How to Influence Buyer Decisions
Question: What are the key success factors associated with price pack and channel strategy? How would you measure its success? K.
Answer: OMG! I love this question because I had no idea what this meant. I traded several messages with the reader to learn about this. Here is a video he sent me to help me understand.
If you don’t want to watch the video, the definition provided is: Price pack is a term used in CPG (Consumer Packaged Goods) and retail to mean choosing the right pricing and packaging for different channels.
I’m not a retail expert, but here is what I’d be thinking:
- What decisions are the buyers making?
- How do they make those decisions?
- How can we influence the right decisions?
Buyers Decision-Making is Vastly Different
We all agree that buyers are different. People who shop at Walmart are different from those who shop at Nordstrom. Hence, you will need to answer these questions for different market segments. Let’s brainstorm a little on what we might find as we do this research.
What decisions do YOUR buyers make?
- Where to shop
- What categories of products to buy
- Which brand to buy
- Which style / flavor to buy
- What size to buy
- What quantity to buy
Surely there are many more decisions buyers make.
Conjoint Analysis: Research Buyers’ Decision-Making Process
How do they make those decisions? For each one (or you could probably combine a few or many together), you can execute a research project. I’m a huge fan of conjoint analysis as a way to understand how different buyers value different things. Conjoint Analysis is a survey-based statistical technique used in market research that helps determine how people value different attributes (feature, function, benefits) that make up an individual product or service.
However, conjoint analysis can only validate ideas you already have. You may want to do many customer interviews to discover new ideas of behaviors or product enhancements you might want to test.
Other factors in the decision-making process probably includes ideas like:
- Do they remember the price of your product?
- Do they have a price expectation?
- Do they wait to buy your product at a different store?
- Do they buy because they ran out and need it quickly?
Influencing Buyer Decisions
Finally, how can we influence the right decisions? For example, after doing this work you decide you want to get more Walmart shoppers to choose your product over the competitors. Then, what are the things you can do? Test out your theories using conjoint analysis.
To summarize all of the above, you want to build a consumer behavior model of your buyers. Then decide what you want to try to influence and measure those results.
For those of you who are retail experts, how did I do? This is just me using pricing common sense.
Mark is a pricing expert who helps companies understand value, how to create it, communicate it and capture it. He has a PhD from U.C. Berkeley and an MBA from Santa Clara University, plus 25+ years pricing experience. As an educator, speaker and coach, Mark applies innovative, value-based pricing strategies to guide growth and increase profits for large and small companies.