Thursday, February 27, 2014

What makes Customer Buy Your Products?

Answer to this question is quite tricky. First we need to define who is the customer, next we need to classify the product and then depending on customer segment - we can identify reasons why customer will buy your product.

Who is the customer?

We can broadly classify customers into two categories:

1. Individual Consumers: i.e, people like you and me.
2. Corporate Customers: Organizations, Companies, & Governments.

Products can be classified into three main categories

1. Utility Products: Eg: Trucks, insurance,
2. Image or Prestige Products: Eg: Cars
3. Comfort Products: Eg: Car Seat

Products can also be classified based on pricing/value.

1. High Value/Priced products
2. Low priced products

Buying Behavior

Customer show different buying behaviors when dealing with different products. The concept of perceived value as the basis of buying works mostly on Utility Products and for corporate customers - where the prices/costs are high & there are checks/balances on purchases.

Also see:

Impulsive buying is another factor - which is mostly seen in low value/cost utility products or even in high priced/value products.

Impulsive buying is seen even in organization - where a single individual makes the buying decision based on his instinct. For example, buying office furniture.

Impulsive or Instinct buying decisions are difficult to model - but can be easily exploited. 

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