consumer & business buyer behaviour final
TRANSCRIPT
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5-1
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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
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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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
Factors Affecting Consumer Behavior:
Social
Factors Affecting Consumer Behavior:
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
Factors Affecting Consumer Behavior:
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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Factors Affecting Consumer Behavior:
Psychological
Factors Affecting Consumer Behavior:
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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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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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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The Buyer Decision ProcessStep 3. Evaluation of Alternatives
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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The Buyer Decision ProcessStep 3. Evaluation of Alternatives
The Buyer Decision ProcessStep 3. Evaluation of Alternatives
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
Influence of Product Characteristics
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5 21Influence of Product Characteristics
on Rate of Adoption
Influence of Product Characteristics
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
Marketing andOther Stimuli
Marketing andOther Stimuli
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
Participants in the Business Buying
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Participants in the Business Buying
Process: The Buying Center
Participants in the Business Buying
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
Major Influences on Business
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Major Influences on Business
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
Stages of the Business
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Stages of the Business
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
Institutional and Government Markets
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Institutional and Government Markets
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.