Understanding Consumer and Business Buyer Behavior Chapter 5

Understanding Consumer and BusinessBuyer Behavior

Chapter 5

Rest Stop: Previewing the Concepts

• Understand the consumer market and the major factors that influence consumer buyer behavior

• Identify and discuss the stages in the buyer decision process

• Describe the adoption and diffusion process for new products

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Rest Stop: Previewing the Concepts

• Define the business market and identify the major factors that influence business buyer behavior

• List and define the steps in the business buying decision process

First Stop: Apple: The Keeper of All Things Cool

• Apple customers are intensely loyal• Apple’s products work better and are simpler

to use because Apple has deep understanding of consumer behavior

• Apple’s obsession with understanding customers and deepening their Apple experience shows in everything the company does

• It gives a life-feels-good experience to its consumers

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Figure 5.1 - Model of Buyer Behavior

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Figure 5.2 - Factors Influencing Consumer Behavior

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Culture

• Culture is the most basic cause of a person’s wants and behavior• Culture is learned from the society, family, and

other institutions• Culture reflects basic values, perceptions, wants,

and behaviors• Cultural shifts create opportunities for new

products or may otherwise influence consumer behavior

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Subculture

• Major subculture groups in the U.S.• Hispanic consumers• African-American consumers• Asian-American consumers• Mature consumers

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Figure 5.3 - The Major American Social Classes

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Social Factors

• Groups and social networks• Membership, reference, and aspirational groups

• Marketers attempt to reach opinion leaders within groups important to target market

• Opinion leaders are recruited as brand ambassadors or for buzz marketing

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Opinion Leaders at JetBlue

JetBlue CrewBlue program

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Social Factors

• Groups and social networks:• Online social

networks allow marketers to interact with consumers

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Mountain Dew’s DEWmocracycampaign

Marketing at Work

• BlendTec developed a cult following after releasing several “Will it Blend” videos on YouTube

• Resulted in a stunning five-fold increase in sales

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BlendTec puts iPhones, Silly Putty, Golf Balls, Marbles and more to the test

Social Factors

• Family• Strongly influences buying behavior• Gender stereotypes for certain types of

purchases are relaxing in the U.S.• Children are very influential, and have

substantial disposable income of their own

• Roles and status• Role = Expected activities• Status = Esteem given to role by society

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Personal Factors

• People within the same subculture, social class, and occupation may have different lifestyles

• People buy the lifestyles represented by products or services

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Personal Factors

• PersonicX 21 life-stage groupings lets marketers see customers as they really are and target them precisely

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Marketing at Work

• Triumph doesn’t just sell motorcycles; it sells an independent, “Go your own way” lifestyle

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Personal Factors

• Personality• Refers to the unique psychological characteristics

that distinguish a person or group• Generally defined in terms of traits• Can be useful in analyzing consumer behavior for

certain product or brand choices• Brands may also have personalities

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Figure 5.4 - Maslow’s Hierarchy of Needs

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Psychological Factors

• Learning• Changes in an individual’s behavior arising from

experience• Occurs due to an interplay of drives, stimuli,

cues, responses, and reinforcement• Strongly impacted by the consequences of an

individual’s behavior• Behaviors with satisfying results tend to be

repeated

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Beliefs and Attitudes

Beliefs and attitudes: By matching today’s attitudes about life and healthful living, the SoBe brand has become a leader in the New Age beverage category

Figure 5.5 - Buyer Decision Process

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Need Recognition and Information Search

• Need recognition can be triggered by internal or external stimuli• Advertising can

be very helpful in stimulating need recognition

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Need Recognition and Information Search

• Several sources of information may be used as part of the information search• Personal sources• Commercial sources• Public sources• Experiential sources

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Evaluation of Alternatives and Purchase Decision

• Evaluation process is dependent upon the specific buying situation and the individual consumers

• Purchase decision - Two factors may interfere with realization of purchase intentions:• Attitudes of others• Unexpected situational factors

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Post-Purchase Behavior

• Consumer satisfaction is a function of consumer expectations and perceived product performance• Performance < Expectations --- Disappointment• Performance = Expectations --- Satisfaction• Performance > Expectations --- Delight

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Stages in the Adoption Process

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Figure 5.6 - Adopter Categorization

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Product Characteristics That Influence the Rate of Adoption

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Business Markets

• Involve far more dollars and items than do consumer markets

• Market structure and demand differs from consumer markets:• Contains far fewer but larger buyers• Business demand is derived from consumer

demand• Business markets have more fluctuating demand

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Business Markets

• Nature of the buying unit:• Business purchases involve more decision

participants• Business buying involves a more professional

purchasing effort

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Business Markets

• Key differences exist between business and consumer buying situations:• Business buyers usually face more complex

buying decisions• The business buying process tends to be more

formalized• Buyers and sellers are much more dependent on

each other in business markets

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Figure 5.7 - A Model of Business Buyer Behavior

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Types of Buying Situations

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Participants in the Business Buying Process

• Buying center: All the individuals and units that participate in the business buying-decision process• The buying center is not a fixed or formally

identified unit• It is a set of buying roles assumed by different

people for different purchases

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Figure 5.8 - Major Influences on Business Buyer Behavior

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Figure 5.9 - Stages of the Business Buying Process

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E-procurement

• Online purchasing (e-procurement) can be implemented in many ways:• Reverse auctions• Trading exchanges• Company buying sties• Extranet links with key suppliers

• E-procurement presents several benefits and problems

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Marketing at Work

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• The Shaw Floors site builds strong links with Shaw’s retailers

• It provides marketing ideas and tools that make retailers more effective in selling Shaw’s products to final customers

Rest Stop: Reviewing the Concepts

• Understand the consumer market and the major factors that influence consumer buyer behavior

• Identify and discuss the stages in the buyer decision process

• Describe the adoption and diffusion process for new products

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Rest Stop: Reviewing the Concepts

• Define the business market and identify the major factors that influence business buyer behavior

• List and define the steps in the business buying decision process

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