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8/9/2019 Buyer Behaviour o
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Demands of marketing
Marketers need to understand
What INDIVIDUALS OR GROUPS buy
Who buys as an individual or in the group When the individual or group buys
Where they buy
Why they buy
How they buy
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StimulusYou should have
ResponseUse/Dont use
Individual Behaviour
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Stimulus Response
PsychologicalExplanations
Physical
Explanations
Contextual
Explanations
Individual Behaviour
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Individual behavior: explanations Psychological explanations
Motivation
Perception
Affect-feelings
Beliefs-information
Decision making-cognition
Composite: values/ attitudes/ identity
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Physical explanations
Sensory capabilities
Skills Physical Attributes
Contextual explanations
Physical-Resources
Social-networks/ Contacts-Family/ Work/
Advisors
PEST
Individual behavior: explanations
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People respond differently
Dealing with diversity in marketing
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Classifying generic behavior Personality (Activities)
Lifestyle (AI)
Psychographics (AIO)
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Classifying and describing
specific behaviors Interaction behaviors
Shopping behaviors
Purchase behaviors
Complex buying behavior
Dissonance-reducing buying behavior
Habitual buying behavior
Variety-seeking buying behavior
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Classifying and describing
specific behaviors
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Group behaviors Roles-Authority and responsibility
Processes-inputs and outputs
Specific group purchase behaviors Families
Businesses
Critical issues in group purchasing
Role fragmentation Types of roles
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Roles in Group Buying
Decider
Buyer
User
Influencer
Initiator
Purchase
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Participants in the Buying
Process
Buying Centre
Users
Gatekeepers
Deciders Influencers
Buyers
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Participants in the Buying
Process1. Users are members of the GROUP who will use
the product or service
2. Influencers affect the buying decision. They oftenhelp to define specifications and also provideinformation for evaluating alternatives
3. Buyers have formal authority to select the supplierand arrange terms of purchase
4. Deciders have formal or informal power to selector approve the final suppliers
5. Gatekeepers control the flow of information toothers
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Changes in groups:
Changes in behaviour
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Business Buyers Business-to-business buyers are characterised by
complex product requirements and complex group
structures.
Although, strictly speaking, institutional andgovernment buyers are non-business, much of the
discussion on business-to-business buying also
applies in marketing and selling to government and
institutional buyers.
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Business Buyer Behaviour Marketers want to know how business buyers will respond
to various marketing stimuli. Marketing and other stimuliaffect the buying organisation and produce certain buyerresponses.
As with consumer buying, the marketing stimuli forbusiness buying consist of the marketing mix elements(FourPs) or
extended marketing mix elements in the case of service
organisations: product, price, place, promotion, peopleand processes and physical evidence.
Other stimuli include major forces in the environment:
economic, technological, political, cultural andcompetitive.
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Characteristics of
Business PurchasingNature of buying unit
1. Professional purchasing
2. Several buying influences
Types of decisions and decision processes
1. More complex and formalised decisions
2. Direct purchasing3. Reciprocity
4. Leasing
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Business and Consumer Buying
Situations
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A Model of Business Buying
Behaviour
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Major Influences on Business
Buying
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Three Types of Buying
Situations
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Major Types of Business
Buying Situations
Where a straight rebuy occurs, the buyer re-orders
items without any modifications. It is usually handled on a
routine basis by procurement officers.
In a modified rebuy, the buyer wants to modify productspecifications, prices, terms or suppliers. The modified
rebuy usually involves more decision participants than
the straight rebuy.
Anew task situation is an industrial buying situation in
which the buyer purchases a product or service for the
first time.
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Classification of business
buyers Business markets are characterised by a wide
diversity in customer types and products.
ISIC Industries are classified according to the International
Standard Industrial Classification (ISIC).
Many countries have their own classification scheme e.g.Australian and New Zealand Standard IndustrialClassification (ANZSIC).
Function in value added network Manufacturer/ Wholesaler/ Retailer
Type of value propositions delivered Service/ FMCG
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Characteristics of Business
MarketsMarket Structure and Demand
1. Fewer buyers
2.Larger Buyers
3. Close supplier-customer relationships
4. Geographically concentrated buyers
5. Derived demand
6. Inelastic demand7. Fluctuating demand
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Institutional and Government
Markets
InstitutionalMarkets: consists of schools, TAFE
colleges, polytechnics, universities, hospitals,
nursing homes, prisons and other institutions that
provide goods and services to people in their care.
Government Markets: in every country, the
government market comprises a significant portion of
business activity.
Government BuyerDecision Process:
Government practices are often bureaucratic withregulations, low bid prices, delays and policy
changes. Yet, the government is often helpful in
providing information on buying needs and
procedures.