Public reviews have been among the most effective factors influencing consumer purchasing decisions. They give consumers a general overview of what to expect if they purchase your business. Companies like Payoneer, Grammarly, Uber, and others leverage this daily. That is why you will always see them put their Trustpilot rating under all emails, websites, and everywhere else. Five- and seven-star hotels get this marketing insight and other marketing theories they use from this idea.
What is Marketing Theory?
Marketing theory is how a brand or company induces voluntary change by selling ideas or lifestyle changes that influence the target audience or society.
According to Kotler (1967), every product has three levels: the core level—the benefits; the actual level—the main product, referring to the packaging and design; and the augmented level—measures taken to help the consumer use the product.
Marketing Theory simply states that for the maximization of sales, a company must position its products or services so that consumers need them or believe they can benefit from them.
Businesses employ several marketing theories to influence buyers' purchasing decisions. These include buyer behavior, marketing insights, and market segmentation.
How Public Review Influences Consumer Buying Decisions
Buyer behavior, also known as consumer behavior, involves factors influencing consumers' purchasing decisions. Emotions, situations, psychological and environmental factors, personal preferences, societal influence, and several others often influence consumer behavior.
Businesses using excellent public reviews can easily wow consumers into patronizing them. According to UK Web Motion, 89% of consumers consult reviews before making purchases above £50.
Public reviews play an effective role in consumer behavior. People will most often patronize a brand that their friends have used before. Likewise, a great public review will influence people to want to patronize your service.
Businesses can easily leverage this by incorporating different marketing theories into their operations to reach their target audience and generate more sales.
Impacts of Public Review on the Distribution of Market
Market segmentation divides a company's or brand's target market into approachable groups. Many companies adopt target marketing techniques in their market segmentation. The strategy involves dividing the market into segments and developing products or services for those segments.
Public review can also come in handy for market segmentation. For example, everyone knows 5-star hotels are very expensive, and this helps them target their target audience, the rich who like a life of luxury. They can also mention booking a first-class flight instead of a regular one.
Apple primarily targets the American first class, which is why the iPhone appears like a luxury product in most other countries, especially the developing ones.
The new generation is more into online shopping than patronizing brick-and-mortar shops. One excellent reason for this may be the ability to rate the online store they use based on their star ratings. Segmenting a market is likely to produce several possible customer groups; the enterprise then has to evaluate the relative attractiveness of the market segments identified and select the target segment (s) it will seek to serve.
A targeting strategy aims to understand the consumer's needs and wants. Market segmentation can be divided into several parts:
Demographic Segmentation
This is the division of consumers into groups based on age, gender, income, education, social status, family, life stage, and occupation. Understanding the age group and other demographic factors helps you learn more about the consumer.
Geographic Segmentation
It is the division of consumers based on their country, city, density, language, climate, area, and population.
Psychographic Segmentation
Consumers are segmented based on their purchase, usage, intent, occasion, buyer stage, user status, and engagement.
Behavioral Segmentation
It is the division of consumers based on their purchase, usage, intent, occasion, buyer stage, user status, and engagement.
Impacts of Public Review on Market Research and Operation
Market Insights are not complete without an effective understanding of what people think about your business. What are people saying about your business? Do they consider it an amazing experience or something terrible?
Market insight means conducting adequate research into things that can positively influence consumer behavior. Marketing insights are reasoned thoughts and conclusions supported by an analysis of data and information established from marketing research, surveys, etc.
For marketing purposes, insights result from applying human thought and reasoning to analyze data, sorting out, and producing a directional change in the way we expect or act. Insights begin as data, filtered through layers of analysis, acted upon by thought and reason, and eventually become a directional change agent.
With public rating, companies can check out how they rank against their competition, understand what they can improve on, and identify what their customer like and don't like about their services. To achieve this, businesses should first start by identifying the purpose first, learning more about the company's outlook, comparing the competition, gathering enough data, analyzing their findings, and finally, implementing their analysis can help influence consumer buying behavior.
How businesses can combine these three marketing theories with Public Reviews for business growth.
Businesses can easily use the three marketing theories for effective growth. This can begin with effective marketing research through market insights.
Target the most effective market segment that works for your industry and adopt the most effective strategy to influence consumers' purchasing decisions. Positive general reviews benefit a business by improving the brand's reputation, increasing sales and traffic, enhancing ranking on search engines, and boosting profitability.
Customers are more likely to purchase from a website with custom reviews than from a website that doesn't. Displaying reviews gives potential customers more confidence in purchasing decisions and reduces doubts, influencing consumer behavior.
Zan Mo, Yan-Fei Li, and Peng Fan (2015) wrote that consumer Reviews are reviews given by consumers related to information about evaluating a product about various aspects; with this information, consumers can get the quality of the product they are looking for from reviews and experiences written by other consumers who purchased products from online sellers before.
For instance, using 5-star hotels as a case study, most customers would want to patronize 5-star hotels more than 3-star ones because of previous customers' positive and convincing reviews.
The primary goal is customer satisfaction, which can not be achieved if previous customers leave bad or negative reviews.
A good case study is the use of a public review system like Uber's, where consumers can order different classes of cars and support their purchasing decisions with comfort, class display, satisfaction, and other factors.
Conclusion
Positive reviews help build brands' reputations, increase sales and traffic, enhance search engine rankings, and boost profitability. Customers are more likely to purchase from a website with custom reviews than from a website that doesn't. Displaying reviews gives potential customers more confidence in purchasing decisions and reduces doubts, influencing consumer behavior.
