decision strategies are limited to just these two models. The applicable consumer decision strategy depends on the product category and how consumers have gotten used to buying and using the product. For example, consider the simplest case where the use of the product requires the least or absolute minimum of knowledge as in the case of a penlight or toy battery. Here, the consumer has gotten used to a 2-step “no-brainer” process of inserting the battery and then switching on. Whenever the consumer does this, the penlight works and the so does the toy. In this case, consumer brand choice will be restricted to battery brands she has tried. New brands will have a hard time entering the consumer’s decision “rules” because consumers will look at them as too risky.

Other examples: Memo shirts to Ayala Condos

Our research has identified yet another consumer decision making routine for the purchase of shirts. When tempted to try some other brands of shirt, buyers of Memo shirts (a brand of Penshoppe) compare these other brands to Memo. They don’t compare and evaluate all brands including Memo to one another as in the UAI-based model. If another brand compares well with Memo, then the shopper entertains the decision to try this other brand. A definite decision to try comes when the comparison leads to the conclusion of superiority in some priority dimension in favor of another brand.

According to our research, the buying of a house or a condo points to yet another consumer decision process. In considering the purchase of a house, for example, a prospective homeowner will first take into account only brands that meet some “must” requirements. Examples of such “must’s” would be: (1) it must be located in an exclusive village, (2) the village must be far from the pollution of Metro Manila, (3) the area must have access to clean and safe water, and (4) there must not be any squatters or slum areas nearby. In one research, we in fact found a couple who had only one such screening “must.” This couple said: “We won’t consider buying in any real property development unless it’s by Ayala.” Once this screening stage is passed, the consumer then considers only those brands that passed. Then she chooses a brand on the basis of some other criteria like aesthetics and pricing, or even “trivial” reasons like “the country club swimming pool has a life guard who’s a Piolo Pascual look-alike” or “there’s a Chow-King by the entrance to the Village.”

So where does all these leave you and your question?

Firstly, you have to accept the idea that consumers follow a variety of decision strategies that differ by product category and consumer decision-making style.

Secondly, to find out which of these different decision strategies apply in your specific situation and brand, you should observe and talk to your customers. Observe them in action as they are in the process of buying and talk to them about things you cannot explain from what you’ve observed.

If you want to be persuasive to your customers and motivate them for purchase, craft your advertising communication message and sales script for your brand according to what your observation and interview data require.

Repeat your observation and interview efforts every so often. Keep in mind that even consumer decision routines and decision strategies change over time and on different occasions.

For those of you who have been waiting for it, it’s finally out. The Best of MarketingRx (volume 1 for Entrepreneurs) was released this week by InquirerBooks. Available soon at National, PowerBooks or FullyBooked. Keep your questions coming. Send them to us at MarketingRx@pldtDSL.net or post them on our new blogsite: www.marketingrx.org God bless!

The entrepreneur and the marketing mindset

Q: I am still an entrepreneur who wears multiple hats including that of chief marketer/marketing director. I always tell my people that everyone should have a marketing mindset but teaching this mindset or attitude is hard to do.
What are the marketing mindsets that you recommend an entrepreneur possess?

A: Thanks for writing to us. This is a subject that is close to our hearts since both MarketingRx writers are also entrepreneurs. The marketing mindset and attitudes are crucial to an entrepreneur. Perhaps this acronym can serve as a reminder for you and your people. Based on our experience, here’s an overview of the marketing mindset that an entrepreneur like you needs to have.

M - Market-driven. The marketer-entrepreneur is always obsessed with what the market or consumer thinks about his brand (his product, service, company). He’s always observing and listening to what the market is doing --and not doing. What are consumers buying and not buying? (Why?) Good politicians or public servants, who are really social entrepreneurs, are keen to know what issues are important to their constituents or customers. (That’s what we citizens are – customers of the public servants.)

The marketer makes sure that his brand is thought about very often. He knows that what follows “share of mind” is market share.

Marketers are market-driven. They listen to the consumers and act to please and delight them. It’s worth repeating what we said a couple of weeks ago about the right marketing attitude:
Never start planning or deciding on any marketing campaign or program from where you are as a marketer. Instead, always start from where your consumers are.

I – Influential. Author, John Maxwell, says that “leadership is influence.” The marketer needs to be a 360 degree leader. In other words, a person who can influence not only those below him (i.e. his staff or team) but also those “beside” him (those in the organization’s different departments—finance, production, sales) and above him (top management, board, mancom) to be able to execute his marketing plan and strategy.

No wonder, crops of good CEOs are coming from the ranks of marketing who have learned the art of influence.

A leadership mind-set is needed by the marketer even if he doesn’t have the title or position. Before a marketing plan can succeed there needs to be internal marketing or buy-in from the different leaders in a company. Marketers are influencers.

N – Nimble. “Jack be nimble, Jack be quick...” To be able to hurdle the proverbial candle stick, the marketer must have a nimble mindset. Nimbleness connotes flexibility. If the only constant thing we can count on is change, then that means our best marketing plans will go through the fires of change. A nimble mindset will help you guard against frustration. A willingness to accept change and compromise (to a degree that doesn’t compromise integrity and quality) will guarantee quicker than usual execution of your strategy as well. Marketers have a nimble mindset.

D – Discipline. A mentor once told us that the “difference between successful people and failures, are that successful people are those who are willing to do the things that failures often refuse to do.” Many times that difference involves hard work, going the extra mile (so they don’t take shortcuts), being conscientious or meticulous and taking time to study and improve oneself.
Marketing is a discipline. Marketers have discipline—they are not in a rush to do things wrong.

S-Selective. Marketers are singular in focus. Many times opportunities can abound to the marketer, but at the end of the day they must focus. Expanding and going into too many brand extensions, for example, is always a temptation.

Same thing with positioning your brand. You want to be so many things to so many people. But in the end you must choose and sacrifice. Own a “word” or concept in the prospect’s mind and focus on that. That’s what Al Ries and Jack Trout call the law of focus. If your airline’s focus is on “budget” then you must focus on that and sacrifice “upscale.”

The marketing mindset is focused.

E – Enthusiastic. That’s the “E” factor. Marketers are high on enthusiasm. For the true-blue marketer, Marketing is not just a job—it’s a calling. It’s an advocacy. It’s a ministry. It’s an act of service. At one recent conference, the JrMRxer was so amazed at how one marketing director could be so excited about marketing deodorant. He saw himself and the products that he was selling as something that was adding value to society. Without him and his products, the world would be a stinking place to live in. Teenage love and marriages would probably break up because of underarm odor. That was his mindset. He was on a mission and that spurred him to great success.

Success scientists say that nothing of great importance was ever achieved without enthusiasm. Imagine Martin Luther King delivering his famous “I have a dream” speech without the enthusiasm and passion that accompanied it. Would that dream have sold and caught on?
Check yourselves. How excited are you about your product or service? If the “E” factor is absent, perhaps it’s time to move on--or to go and do some soul searching to rediscover the beauty, value and purpose of your brand.

The marketers’ mindset is always enthusiastic.

T –Trust. Marketers have a “trust above all” mindset. Let’s face it. Consumers are growing wary and distrustful of marketers. Read the book, All Marketers are Liars by Seth Godin or the classic, Meaningful Marketing by Doug Hall (of American Inventor reality show fame). They basically say that the winner in the marketing game is the one who is able to tell the truth in the best way possible.

We all want to hear a story that is true and that is worth passing on. Word of mouth marketing works best when the “gossip” about the product or service is true. Or else it dies a quick death.

Recently we were at a sales rally organized by a top developer for a group of real estate brokers. The developer showed a promotional video of their latest development in the south. The AVP said: “The project is just minutes away from schools like…and just a few minutes away from hospitals like Asian Hospital.” The project is in Sta. Rosa and the Asian Hospital is not a “few minutes away.” Nor is it just “15 minutes away from Makati” when everyone but a fool knows that it is only true when travelling at 2am in a Porsche.

You want to build a trust. And that’s not the way to do it.

Marketers are trustworthy. They undersell and over deliver on their promises.

So there you have it. The M.I.N.D.S.E.T. of a marketer-entrepreneur.

Have a blessed weekend!Send your questions or comments to MarketingRx@pldtdsl.net

published in the Inquirer - May 24-08

Foreword for MarketingRx

By Sandy Prieto-Romualdez
President, Philippine Daily Inquirer

In the Philippines, the pivotal discipline of Marketing does not only have its 4Ps; it also has its 2Rs. I am referring, of course, to Dr. Ned Roberto and Ardy Roberto, the father-and-son team of marketer-entrepreneurs who write the Philippine Daily Inquirer’s popular MarketingRx column.

MarketingRx is a pillar of our Business Friday section, edited by Margie Quimpo-Espino. The column’s format is simplicity itself: It begins with a real-world question about Marketing, from businessmen or entrepreneurs, from marketing professionals or business students. The two Marketing doctors take turns diagnosing the problem in great detail, and then offer practical, eminently useful prescriptions.

Dr. Ned (as almost everybody in Philippine business refers to him) brings a lifetime of experience in Marketing and marketing research to bear on the questions, helping an about-to-retire employee realize, for instance, that real money can be made from (and real value added by) marketing to the poor. Ardy’s intensive involvement in interactive media (from the targeted relationship management in Direct Marketing to the possibilities of suki mobile marketing) sheds light on 21st-century problems.

Judging from the questions they continue to field (the Robertos have been doing the column for five years), I can only conclude that, first, many of us in business continue to have Marketing-related ailments, and second, the Robertos have helped nurse quite a few of us to good health. Word gets around.

Hence, this book: a selection of over two dozen columns from the last five years with the most useful advice for entrepreneurs, or those thinking of taking the entrepreneurial plunge. Much of the conversational flavor that makes the MarketingRx column an easy and distinctive read has been retained; you can begin reading that particular chapter with the question that best reflects your problem or marketing opportunity. At the same time, the book is organized as a whole; you can read it from cover to cover, profitably.

InqBooks is dedicated to publishing books out of the wealth of Inquirer material in order to help build a nation of readers. It is therefore a double privilege for me to see this must-read book to print, because it promises not only to form readers but create entrepreneurs as well.

Introduction to MarketingRx

By Margie Quimpo-Espino
Business Features Editor
Philippine Daily Inquirer

Soldiers are usually told ‘Ready, aim, fire!’

Entrepreneurs do it differently—first they fire, then they aim.

Sounds funny but it’s true. But then again this is the X factor of many successful entrepreneurs: the ability to see a market or a need, without the benefit of research.

Most entrepreneurs rely on gut feel when making business decisions. Their success is often determined by their ‘no fail, can’t fail attitude.’

But entrepreneurs do thirst for more objective guidelines in their decision-making. They may not like school much, but they hunger for knowledge suited and relevant to their needs. They will still decide, of course, based on how they feel and what their instincts tell them, but they do listen to research and what the market says.

It is this thirst for knowledge about the market, this guidance from experts (without paying a consultancy fee!), that has made MarketingRx popular among business and marketing professionals, entrepreneurs, and students.

Few entrepreneurs would spend on consultants, let alone commission a market study. But they will always maximize situations and opportunities where they can get free advice about their business.

This does not mean though that they are not willing to shell out good money to listen to experts. Over the past several years, there has been a proliferation of marketing seminars and always, in the midst of marketing executives, you will find entrepreneurs.

The first time I got to know Dr. Ned was when I was a new business journalist with the Philippine Daily Inquirer. The Asian Institute of Management, where he was a professor then, often held seminars and short courses on economics and finance for business reporters. Dr. Ned was often one of the lecturers and I was lucky enough to have been among his students.

Even back then, Dr. Ned already had that uncanny ability to captivate his audience and make market research very interesting, at a time when few paid heed to what the market wanted. The dictum then was create wants and needs for the market.

I cannot forget that one subject of his research was Jollibee’s tremendous success in one of its first provincial branches (this was in the 1980s). His research discovered that consumers would go to Jollibee not for its burgers but for its Chickenjoy, with many families bringing their own rice and ordering just the chicken.

To this day Chickenjoy is Jollibee’s bestseller.

Dr. Ned’s partner in the column, his son Ardy, I met in 1990, just before I set off for a fellowship at The Washington Post. He was then working for a magazine and had asked me to look up a friend.

While Dr. Ned was building his reputation as a marketing guru in the Philippines and writing books on the side, Ardy began his writing career, eventually graduating from a professional management course for publishing executives in Stanford University.

He has certainly put his course to good use. As Dr. Ned has said, his earlier books were not selling until Ardy looked at them and repackaged them. Then they flew off the shelves.

A few years ago, Ardy realized that his role was to help spread the gospel of Marketing, in particular market research. And he knew even then that his dad was, and is, one of the best preachers for this.

I NEVER THOUGHT I would become the editor of this unique father-son tandem. The MarketingRx column started in the Philippine Daily Inquirer in 2003. Just like the Business Features section which hosts it, it was a pioneering effort of the newspaper: the first marketing advice column.

Unfortunately, I cannot lay claim to getting the Robertos to write for the Inquirer. The original idea was coursed through one of our executives (credit should go to Ardy for broaching the possibility of a marketing column; he saw the market’s thirst for such). Of course, when the idea was pitched to me, I readily agreed.

Marketing Rx is more than just a column. It plays a crucial role in providing advice and guidance to entrepreneurs who do not yet have the capability and money to tap experts, who can help them grow their businesses.

Marketing consultants charge an arm and a leg. With the column, the price of practical advice is just the price of the Inquirer—in other words, it’s practically free.

The prescriptions Marketing Rx provides are never placebos. I don’t think any letter writer has ever felt short-changed with the answer to his question. Indeed, the answers are almost mini-lectures on Marketing.

But it does not stop there. The column provides the impetus for entrepreneurs to learn more about marketing research as a rule and their markets in particular. This book makes it so much easier for entrepreneurs as they now have the answers to particular situations they might encounter in one book.

I would go as far to say that Marketing Rx contributes to economic progress in the Philippines—as entrepreneurs get effective advice, their businesses expand, wealth is created, and employment is generated. As Filipinos become economically empowered, politicians will become irrelevant. Once they are irrelevant, they will start acting like the public servants they are and . . . serve the public.

The Best of Marketing Rx Volume 1 and 2 coming soon!

Hi! We're nearing the finish line.

Over some Halo-Halo and Palabok at Razon's in Greenbelt 1, Inquirer books editor, John Nery, and I discussed the production and book launch of The Best of MarketingRx volumes 1 and 2.

John, a schoolmate and friend/classmate of my sister, Elaine, at Ateneo, met with our distributor, Anvil Publishing, who was also very excited about the release of our book.

We're looking at the third week of May--this month!

The first volume was put together with Entrepreneurs in mind. The second volume is for Brand and Marketing managers.

We'll keep our readers posted through this blog.

Welcome to MarketingRx

This is the blog of Ned and Ardy Roberto promoting their upcoming book MarketingRx. More info will be posted here soon.