The Buying Cycle and the Moment of Purchase
For example, Laura is looking at her yard, and she would like a pond with fish. She thinks off and on about this for a few days. This is the awareness-of-need phase. Laura begins to ask friends and family about fish
Ponds. She slowly realizes that she needs a fish pond with a filter and pump. She learns about fish and finds that large Japanese fish called Koi would be best. She talks with coworkers and neighbors. She begins to use the Web and search engines. She is in the research phase. Finally, after several weeks, she has narrowed it down to the general type of pump and the breed of Koi. Immersible or external pump? Asagi or Koromo Koi? She compares the products. Finally, she knows what she wants (it fits her yard, her needs, her budget, and her tastes) and Laura turns to the Web to find a vendor who can deliver what she wants. This is the purchase phase.
In the awareness, research, and comparison phases, Laura aren’t ready to buy. She is learning about the products. She is looking for information. She will ignore ads and “buy now” pages. In the purchase phase, Laura has decided what she wants. She knows the make, model, and features. She also knows the price. She won’t pay attention to other products. She is looking for a vendor who can reliably deliver her selection.
The length of the buying cycle depends on the product or service. For low-cost consumer products, this may be a few days. For large purchases, this can take a month or so. For industrial equipment, this can take six
Months or more. For real estate, this can take six years or more.
Interview: Bob Platkin, Director of Marketing
Bob Platkin is perhaps best known to the American public for having repositioned two Major brands in the 1980s. He turned A.1. Steak Sauce into a condiment for hamburgers. He also developed the marketing strategy for the famous Gray Poupon mustard TV Commercials, where two wealthy men in a Rolls-Royce “pass the Gray Poupon.” Bob has held senior marketing positions at Nabisco/Heublein (A.1. Steak Sauce, Gray Poupon Mustard, Smirnoff), Stanley Works, Colt Firearms, the American Can Co. (Northern Tissue),
And Ted Bates Advertising (Colgate-Palmolive). Bob founded Urbina Design, an electric appliance company, and continues to consult with companies on marketing strategies.
Q: What was the story behind Gray Poupon? Why did you take that approach? A: Gray Poupon mustard was a sleepy niche item on the gourmet shelves at supermarkets. They advertised in the three leading high-end gourmet magazines. It was sold as an ingredient for gourmet recipes. The product had a nice 5%–10% growth every year. We found we had 90% distribution in supermarkets but only reached 30% of households. My strategy was to sell Gray Poupon mustard for sandwiches and hot dogs. This was very
Bold. They had an extremely profitable product, but I was telling them to mass-market it. We relaunched the product as a condiment. Don’t talk about white wine. Don’t show French recipes. We made it into an everyday spread for sandwiches. We even did ads with “hot dogs.” To get the public familiar with it, we put it in airline in-flight meals. Gray Poupon took off at about 20% annual growth and didn’t stop growing for a decade.
Q: How did you grow A.1. Steak Sauce? A: We forced distribution through advertising to create a demand for A.1. Steak Sauce. Normally, you don’t force distribution through advertising. A company would first get
Their product distributed and then do advertising to sell the product, not the other way around.
We put coupons in the Sunday papers. By creating demand, supermarkets had to stock it. By tracking each coupon’s unique ID, we could calculate the marketing costs. We used the data to tune the numbers to reflect reality. We didn’t have computers. We didn’t even have spreadsheets. This was all done by hand with pocket calculators.
To keep things manageable, we started in one city. After two months, we had revenue. We used the profits to expand in the next city. We also used our data to calculate customer lifetime value. We compared customers who bought a second time to those who only bought it once. By knowing the volume of repeat business, we could sell the product to stores in the next city. We used data to continuously improve our process and grow big in a very short time.
A.1. Steak Sauce had been known as a steak sauce, so we repositioned it for hamburgers. People put it on hamburgers and felt like, “Hey, I’m eating steak!” Another company was Stanley Tools. Stanley tools were sold in Wal-Mart. Every Monday morning, Wal-Mart gave large spreadsheets to the executives, including myself. I would analyze why a product didn’t do well in a region. On the converse, products that did sell well were quickly replenished. We looked at the variables, isolated the leading causes, and tried to solve those. We used Wal-Mart Retail Link, which was their analytics and sales performance tool. It used SKU numbers and checkout scanner data.
Q: What is the difference between marketing then and now? A: Back then, if you had the money, you were king. By creating TV road blocks (i.e., buying up all of the ads on prime time, which forced everyone to see your ad and also kept your competitors out of the picture), the retailers had to stalk you!
Google is like the TV road blocks of the 1980s. By being at the top of just three search engines (Google, Yahoo!, and Microsoft), you get access to over 98% of your market. Back in the 80s, supermarkets and retailers were formidable barriers to entry. To sell your product, you had to get into the supermarkets. Google obliterated them. Anyone can set up a website, run an online campaign in Google, and be in business. What’s even better is when you show up in the unpaid results. When people are looking for information and they find you in the unpaid listings, they will consider your site to be authoritative.
You can also buy keywords, banner ads, video, and so on to create repetition. If you dominate the paid advertising space in your market or industry, you can spend the majority of your budget to get a good market that is ready to purchase. This expands your customer base, making you yet bigger.
Q: Can you give us some tips about marketing? A: The share of advertising matched the share of the market. If you had enough money, you could buy your market share. If your ad budget was 40% of the overall market’s ad budget, you’d end up with 40% of the market. Madison Avenue gave you money to blow, and it worked! Great advertisers could take an everyday product and quickly turn it in a million-dollar success. Most of your advertising went to positioning.
We figured out the unique selling point (USP). The USP is the features and benefits that distinguish a company. For example, your research found that the three most important factors for your product were flavor, texture, and price. Now if your competitor was advertising on flavor, you couldn’t advertise on flavor because your money would end up supporting your competitor. It would be better for you to advertise on texture.
Another thing: If you advertise on flavor, then your product must support the advertising. If you say your product is crispier than the others, then it must be crispier and appear crispier. If it’s not, the public will reject your campaign.
A company can have a single message for a product. Advertisers can create the image for the product. For example, Volvo created the concept of safety. With a huge propaganda campaign and countless repetition, they make safety seem like a real issue. People buy Volvo because the car is “safe.” Volvo owns this market now.
Repetition is important. After three or four times, a person remembers an ad. This is why the marketers threw large budgets at the product’s positioning.
Don’t spread yourself too thin. Control the message at a micro level to dominate niches until you are a share leader in one market channel and use the profits to dominate the next marketing channel. Bootstrap until you have substantial profits, then go for mass market.
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