- How consumer choices have become more rational—and more difficult to influence.
- Relative thinking and its diminished impact on purchasing behavior.
- Why the Internet has turned marketing theories upside down.
The explosion of information made available by the Internet has caused a radical shift in consumer purchasing behavior, due largely to a migration from relative to absolute decision making (judging an item on its own merits rather than compared to other products) and the influence of social media (judging on popularity and user reviews). These factors have increasingly undermined the effectiveness of traditional marketing campaigns and marginalized the ability of marketers to influence and predict buyer choices.
Targeting, positioning, and top-of-mind approaches have all lost value. Brands are less effective in influencing perceptions of quality and consumer loyalty is less reliable as a purchase driver. This environment lowers the barrier of entry for lesser-known brands—as long as they have a good product—but also opens the door for established brands to diversify into seemingly unrelated categories. To be successful, you need to reevaluate the role of marketing and question your previous assumptions, track social media chatter and manage your reputation, and capitalize on web-based metrics that give you real-time feedback on what works and what doesn’t in today’s two-way communications with customers.
Itamar Simonson’s research covers consumer decision making and brand evaluation, buyer behavior, and marketing management. Professor Simonson has been at Stanford since 1993. He previously taught at the University of California, Berkeley and earned his PhD at Duke University. He is the author or co-author of many books and articles, and his is
Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information.