On Influencing Purchasing Decisions
There are many articles and blogs on marketing and what is involved in getting people to buy your product. One such resource is an article called, “9 Things to Know about Influencing Purchasing Decisions,” that describes nine reasons people may buy your product. Tip #3 and tip #4 were particularly interesting because they stated, “People Don’t Often Know Why They Prefer Something” and “Mass Leads the Way,” respectively. In particular, the third tip focused on a group setting where “suddenly there were all these sort of social pressures, e.g. what they ‘should’ choose, leading the answers away from what the people actually liked,” according to the article. Although these tips provided were use to form different conclusions, when looking at these statements from the perspective of networks, they certainly make a lot of sense. Similar to this article, an online marketing textbook has a chapter called, “How People Make Buying Decisions,” which focuses on the different aspects that may affect decision-making, such as store design and societal influences. Specifically, under the section for “Situational factors,” the text describes the negative or positive effect of “crowding or herd behavior,” stating that, “crowding can have a positive impact on a person’s buying experience. The reasoning behind this phenomenon, according to the text, is that “If people are lined up to buy something, you want to know why. Should you get in line to buy it too?” When looking at these statements found in both marketing resources described above, I noticed that the decision-making process involved when buying a product cannot only be explained psychologically, but also using network-related concepts from the course.
Particularly, in chapters 16 of the textbook by Professors Easley and Kleinberg, we learn that if you are deciding between which two restaurants to enter- one empty, and one full- then you will likely enter the restaurant that is already full, even if you had already read reviews and planned to enter the empty restaurant before. The rationale for this is that if you believe each diner also has some information about where they will eat, then it might make sense to also follow the crowd and imitate the choices of the other diners to eat at the restaurant that is already full. Thus, ‘herding’ or an information cascade has formed because the decisions of people are being influenced by others before them, regardless if the person’s own private information recommends a different choice.
Therefore, information cascades can be used to explain why “crowding” around a store to buy a product can be considered a positive thing- because other people pass by and assume that the people in line have other private information about the product, and thus they also imitate the behavior. Additionally, it is also important to note that although imitation may also result from a ‘social pressure to conform’ that grows stronger as the group gets larger, which might have been what the article also referred to as “social pressures,” the process leading to this conformity can also be ‘rooted in’ herding or information cascades because passerby may have ‘rationally decided’ that people standing in line may know something that they didn’t know. Thus, this results in future people making decisions based on inferences from the actions of earlier people, and joining them regardless of what their own private information says; therefore, also getting in line to purchase the product or good as well.
Sources:
Article- http://conversionxl.com/9-things-to-know-about-influencing-purchasing-decisions/
Textbook- https://new.edu/resources/consumer-behavior-how-people-make-buying-decisions