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Principles of Marketing
Chapter 5:Understanding
Consumer & BusinessBuying Behavior
Consumer Buying Behavior
• Consumer buying behavior:Refers to the buying behavior of individuals and
households who buy goods and services for personal use.
• These people make up the consumer market.
• The central question for marketers is:“How do consumers respond to various marketing
efforts the company might use?”
Dr. James Carver – Auburn University
Model of Consumer Behavior
• Marketing mix factors and other external stimuli are inputs into the “buyer’s black box.” Stimuli are evaluated in light of the buyer decision
process and the buyer’s characteristics.
Buyer responses include:• Formation of attitudes and preferences• Purchase(s), and • Development of a relationship with the brand or firm.
Dr. James Carver – Auburn University
Consumer Buying Behavior
• Factors influencing consumer behavior:Cultural factors:
• Culture, subculture, social class
Social factors:• Reference groups, family, roles, and status
Personal factors:• Age/life-cycle stage, occupation, economic situation,
lifestyle, personality, and self-concept
Psychological factors:• Motivation, perception, learning, beliefs, and attitudes
Dr. James Carver – Auburn University
Culture
• Culture is the most basic cause of a person’s wants and behavior.Culture:
• Is learned from family, church, school, peers, colleagues.• Reflects basic values, perceptions, wants, and behaviors.
Cultural shifts create opportunities for new products or may otherwise influence consumer behavior.
Dr. James Carver – Auburn University
Subculture
• Subculture:Groups of people with shared value systems based
on common life experiences.
Examples of major subculture groups:• Hispanic consumers• Asian-American consumers• Mature consumers
Dr. James Carver – Auburn University
Social Class
• Social class:Relatively permanent & ordered divisions who share
similar values, interests, & behaviorsMeasured by a combination of occupation, income,
education, wealth, and other variables.Class categories include:
• Upper class,• Middle class,• Working class, and• Lower class.
Dr. James Carver – Auburn University
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.
• Online social networks allow marketers to interact with consumers.
Dr. James Carver – Auburn University
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.
Dr. James Carver – Auburn University
Personal Factors
• Age and life-cycle stage:• People change the goods they buy over their lifetimes.
• Occupation:• Occupation influences the purchase of clothing and
other goods.
• Economic situation:• Some goods and services are especially income-
sensitive.• Economic situation often influences choice of store as
well.
Dr. James Carver – Auburn University
Personal Factors
• Yet,People within the same subculture, social class,
and occupation may have different lifestyles.
• Lifestyle:Pattern of living as expressed in his or her
activities, interests, opinions.People buy the lifestyles represented by products
or services.
Dr. James Carver – Auburn University
Personal Factors
• Personality: Refers to the unique psychological characteristics
that distinguish a person or group.Generally defined in terms of traits.
Self-Concept theory:• Suggests that people’s possessions contribute to and
reflect their identities
Brands also have personalities, thus requiring a perceived “match” to be present
Dr. James Carver – Auburn University
Psychological Factors
• Perception:Process by which people select, organize, and
interpret information to form a meaningful picture of the world.
Perception can be influenced by:• Selective attention
Screening out most of what one’s exposed to
• Selective distortion Interpret information so as to “support” what one believes true
• Selective retention Remember good points of “liked” brands but not of “unliked”
Dr. James Carver – Auburn University
Psychological Factors
• Learning:Defined as 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.
Dr. James Carver – Auburn University
Beliefs and Attitudes
• Belief: A descriptive thought that a person holds about
something.
• Attitude:A person’s consistently favorable or unfavorable
evaluations, feelings, and tendencies toward an object or idea.
Dr. James Carver – Auburn University
Buying Decision Process
1. Need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase behavior
Dr. James Carver – Auburn University
Need Recognition and Information Search
• Need recognition can be triggered by internal or external stimuli.Several sources of information may be used during
information search:• Personal sources
• Friends and family
• Commercial sources• Advertising, salespeople, etc.
• Public sources• Mass media, consumer ratings, etc.
• Experiential sources• Handling, examining, or using the product
Dr. James Carver – Auburn University
Evaluation of Alternatives and Purchase Decision
• Evaluation is highly idiosyncraticDependent upon the specific buying situation and the
individual consumer.
• Purchase decisionTwo factors may interfere with realization of purchase
intentions:1. Attitudes of others
• Particularly those deemed “important”
2. Unexpected situational factors• In the economy, in one’s life (job loss), or even due to others’ experiences with
the product unknown prior
Dr. James Carver – Auburn University
Post Purchase Behavior
• Consumer satisfactionFunction of consumer expectations and perceived
product performance.• Performance < Expectations ----- Disappointment• Performance = Expectations ----- Satisfaction• Performance > Expectations ----- Delight
Cognitive dissonance:• A buyer’s doubts shortly after a purchase about whether it
was the right decision due to inherent compromise in all buying decisions
Dr. James Carver – Auburn University
Stages in the Adoption Process
Awareness• One becomes aware of existence but lacks info about
Interest• Consumer seeks information about new product.
Evaluation• Considering whether trying product makes sense
Trial• Small scale trial to improve one’s estimate of value
Adoption• Decision to make full and regular use of product
Dr. James Carver – Auburn University
Adopter Categorization
• Speed to try a product is highly idiosyncraticLeads to five general “adopter” categories:
• Innovators• Venturesome & don’t mind risk
• Early adopters• Guided by respect; they’re opinion leaders who try early but “carefully”
• Early majority• Deliberate; rarely leaders but adopt before average person
• Late majority• Skeptical; adopt only after a majority have tried
• Laggards• Tradition-bound; suspicious of change & adopt once somewhat a tradition itself
Dr. James Carver – Auburn University
Product Characteristics that Influence the Rate of Adoption
Relative advantage: Is the innovation superior to existing products?
Compatibility: Does the innovation fit or “work with” the existing products, uses,
values, or experience of the target market?
Complexity: Is the innovation difficult to understand or use?
Divisibility: Can the innovation be tried on a limited basis?
• (i.e., degree of commitment and applicability affects rate)
Communicability: Can results be easily observed or described to others?
Dr. James Carver – Auburn University
Business Marketsand Business Buyer Behavior
• Business buyer behavior:The buying behavior of the organizations that buy
goods and services for use in the production of other products and services or for resell or rent to others for a profit.
The business market is significantly larger than the consumer market in terms of both dollars and items sold.
Dr. James Carver – Auburn University
Characteristics of theBusiness to Business (b2b) Market
• Market structure and demand:
Far fewer buyers than b2c
Yet a larger in purchase size
Business demand is derived from consumer demand.
• Thus they have more fluctuating demand due to anticipating consumers then having to react
Inefficiency due to “peaks and valleys”
Dr. James Carver – Auburn University
Nature of Business Buying Versus Consumer Buying
• Nature of the buying participants & process:Participants:
• Routinely involve more individuals• Much more lengthy and sophisticated that b2c
Process:• Business buyers usually face more complex buying
decisions• Thus, the business buying process tends to be more
formalized• Buyers and sellers are much more dependent on each other
in business markets due to number & timing
Dr. James Carver – Auburn University
Types of Buying Situations
• Straight rebuy:• Buyer routinely reorders something without any
modifications.
• Modified rebuy:• Buyer wants to modify product specifications, prices,
terms, or suppliers.
• New task:• Buyer purchases a product or service for the first time.
• Systems (solution) selling is becoming more common.
Dr. James Carver – Auburn University
Participants in theBusiness Buying Process
• The “Buying Center”All the actors that participate in the business (or
industrial) buying-decision process, and who are responsible for the consequences that result*
• Actors can, each, be an individual or unit of firm
Not a fixed or formally identified unit, but unique to each decision
In the consumer market, this decision-unit is often referred to as the “family buying unit”*
• Due to similar roles performed as in industrial buying
Dr. James Carver – Auburn University
Six Roles of the “Buying Center”*
• Six roles must be performed1. Users
Member(s) of the unit that will use the product or service• Often initiate process & help define specifications
2. Influencers People who simply influence the buying decision
• Help define “specs” & provide info for evaluating alternatives• Technical individuals
3. Deciders People with ultimate power to decide on the product’s
requirements and/or on the suppliers that can be used
Dr. James Carver – Auburn University
Six Roles of the “Buying Center”*
• Six roles must be performed (cont.)4. Buyers
People with the formal authority for selecting the supplier and arranging the terms of the purchase• Can have overlap with decider if only one supplier allowed ~ thus becoming
only the negotiator unless both performed by one individual
5. Approvers People who must authorize the proposed actions of the deciders
and/or buyers
6. Gatekeepers People with power to prevent sellers & information from reaching
members of the buying center.• Most common gatekeeper is the secretary or receptionist
Dr. James Carver – Auburn University
The Business Buying Process
• Steps or stages (similar to consumers):1. Problem recognition
2. General need description
3. Product specification
4. Supplier search
5. Proposal solicitation
6. Supplier selection
7. Order-routine specification
8. Performance review
Dr. James Carver – Auburn University