| November 06, 2017
When I wrote my post about behavioral economics a while back I compared buying a soft drink with buying a car to highlight the different degrees of conscious thought we invest in making a purchase decision. However, I can think of one occasion when I have been forced to think about which soft drink brand to buy and it highlights the influence that brand familiarity has on the purchase process.
So let me take you back in time to my first visit to Japan about ten years ago. Walking back from the (then) Millward Brown office I came across a vending machine at the edge of a park and stood nonplussed for a couple of minutes because none of the brands were familiar to me. These were all new brands to me and the names alone were somewhat off-putting. I did not like the sound of Pocari Sweat or Amino Calpis. Instead I choose C.C. Lemon on the grounds that I know what "lemon" means.
If we frame this decision in terms of mental and physical availability then all the brands were available when and where I wanted a drink. However, the only thing that was mentally available was “lemon”. This is why we always find strong relationships between brand awareness and trial and even awareness and last purchase. The more familiar people are with a brand, the more likely they are to buy it.
In his book ‘Gut Feelings’, Gerd Gigerenzer provides us with a number of examples where recognition alone provides the basis for making a decision. Gigerenzer suggests that recognition works well because it infers a value without the need for further information. It basically means ‘go with what you know’. And for most habitual purchases that works.
But familiarity alone does not guarantee purchase, and recognition is only the first heuristic to be applied to any decision involving choice. It is applied only if there is just one option that is recognized. What if there are multiple options recognized by the decision maker? The it all comes down to context and how quickly the brand is associated with that context.
People buy different brands for different needs. I buy Coca-Cola for a refreshing lunchtime drink when hiking. I rarely buy it otherwise. Would I buy Pepsi instead? Only if Coke was unavailable. Physical availability will determine whether people can even find their usual brand or not. From the marketers' viewpoint, this emphasizes the importance of the in-store environment because for someone to recognize their brand it must be stocked and easily visible on shelf.
So why do I have this innate bias to buying Coke instead of Pepsi? Unfortunately for Pepsi I suspect it originates long ago and far away when as a child I was given money to go buy a bottle of Coke on a hot summer’s day. And years of exposure to advertising have kept the brand salient since. But would I have bought Pepsi if it had been in that Japanese vending machine? Yes.
So physical availability and brand recognition have a huge influence on whether a brand gets purchased or not but would recognition alone decide whether someone pays a price premium for a brand? What do you think? Please share your thoughts.