A fundamental point that companies should know in food and beverage industries is how do consumers choose. Consumers in those industries are faced with myriad of products. Just think for a while how many beers a consumer can choose at the mall, how many wines, how many restaurants, how many drinks? How many in every of those markets there are hundreds, thousands of alternatives among which every single consumer can choose. So the point is, how can a consumer choose? Choosing is a matter basically of comparing alternatives. So, any consumer has some alternatives among which to choose. Here, there are two very important points for companies to know. First of all, which are the alternatives that the consumer knows? We said that any consumer, every consumer, is able only to remember a few alternatives although in the market there are many more alternatives. So 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. So, to reach consumers where they are choosing the product among the different ones, the different alternatives. So this is the first point. The second point is how do, that is, the consumers choose. That is to say which is the process? What does it mean, basically, to compare alternatives? Among which alternatives are compared, and based on which features? So the point is that every consumer, when choosing, collect information about features which are relevant to him or her choice. So the point for a company is to know which are these features? Which are the most important features that consumers take into consideration? So basically, consumers collect information about product features. So the features of the value proposition. So the product and other features basically making the value proposition. The product, the price, the availability, the image, the reputation, the quality clues, other quality clues that the consumer can collect. And then how to compare? We said that basically consumers try to get benefits. Out of products, out of valuable propositions, and they know that they have to make sacrifices. In the minds of every consumer, the average consumer has, basically, a connection between the benefits and the sacrifices, and the features of the value proposition. So, I know, for example, if I go for convenience, convenience is related to price is related to availability is related to service. So 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 choice. 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 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 on how important are the symbolic benefits of a value proposition for consumers. Emotions based, they tend to rely on very few features of the value propositions. The few characteristics which to them are related to their emotions, the emotions they want to get. So there are cognitive processes, that is to say where the consumer tries to compare more alternatives based on different features. And there are more emotional choices, and the emotional choices are mostly linked on a few or fewer features of the valued proposition. What does affect the usage of one process or the other one? There are many different factors, basically at the bases of the use of a common process or a more emotional process. For example if the purchase is planned or not. What does it mean? That for many purchases, we consumers plan them. That is to say we plan them in advance so in advance we collect information, we compare information, then we go online or offline and we buy the product. So if a purchase is planned, we tend to use a cognitive process. That is to say 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. That is to say, there is something which calls me for buying the product. So, induces the purchase when I see product, I see the service, or I interact with them. So, 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 processes. 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 the collection of information, to the comparison of information, to the comparison of the 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 consumer's values. It is important for the consumers beliefs so if I'm very fond, or very eager, I'm very expert on wines to me wines are very involved I am very involved in wines. What does it mean? That if I'm involved, I tend to spend a lot of time to wines. Not only consuming wines, but also reading reviews about wines. Trying to interact with other people in my social network. Trying to figure out which is or which are their assessments or their evaluations of different wine. I tend to figure out which are the new wines I can use, I can buy, I can consume. So, involvement increases the rate of complexity of the purchase because it moves consumers to devote more time to collect information, compare alternative, and then buy. A consumer who is less involved would basically devote less time, less cognitive effort to information collection, information comparison, comparison of alternatives. One very important other characteristic is perceived risk. What does it mean, perceived risk? That we consumers tend to associate to every purchase a risk. 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. It is to say what the product is able to provide me with and these inexperiential products like food and beverage products is a very important perceived risk. One other risk is the financial risk. What is a financial risk? A risk connected to the value of the product from a monetary point of view, so the price. So basically, the higher the price, the higher the perception of the risk. Why? Because if the product is dissatisfactory, so the consumer is not satisfied of the product, he or she perceives he or she has lost the money. So this is the financial risk. Then there are other kinds of risk. For example, the psychological risk. What is a psychological risk? A risk which is basically linked to the self-image, the self-gratification, the self-perception that a consumer has. So let's imagine I consider myself a real experts of wines. What happens when I'm in a real expert of wines? That I intend to buy wines that confirmed the image I have. But if I buy a wine and the wine is not good at all, a wine which is completely dissatisfactory, this can have a negative effect on myself image. So I can feel that I'm not so expert as I thought to be. And then there are social risks. What are social risks? The risk connected to the image I have in my social networks. The esteem I want to get from my peers. The status I have with my peers. So for an example, again, we keep on saying, is wine. 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 undermined, it is negatively affected by the wine. So it is a social risk. So basically the higher the risk that consumers perceive, the more complex the process. That is to say, a combination of emotional and cognitive efforts will be given more into the process. And then there are other characteristics for example, the consumer expertise. We said that consumers in food and beverage industries are experts and some are not experts, so most of consumers are not experts at all. Maybe they are very familiar with the products, but not an expert. So what our customer perceives him or herself as an expert or not. When it is, he or she is an expert, you basically consider himself or herself as a reliable source of information. That is to say, a consumer which, who considers himself or herself as an expert tend to rely mostly on his or her past experiences when he or she has to evaluate a product. A consumer who perceives himself or herself as not expert obviously needs more information to collect, and so it increases the complexity of the choice, and so may be the cognitive effort put to the process itself. Then there are other characteristics that can be considered. For example, the availability of the product. If a product is very available, the consumer can find, easily, information about the product. If the product is exclusive, it's more difficult to find the 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 into the market. Again, for a product like this, consumers will find more difficult to make the choice because the availability of the product is relatively limited. So these are the different features that affect the complexity of the consumer choice processes. The more these features are present into the choice, the more the choice will be complex. And so, one way that consumers have to reduce its complexity, is to increase the cognitive and emotional efforts to put into the process.
