Consumer & Business Buyer Behaviour Final

8/9/2019 Consumer & Business Buyer Behaviour Final

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Consumer and Business

Buyer Behavior


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Consumer Buying Behavior

Consumer Buying Behavior

Consumer Buying BehaviorConsumer Buying Behaviorrefers to thebuying behavior of final consumers-individuals & households who buy goodsand services for personal consumption.

The central question for marketers is:

How do consumers respond to variousHow do consumers respond to variousmarketing efforts the company might use?marketing efforts the company might use?


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Model of Buyer Behavior

Model of Buyer Behavior

Marketing andOther Stimuli


Buyers Black Box

Buyers Black Box

Buyers Response

Buyers Response

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Buyer

Characteristics

Buying

DecisionProcess

Product Choice

Brand Choice

Dealer Choice

PurchaseTiming

PurchaseAmount


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5-4

Factors Influencing

Consumer Behavior

Factors Influencing

Consumer Behavior

Culture

Sub-culture

Socialclass

Social

Referencegroups

Family

Rolesandstatus

Personal

Age andlife-cycle

Occupation

Economicsituation

Lifestyle

Personalityandself-concept

Psycho-logical

Motivation

Perception

Learning

Beliefs and

attitudes

Buyer

Cultural


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5-55-5Factors Affecting Consumer Behavior:

Culture

Factors Affecting Consumer Behavior:

Culture

Social ClassPeople within a social class

tend to exhibit similar buying

behavior.

Occupation Income Education Wealth

Social ClassPeople within a social class

tend to exhibit similar buying

behavior.

Occupation Income Education Wealth

Culture Most basic cause of a person's wants and behavior.

Values, Perceptions, Wants & Behavior

Culture

Most basic cause of a person's wants and behavior.

Values, Perceptions, Wants & Behavior

Subculture

Groups of people with sharedvalue systems based oncommon life experiences.

Hispanic Consumers African American Consumers

Asian American Consumers

Mature Consumers

Subculture

Groups of people with sharedvalue systems based oncommon life experiences.

Hispanic Consumers African American Consumers

Asian American Consumers

Mature Consumers


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Groups

Membership

Reference

Groups

Membership

Reference


Social


Social

Family

Husband, wife, kids

Influencer, buyer, user

Family Husband, wife, kids

Influencer, buyer, user

Roles and StatusRoles and Status

Social FactorsSocial Factors


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5-75-7Factors Affecting Consumer Behavior:

Personal


Personal

Personal InfluencesPersonal Influences

Age and Life CycleStage

Age and Life CycleStage Occupation

Occupation

Economic SituationEconomic Situation

Lifestyle IdentificationLifestyle Identification

ActivitiesActivities OpinionsOpinions

InterestsInterests

Personality & Self-ConceptPersonality & Self-Concept


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5-85-8VALS 2VALS 2

Principle OrientedPrinciple Oriented

Status OrientedStatus Oriented

Action OrientedAction Oriented

AchieversAchievers

ActualizersActualizers

StrugglersStrugglers

StriversStrivers

FulfillersFulfillers

BelieversBelievers

ExperiencersExperiencers

MakersMakers

Abundant ResourcesAbundant Resources

Minimal ResourcesMinimal Resources


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Psychological


Psychological

PsychologicalFactors

MotivationMotivation

PerceptionPerception

LearningLearning

Beliefs andAttitudes

Beliefs andAttitudes

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M l Hi h f N d


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5-105-10Maslows Hierarchy of NeedsMaslows Hierarchy of Needs

Esteem Needs(self-esteem, status)

Social Needs

(sense of belonging, love)

Safety Needs(security, protection)

Physiological Needs

(hunger, thirst)

Self

Actualization(Self-development)

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f


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Types of Buying DecisionsTypes of Buying Decisions

Complex

BuyingBehavior

Dissonance-

Reducing Buying

Behavior

Variety-

SeekingBehavior

Habitual

Buying

Behavior

HighInvolvement

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

LowInvolvement

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Th B D i i P


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Need RecognitionNeed Recognition

Information SearchInformation Search

Evaluation of AlternativesEvaluation of Alternatives

Purchase DecisionPurchase Decision

Post-purchase BehaviorPost-purchase Behavior

The Buyer Decision ProcessThe Buyer Decision Process

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Th B D i i P


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5-135-13

The Buyer Decision ProcessStep 1. Need Recognition

The Buyer Decision ProcessStep 1. Need Recognition

External Stimuli

TV advertising Magazine ad Radio sloganStimuli in the environment

External Stimuli

TV advertising Magazine ad Radio sloganStimuli in the environment

Internal Stimuli

Hunger Thirst A persons normal needs

Internal Stimuli

Hunger Thirst A persons normal needs

Need RecognitionBuyer Recognizes a Problem or Need

Need RecognitionBuyer Recognizes a Problem or Need

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Th B D i i P


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5-145-14The Buyer Decision ProcessStep 2. Information Search

The Buyer Decision ProcessStep 2. Information Search

Family, friends, neighborsMost effective source of information

Advertising, salespeopleReceives most information from these sources

Mass MediaConsumer-rating groups

Handling the productExamining the product

Using the product

Personal SourcesPersonal Sources

Commercial SourcesCommercial Sources

Public SourcesPublic Sources

Experiential SourcesExperiential Sources

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Th B D i i P


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The Buyer Decision ProcessStep 3. Evaluation of Alternatives


Product AttributesEvaluation of Quality, Price, & FeaturesProduct AttributesEvaluation of Quality, Price, & Features

Degree of ImportanceWhich attributes matter most to me?

Degree of ImportanceWhich attributes matter most to me?

Brand BeliefsWhat do I believe about each available brand?

Brand BeliefsWhat do I believe about each available brand?

Total Product SatisfactionBased on what Im looking for, how satisfied

would I be with each product?

Total Product SatisfactionBased on what Im looking for, how satisfied

would I be with each product?

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

Evaluation ProceduresChoosing a product (and brand) based on one

or more attributes.

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Th B D i i P


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Consumer May Use CarefulCalculations & Logical Thinking

Consumer May Use Careful

Calculations & Logical Thinking

Consumers May Buy on Impulse andRely on Intuition

Consumers May Buy on Impulse andRely on Intuition

Consumers May Make Buying Decisionson Their Own.

Consumers May Make Buying Decisionson Their Own.

Consumers May Make Buying DecisionsOnly After Consulting Others.

Consumers May Make Buying DecisionsOnly After Consulting Others.

Marketers Must Study Buyers to Find Out HowThey Evaluate Brand Alternatives

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Th B D i i P

The Buyer Decision Process


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5-175 17The Buyer Decision ProcessStep 4. Purchase Decision

The Buyer Decision ProcessStep 4. Purchase Decision

Purchase IntentionDesire to buy the most preferred brand

Purchase IntentionDesire to buy the most preferred brand

Purchase DecisionPurchase Decision

Attitudes of

Others

Unexpected

SituationalFactors

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Th B D i i P

The Buyer Decision Process


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The Buyer Decision ProcessStep 5. Post-purchase Behavior

The Buyer Decision ProcessStep 5. Post-purchase Behavior

Consumers Expectations ofProducts Performance

Consumers Expectations ofProducts Performance

Dissatisfied CustomerDissatisfied CustomerSatisfied Customer!Satisfied Customer!

Products Perceived PerformanceProducts Perceived Performance

Cognitive DissonanceCognitive Dissonance

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St i th Ad ti P

Stages in the Adoption Process


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5-19Stages in the Adoption ProcessStages in the Adoption Process

AwarenessAwareness

InterestInterest

EvaluationEvaluation

TrialTrial

AdoptionAdoption

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Ad t C t i

Adopter Categories


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Adopter CategoriesAdopter Categories

Percen

t ageof

Adopters

Time of Adoption

Early Late

Innova

t ors

EarlyAdopters

Early Majority

2.5%

13.5%

34% 34%

16%

Laggards

Late Majority

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Influence of Product Characteristics



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5 21Influence of Product Characteristics

on Rate of Adoption


on Rate of Adoption

DivisibilityCan the innovation

be used on atrial basis?

CompatibilityDoes the

innovationfit the values andexperience of the

target market?

ComplexityIs the innovation

difficult tounderstand or use?

Relative AdvantageIs the innovation superior

to existing products?

CommunicabilityCan results be easily

observed or describedto others?

ProductCharacteristics

ProductCharacteristics

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What is a Business Market?

What is a Business Market?


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5 22What is a Business Market?What is a Business Market?

Business Buyer BehaviorBusiness Buyer Behaviorrefers to the buyingbehavior of all the organizations that buygoods and services for use in the productionof other products and services that are sold,rented, or supplied to others.

The business market is huge and involvesmany more dollars and items do consumer

markets.

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Characteristics of Business Markets

Characteristics of Business Markets


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Types of Decisions & theDecision Process

Types of Decisions & theDecision Process

Market Structure and DemandMarket Structure and Demand

Fewer, larger buyers Geographically concentrated Demand derived from consumers Fluctuating demand

Fewer, larger buyers

Geographically concentrated Demand derived from consumers Fluctuating demand

Nature of the Buying UnitNature of the Buying Unit

More buyers More professional purchasing effort

More buyers More professional purchasing effort

More complex decisions

Process is more formalized Buyer and seller are more

dependent on each other Build close long-term relationships with customers

More complex decisions

Process is more formalized Buyer and seller are more

dependent on each other Build close long-term relationships with customers

Characteristics of Business MarketsCharacteristics of Business Markets

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Model of Business Buyer Behavior

Model of Business Buyer Behavior


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The Buying OrganizationThe Buying Organization

Model of Business Buyer BehaviorModel of Business Buyer Behavior



Buyers ResponseBuyers Response

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Interpersonal

and IndividualInfluences

Organizational

Influences

Product or ServiceChoice

Supplier Choice

Order Quantities

Delivery Termsand Times

Service Terms

Payment

The Buying Center

Buying DecisionProcess


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New task situatie

Completely new product from unknown suppliers High uncertainty regarding outcome (e.g. acquisition of capital goods)

Modified Rebuy

New product from known supplier Existing product, new supplier Moderate uncertainty regarding outcome

Straight rebuy Known product from known supplier Low uncertainty regarding outcome (e.g. consumable items like MRO)

Three types of purchasing situations:

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Examples of purchasing situationsExamples of purchasing situations

Routine task

Low risk

Gas,w

ater,electricity

Cleaningm

aterials

Bulkchem

icals

Offi

cesupp

lies

Sparep

arts

Electro

nicco

mpone

nts

Compute

rtermin

als

Tele

phon

esyste

m

Productio

nequip

ment

Officefurni

ture

Courierservi

ces

Businessc

ars

Compu

ters

Build

ings

New task

High risk

Straight re-buy Modified re-buy New task

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Participants in the Business Buying



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Process: The Buying Center


Process: The Buying Center

Buying CenterBuying Center

UsersGatekeepers

Buyers Deciders

Influencers

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Models of industrial buying behaviorModels of industrial buying behavior

Within the Decision Making Unitvarious roles can be

distinguished

Users: people who will work with the product

Influencers: people who are able to affect the outcome of the purchasing process bymeans of solicited or unsolicited advice

Buyers: people who will negotiate with the suppliers about terms and conditions and whoplace the order

Decision makers: people who actually determine the selection of the supplier

Gatekeepers: people who control the flow of information from the supplier towards theother members of the Decision making units

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Major Influences on Business



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Buyer Behavior

ajo ue ces o us ess

Buyer Behavior

EnvironmentalEconomic, Technological, Political, Competitive

EnvironmentalEconomic, Technological, Political, Competitive

OrganizationalObjectives, Policies, Procedures,

Structure, & Systems

OrganizationalObjectives, Policies, Procedures,

Structure, & Systems

InterpersonalAuthority, Status, Empathy &

Persuasiveness

InterpersonalAuthority, Status, Empathy &

Persuasiveness

Individual

Age, Education, Job Position, Personality &Risk Attitudes

Individual

Age, Education, Job Position, Personality &Risk Attitudes

BuyersBuyers

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Stages of the Business



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Buying Process

g

Buying Process

Problem RecognitionProblem Recognition

General Need DescriptionGeneral Need Description

Product SpecificationProduct Specification

Supplier SearchSupplier Search

Proposal SolicitationProposal Solicitation

Supplier SelectionSupplier Selection

Order Routine SpecificationOrder Routine Specification

Performance ReviewPerformance Review

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Institutional and Government Markets



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Institutional MarketsInstitutional Markets

Low BudgetsLow Budgets Captive PatronsCaptive Patrons

Government MarketsGovernment Markets

Specialized BuyingSpecialized Buying Public ReviewPublic Review

Negotiated ContractsNegotiated Contracts

Outside PublicsOutside Publics Open BidsOpen Bids

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Rest Stop:

Rest Stop:


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Rest Stop:

Reviewing

the

Concepts

p

Reviewing

the

Concepts Understand the consumer market and the major

factors that influence consumer buyer behavior.

Identify and discuss the stages in the buyer decisionprocess.

Describe the adoption and diffusion process for newproducts.

Define the business market and identify the major

factors that influence business buyer behavior.

List and define the steps in the business buyingdecision process.

Documents

Consumer & Business Buyer Behaviour Final