A fundamental point that companies should know in the food and beverage industry is, “How do consumers choose?” Consumers in those industries are faced with a myriad of products. Just think for a little, how many beers a consumer can choose among, how many wines, how many restaurants, how many drinks how many… in all of those markets there are hundreds, thousands of alternatives among which each single consumer can choose. The point is how can a consumer choose? Choosing is a matter of basically comparing alternatives. Any consumer has some alternatives among which to choose. Here there are two very important points for companies to know: First of all, what are the alternatives that the consumer knows? We said that every consumer is only able to remember a few alternatives even though, in the market, there are many more alternatives. This is important from a competitive point of view because it means that for a company the fundamental first thing is to be in the memory of consumers, or to reach consumers where they are choosing the product among the different alternatives. This is the first point. The second point is how do consumers choose? What is the process? What does it mean, basically, to compare alternatives and among what alternatives are they compared and based on what features? The point is that every consumer, when choosing, collects information about features which are relevant to his or her choice. The point for a company is to know what these features are. What are the most important features that consumers take into consideration. Basically consumers collect information about product features, so the features of the value proposition, so the product and other features are basically making the value proposition. The product, the price, the availability, the image, and the reputation, are the quality clues that the consumer can collect. How do you compare them? We said that, basically, consumers try to get benefits out of products, out of value propositions and they know that they have to make sacrifices. In the minds of every consumer, they have, basically, a connection between the benefits and the sacrifices and the features of the value proposition. For example, I know if I go for convenience, convenience is related to price, it’s related to availability, and it’s related to service. Basically a consumer would choose when he or she sees a connection between the features of the product and the value proposition and the benefits he or she wants to get. But actually not every choice is based on a rational process, although rational maybe is not the right word, on a cognitive process, that is to say, consumers compare having a clear awareness of the fact that they are comparing so that everything is clear to them. This happens in a number of purchases but for other purchases consumers rely more on emotions, and it depends basically how important the symbolic benefits of a value proposition for consumers are. Emotions they use tend to rely on very few features of the value propositions that the few characteristics which to them are related to their emotions the emotions they want to get. There are cognitive processes where the consumer tries to compare more alternatives based on different features, and there are more emotional choices which are linked to fewer features of the value proposition. What affects using of one process over the other one? There are many different factors at the basis of the use of a cognitive process or a more emotional process. For example, if the purchase is planned or not. What does that mean? For many purchases, we consumers, plan them in advance. In advance we collect information we compare information, then we go online or offline and we buy the product. If a purchase is planned, we tend to use a cognitive process. We tend to rely more on the information which is available. On the other side, If the purchase is not planned and sometimes it is based on impulse, it is mostly based on emotions. There is something which calls me for buying the product so it induces the purchase when I see the product, I see the service, or I interact with them. This is the planning of the purchase. But there are other factors that can impact the fact that consumers rely on a more cognitive or a more emotional process, and actually it is based on the complexity of the process, that is to say, the process is complex when the consumer decides to devote more cognitive effort to collecting and comparing information, comparing alternatives and then reaching the final decision about the choice. For example, one very important characteristic is consumer involvement. What does involvement mean? Involvement means that one product category is very relevant to the consumer: relevant because it is important for the consumers’ values. It’s important for the consumer's beliefs. If I'm fond of and an expert of wines, they are very important to me. I’m very involved in wines. What does that mean? If I'm involved I tend to spend a lot of time on wines, not only consuming wine but also reading the reviews about wines, trying to interact with other people in my social network, trying to figure out what their assessments of different wines are. I tend to figure out what the new wine are, the ones I can buy and consume. Involvement increases the rate of complexity of the purchase because it moves consumers to devote more time to collect information, compare alternatives, and then buy. A consumer who is less involved would basically devote less time and less cognitive effort to information collection, information comparison, and comparison of alternatives. One other very important characteristic is perceived risk. What does perceived risk mean? We consumers tend to associate a risk to every purchase, but risks can be of very different characteristics. For example, we can have a performance risk. A performance risk means that we are not able to anticipate the performance of the product, that is to say, what the product is able to provide me with, and these in experiential products like food and beverage products is a very important perceived risk. One other risk is the financial risk. What is a financial risk? It’s a risk connected to the value of the product from a monetary point of view: the price. Basically the higher the price is the higher the perception of the risk is. Why? Because if the product is dissatisfactory, so the consumer is not satisfied with the product he or she perceives he or she has lost money. This is the financial risk; then there are other kinds of risks for example, the psychological risk. What is a psychological risk? It’s a risk which is basically linked to the self-image, the self gratification, and the self perception that a consumer has. Let's imagine I consider myself an expert on wine. What happens when I'm a wine expert? I tend to buy wine that confirms the image I have; but if I buy a wine and it isn’t good at all, it’s completely dissatisfactory, this can have a negative effect on my self-image. I can feel as if I’m not the expert I thought I was. Then there are social risks. What are social risks? They’re the risks connected to the image I have in my social networks, the esteem I want to get from my peers, the status I have among my peers. For example, again, if we keep our wine example, if I buy a wine for a dinner with friends or acquaintances and the wine I bring is very bad or is considered not as good as I thought, I feel that my social image is negatively affected by the wine; so it is a social risk. The higher the risk that consumers perceive is, the more complex the process is. That is to say, a greater combination of emotional and cognitive efforts will be given into the process. Then there are other characteristics, for example, the consumers’ expertise. We said that some consumers in food and beverage industries are experts and some not. Most consumers are not experts at all, maybe they are very familiar with the products, but they aren’t an expert. What happens if a consumer perceives him or herself as an expert or not? When he or she is an expert he or she basically considers him or herself as a reliable source of information. A consumer who considers him or herself as an expert tends to rely mostly on past experiences when he or she has to evaluate a product. A consumer who perceives him or herself as a non-expert obviously needs more information to collect and so it increases the complexity of the choice and so maybe the cognitive effort put in the process itself. Then there are other characteristics that can be considered. For example, the availability of a product. If a product is very available. The consumer can easily find information about the product. If the product is exclusive, it's more difficult to find a product and so it is also more difficult to connect with the product in terms of information, in terms of purchase, and so on and so forth; and in food and beverage businesses many companies tend to position their products in terms of exclusivity. That is to say, making their product less available in the market. Again, for a product like this, consumers will find it more difficult to make a choice because the availability of the product is relatively limited. These are the different features that affect the complexity of the consumers’ choice processes. The more these features are present in the choice the more complex it will be, and so one way that consumers have to reduce this complexity is to increase the cognitive and emotional and effort to put into the process.
