Sending Signals to the Consumer to Make the Right Buy (Opinion)

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Risk aversion. Sounds like some highfalutin’ investment strategy reserved for the 1 percent, doesn’t it?

Well, whether we are in the 1 percent or the 99 percent, most all consumers consider risk when making a buying decision. And the makers and marketers of products and services would do well to consider how to reduce the notion of risk and elevate confidence as they target selected consumers with their branding message.

Consumer goods are most affected by perceived risk. Am I buying the product that will best serve my needs? Does the product perform as promised? Am I paying too much or just the right amount? Or am I paying too little?

Wait. What about that last question? Do consumers really worry they have paid too little? Absolutely. Focus group research is very clear about how the selection and purchase of certain brands vest the individual with a sense of self-worth.

Brands, it turns out, are an extension of the consumer psyche. They demonstrate who the individual consumer thinks he is and who he wants friends and associates, even strangers, to think he is.

In this game of show (not tell), price becomes one of the signals the brand uses to promote quality. The marketing strategy called “signaling” is key to building and sustaining a brand.

Signaling is considered one of the most effective tools affecting purchase considerations and consumer choice. It is used to shape or reinforce the social identity of the consumer, satisfying a consumer’s ongoing search for meaning and community.

Pretty brainy stuff. What this marketing mumbo jumbo really means is that we as consumers use the perceived brand attributes — what a product stands for, what it promises, what it conveys to others — as a way to satisfy not only our required need or use of the product, but also what the product says about us.

Do you buy Bill’s Catsup or Heinz Ketchup? Cut-Rate Cola or Coke or Pepsi?     Well-known brands have more to lose if they don’t live up to their advertised promises. Or at least that’s what our consumer conscience tells us. That’s why effective advertising is so important to the creation and maintenance of premium brands. The signaling to the consumer that comes from the advertising — information and images the advertising messages convey — creates a perceived credibility in the product with which consumers want to be associated.

With the advent of the Internet, consumers now have more investigative tools at their command than ever before. One would assume the ability to search the Internet for information about a product would dilute the effectiveness of advertising and level the playing field in the competition between big brands and commodity products.

Assume not. More information might be creating more confusion and chaos in the marketplace. If so, the Internet might very well have created an information platform that calls for better advertising strategies in order to differentiate products, inform consumers about product attributes and confirm the credibility brands must have to be successful. Searching the Internet to compare gives the brand marketer an opportunity to complement the advertising message and reinforce it, clearly showing the difference between the equity, and equanimity, created by the brand and the simple utility of an off-price commodity.

Brand loyalty informs the consumer and helps make buying decisions simpler. And as we continue to move down the technological path of information overload, savvy consumers may yearn for clear signals from our brands to help us navigate wide varieties of everyday consumer products, as well as specialty goods.

Whether it is saving money to help us look smart, or paying a premium to make us look cool, it’s all about information — information from advertising or Internet searches to reduce the risk of decision-making and fulfilling our desire to participate successfully in the marketplace, and making sure it shows.

Craig Douglass is an advertising agency owner and partner with Zoe and Ernie Oakleaf in InFocus, LLC, a Little Rock-based focus group research company.