Hierarchy Of Effects Model

The hierarchy of effects model refers to a marketing theory describing stages a consumer undergoes while making purchase decisions sequentially. It has six stages: awareness, knowledge, liking, preference, conviction, and purchase. It serves to aid marketers in comprehending and influencing consumer behavior in sales driving.

Efficient marketing campaigns can only be created using a hierarchy of effects. Marketers utilize it to target and conveniently spread their messages to the target audience. The framework provides the best marketing tool for high-involvement goods like computers and cars. Every consumer may or may not undergo these stages depending on the nature and quality of goods or services.

• The hierarchy of effects describes the sequence in which marketing techniques affect a customer.
• The hierarchy of effects helps marketers understand and impact customer behavior by detailing consumers' steps while making purchases.
• The six stages of the hierarchy involve marketing awareness, knowledge, liking, preference, conviction, and purchase.
• Critics argue that the hierarchy theory oversimplifies customer decision-making, overlooks critical aspects, and overlooks non-linear decision-making.
• In contrast to McGuire’s hierarchy of effects, the AIDA model follows the sequence of Attention, Interest, Desire, and Action in its hierarchy of effects.

The Hierarchy of Effects model is a theoretical framework explaining the stepwise stages that consumers traverse while making buying decisions.

• How It Works: Proposed by W.J McGuire in 1969, it follows the route starting from awareness creation of a product, pursued by obtaining its information, admiration, selecting, commitment, and finally resulting in product buying. Furthermore, every stage uses the previous one to build on. In addition, the model assumes the serial-wise movement of consumers in a systematic manner.
• Usability: It helps marketers create effective advertising strategies. Ad campaigners and businesses put the model into use for designing targeted campaigns for each stage accordingly. In addition, the customer engagement and conversion rate increase for them.
• Purpose: It serves as a structured and practical guideline for marketers to motivate consumers to buy their products. It happens diet to each stage of targeted ad promotions for the targeted audience.
• Applications & Effect On the Financial World:  Ad agencies and corporates use advertising and marketing strategies deduced from the hierarchy effects. Financial institutions use it to understand the buying mentality and behavior of customers. As a result, they customers their products and campaign to influence possible customers. Hence, these companies address every stage strategically to guide and take customers toward making informed decisions to buy their financial products easily.
• Implications: It highlights the significance of creating consumer trust plus their commitment to take the step from awareness to buying. Therefore, all marketing campaigns must consider customer profiling in focus in all marketing and promotion active per stages.

Hence, it aids marketers in developing campaigns that convert additional consumers and boost customer satisfaction.

The model of hierarchy effects offers a road map to a customer's purchasing decision. Below are its six stages:

• Awareness: First, businesses use marketing channels such as social media, advertisements, and word-of-mouth. As a result, brand or product awareness among consumers is carried out.
• Knowledge: Then, the manufacturer provides the answers to the query raised by consumers on its alternatives, benefits, and features.
• Liking: The two previous steps develop a consumer’s favorable opinion and attitude towards the product. Consumers start appreciating product quality, features, and price per the branding efforts.
• Preference: By now, the prospective consumer has developed a certain liking for the product compared to other choices.
• Conviction: After that, the consumers feel certain and quite convinced of the reliability, superiority, and affordable pricing of the marketed product.
• Purchase: Finally, the consumer decides to purchase the product.

Nevertheless, the above stages do not necessarily follow a linear path. However, the progression of these stages varies per time, effort, product quality, and other factors like consumer involvement.

Let us go through a couple of examples to understand the topic.

Example # 1

Let us consider a fictitious example of a new energy drink "EnergiMax." The first step of the marketing plan is raising awareness through social media commercials, influencer endorsements, and a memorable jingle. After that, in the knowledge-based phase, consumers are informed about the drink's all-natural components and long-lasting energy advantages.

It is done through website content and sponsored pieces. By sharing user reviews and setting up sample events, the campaign seeks to create like and preferences. Finally, it encourages shoppers to buy by offering momentary discounts and promotions.

Example #2

Apple's iPhone advertising campaign is a real-world example of the Hierarchy of Effects hypothesis. It started by creating awareness through attention-grabbing billboards and ads. Furthermore, it went into detail on how to spread knowledge by highlighting the advantages and features of the iPhone.

The next phases emphasized the brand's design, user experience, and unique functions to promote a brand like and preference. Hence, the campaign's ultimate objective was influencing customers to choose the iPhone as their preferred smartphone.

The hierarchy effects model is a framework that outlines the steps that a customer takes in the decision-making process, from awareness to purchase. However, it has been criticized for the following points:

• Oversimplification: It oversimplifies the decision-making procedure by customers
• Overlooking: It bypasses critical aspects of customer behavior.
• Non-linear decision-making: The decision-making by customers may not necessarily be linear. It happens because personal preference, mood, societal norms, current trends, and peer pressure may affect their buying decisions.
• Limited scope: The six strategies are not always applicable in every product or situation to gain access into consumers’ minds.
• Online behavior kept out: Today's customers make their buying decisions on online reviews of products. Such an important factor remains left out of the theory of hierarchy.
• Impulsive behavior: It excludes the impulsive buying behavior of consumers.
• Dynamic environment: Dynamic marketing factors, like influencer and affiliate marketing, do not figure into it.

Let us use the table below to know the differences between the two:

This has been a guide to the Hierarchy Of Effects and its Meaning. Here, we explain its examples, comparison with AIDA, stages, and criticism. You can learn more about it from the following articles –

• McKinsey 7S Model
• Peter Principle
• Hull-White Model