By Aussie marketers.
The four key tools of marketing, price, product, promotion and place are poorly understood by Australian marketers, according to a report from marketing services firm Salmat. The report revealed that 69% of Australian marketers can’t name the 4Ps and struggle to understand consumer behaviour.
As well as lacking knowledge around the marketing basics the findings, which compares consumers’ shopping habits with the perceptions and practices of marketers, uncovered a strong disconnect between channels that marketers invest in and channels consumers use to source information to make their purchase decisions, with only one in six of the top channels matching.
The report looked at the importance of understanding the 4Ps in the creation of marketing strategies and how their influence on consumer behaviour, particularly around the way they research and buy, is crucial for success. The majority of consumers’ surveyed said price is the number one influence on their purchase decision, and is a key driver that would convince them to switch brands. Almost two thirds said they are willing to try new brands and products if they are on sale or discounted. On average, across different product categories, one third of consumers said they would switch brands if the price of a product they regularly buy increases.
Product is the second biggest influence on purchase decisions and a major driver for consumers going in-store to buy, because they can see and feel the product before they purchase and discern the quality of the product. The third biggest influencer is the distribution of the product, also known as place, with consumers reporting that free shipping is important, with 46% of consumers shopping online because they can get the product delivered direct to their home or work.
“Unsurprisingly, promotion was low on the priority list for consumers, as they generally don’t want to be advertised to,” Salmat head of sales and marketing, Andrew Lane said. “However, they do seek information to inform their purchase decisions so it’s important your brand is visible on the channels where consumers prefer to source purchase information from.”
Salmat’s research also showed a clear gap between the channels that marketers use, and the channels that consumers use to inform their purchase decisions. Of the top six channels listed by marketers and consumers, only one matched, which was the brand website.
The report highlights that brand advocacy is highly influential in customer purchase decision making, with recommendations from friends and family being the top source of information used. Further, two in five consumers said online reviews influenced their purchase decisions. When shopping in-store, over one third said they often go online to check consumer reviews about a product before buying, and almost two thirds said it is important or very important for a brand to have positive online reviews to maintain loyalty to a particular brand.
“There is a clear disconnect between what channels marketers think consumers are engaging with, and what consumers are actually using. Social media for instance is a powerful tool for driving awareness and interest and is also very powerful in the loyalty and advocacy space,” he said. “However, it does not appear to have as much direct influence on consumer purchase decisions compared to other channels. Marketers may benefit from shifting some investment and training to channels such as letterbox advertising and sampling which are all influential purchase levers for consumers, despite the increasing use of digital channels broadly.”
The data also suggested that marketers believe consumers don’t have much thought or control over most of what they buy and tend to be impulsive, however most consumers say their purchases are thoroughly researched and intended.
“In terms of investment, the research showed online and offline channels continue to be equally important, with Australian consumers taking the time to research purchases thoroughly, and moving between a mix of online and offline channels to do so. Therefore, it is crucial for marketers to mix traditional channels with digital marketing to ensure they’re reaching and converting more customers,” Lane said.
Advocacy is also an important influence on consumers, yet marketers are finding it increasingly challenging to create customer loyalty. “Two in five consumers do not consider brands at all when shopping, while a further 18% are loyal to just one or two brands and 23% are loyal to three to four brands. However, our research shows that consumers are still willing to advocate for brands, with respondents almost three times more likely to write a positive review than a negative one. With this in mind, it’s important for marketers to embrace reviews, especially as new players like Amazon enter our local market.
“Overall, marketers need a better understanding of the key marketing principles in order to reach potential new customers, re-engage prior customers to grow brand loyalty, and understand what channels to invest their budgets into to garner the strongest return on investment,” he said.