Download - Dsbm 05- conusmer behavior [autosaved]
![Page 1: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/1.jpg)
05.UNDERSTANDING CONSUMER
THARAKA DIASDirector – Essence BTC
MBA(USA), MBA(Aldersgate),BBA(USA), Dip in Mgt, ACIM(UK),
FAEA(Dip in AEA-UK), FinstSMM(UK), CPM(Asia), MSLIM, PM(Sri-
Lanka)
![Page 2: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/2.jpg)
WHY DO WE NEED TO STUDY CONSUMER BEHAVIOR?
BECAUSE NO LONGER CAN WE TAKE THE CUSTOMER/CONSUMER FOR GRANTED.
![Page 3: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/3.jpg)
![Page 4: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/4.jpg)
FAILURE RATES OF NEW PRODUCTS INTRODUCED
Out of 11000 new products introduced by 77 companies, only 56% are present 5 years later.
Only 8% of new product concepts offered by 112 leading companies reached the market. Out of that 83% failed to meet marketing objectives.
4AOT - WWW.THARAKADIAS.COM
![Page 5: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/5.jpg)
ALL MANAGERS MUST BECOME RESPECT ANALYSTS OF CONSUMER MOTIVATION AND BEHAVIOR
![Page 6: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/6.jpg)
CAN MARKETING BE STANDARDIZED?
NO.
BECAUSE CROSS - CULTURAL STYLES, HABITS, TASTES, PREVENTS SUCH STANDARDIZATION.
![Page 7: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/7.jpg)
UNLESS MANAGEMENTS ACT
THE MORE SUCCESSFUL A FIRM HAS BEEN IN THE PAST, THE MORE LIKELY IS IT TO FAIL IN THE FUTURE.
![Page 8: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/8.jpg)
WHY?
BECAUSE PEOPLE TEND TO REPEAT BEHAVIOUR FOR WHICH THEY HAVE BEEN REWARDED.
![Page 9: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/9.jpg)
LANGUAGE PROBLEMS
“Please leave your values at the desk” - Paris hotel
“Drop your trousers here for best results” - Bangkok laundry
“The manager has personally passed all water served here” - Acapulco restaurant
“Because of the impropriety of entertaining guests of the opposite sex in the bedroom, it is suggested that the lobby be used for the
purpose.” - Zurich hotel
Ladies are requested not to have children in the bar.”- Norway bar
9AOT - WWW.THARAKADIAS.COM
![Page 10: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/10.jpg)
“COME ALIVE WITH PEPSI”
“Come alive out of the grave” - Germany
“Pepsi brings your ancestors back from the grave” - China
10AOT - WWW.THARAKADIAS.COM
![Page 11: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/11.jpg)
11AOT - WWW.THARAKADIAS.COM
![Page 12: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/12.jpg)
BUYER BEHAVIOUR
4Ps Marketing
Environment
Buyer
Characteristics
Buyer
Decision Process
Buyer
Decision
Consumer
12AOT - WWW.THARAKADIAS.COM
![Page 13: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/13.jpg)
MARKETING STIMULI
Product Price Place Promotion
4 Ps
13AOT - WWW.THARAKADIAS.COM
![Page 14: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/14.jpg)
OTHER STIMULI
Economic Technological Political Cultural
Marketing
Environment
14AOT - WWW.THARAKADIAS.COM
![Page 15: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/15.jpg)
Consumer Needs
Consumer Wants
Demand
Hierarchy of Needs
Customer and Consumer
CONSUMER NEEDS, WANTS AND DEMAND
![Page 16: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/16.jpg)
16
THIS IS A NEED
Needs - state of felt deprivation including physical, social, and individual needs (e.g., food)
![Page 17: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/17.jpg)
THIS IS A WANTWants - form
that a human need takes as shaped by culture and individual personality (e.g., pastry)
![Page 18: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/18.jpg)
Experiences Persons
Products
Anything that can be Offered to a Market to Satisfy a Need or Want
Places
Organizations IdeasActivities
WHAT WILL SATISFY CONSUMERS’ NEEDS & WANTS?
Services
Activity or Benefit Offered for Sale That is EssentiallyIntangible and Doesn’t Result in the Ownership of Anything
![Page 19: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/19.jpg)
MASLOW’S HIERARCHY OF NEEDS
![Page 20: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/20.jpg)
CONSUMER BUYING BEHAVIOR
Consumer Market - All the individuals and households who buy or acquire goods and services for personal consumption.
Consumer Buying Behavior
The buying behavior of final consumers – individuals and households who buy goods and service for personal or household consumption. (Philip Kotler)
Buying behavior is the decision process and actions of people involved in buying and using products.
![Page 21: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/21.jpg)
BUYER’S DECISION PROCESS
Problem Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Consumption
Post purchase behavior
21AOT - WWW.THARAKADIAS.COM
![Page 22: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/22.jpg)
ORGANIZATIONAL BUYING BEHAVIOR
22
Consumer vs. Organizational buying behavior
Main types of buying situations in B2B
Stages of decision in B2B
Roles in B2B procurement
Influences on organizational behavior
Buying centres in summary
![Page 23: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/23.jpg)
CONSUMER VS. ORGANIZATIONALBUYING BEHAVIOR
23
Decisions made by consumers are quite simple
Organizational buying processes are more complicated, there are several phases and steps
Different buying behavior for different products andtarget groups
Simple consumer goods like food and beverages arebought very spontaneously – influenced by advertisingand product presentation
For premium consumer goods (expensive clothes, computers) – buying behavior is getting more rational –comparison
Private investment goods – price bargaining
![Page 24: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/24.jpg)
B2B PRODUCTS – ORGANIZATIONALPROCUREMENT STARTS
24
More than one person involved
Buying process follows certain rules
Price comparison, standardisation, tenders = Ausschreibungen)
![Page 25: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/25.jpg)
B2B SYSTEMS
25
involve more capabilities and greater workloads
From the buyer‘s and the supplier‘s side decision hasmore extensive consequences
![Page 26: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/26.jpg)
B2B FACILITIES
26
Industrial plants
Manufacturing installations
Office buildings
![Page 27: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/27.jpg)
MAIN TYPES OF BUYING SITUATIONS IN B2B
27
Straigtht rebuy – routine decision, repetitive process (energy, office supplies, raw materials, wood, cigarettes), componentsuppliers for the automotive industry – little or no newinformation
Modified rebuy – more complicated but less sophisticated: cars, trucks, computers, consulting – modified rebuys are oftentreated too uncautious
New task – calls for thorough research – industrial plant –highest level of uncertainty. Strategic new tasks are of extreme strategic and financial importance (aircrafts, militaryequipment, infrastructure) – re-evaluation of alternatives andsearch for new information and new alternatives
![Page 28: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/28.jpg)
BUYING PHASES
28
Problem recognition
General need description
Product specification
Supplier search
Proposal solicitation
Supplier selection
Order routine specification
Performance review
![Page 29: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/29.jpg)
STAGES OF DECISION IN B2B PROCUREMENT
29
Backhaus developed a widely usable model todistinguish between 5 phases of procurement
Preliminary application (initiation phase)
Tender proposal
Negotiation
Processing of order
Warranty and services
![Page 30: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/30.jpg)
PRELIMINARY APPLICATION
30
Recognition of a problem (need) and a general solution
Released by top management = operating departmentor external consultants
Result request for an offer addressed to a number ofpotential suppliers
![Page 31: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/31.jpg)
TENDER PREPARATION PHASE
31
Determination of characteristics and quantity of needed items
Search for and qualification of potential sources
Supplier has to provide an offer
Tries to be incomparable with his competitors
Customer tries to make the offer best comparable
![Page 32: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/32.jpg)
NEGOTIATION PHASE
32
core selling process
Comprises acquisition and analysis of proposals, evaluation of proposals and selection ofsuppliers
![Page 33: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/33.jpg)
PROCESSING PHASE/WARRANTY/ SERVICE PHASE
33
Contains selection of an order routine
Realisation of the transaction along with the fixation ofafter sales service tasks
![Page 34: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/34.jpg)
ROLES IN B2B PROCUREMENT –BUYING CENTER CONCEPT
34
Group of people involved in the buying process – buyingcenter
Webster/Wind model shows 5 different roles – not institutionalised
This causes probleme in identifying and targeting theright people within the decision process
![Page 35: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/35.jpg)
BUYING CENTER
35
Role keepers have different tasks – not mandatory
Buyer
User
Initiator
Gatekeeper
Influencer
![Page 36: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/36.jpg)
BUYER
36
Formal authority to sign contracts
Member of purchasing department
Influences the vendor selection
Not in technical details
Main criteria: price + terms and conditions of thecontract
![Page 37: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/37.jpg)
USER
37
Person working with the product
Interested in benefits and unobstructed function of theproduct to buy
Large knowhow and preconceived opinion
![Page 38: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/38.jpg)
INFLUENCER
38
A person with high technical knowledge andpractical experience
definition of minimum requirements on technical or company standards
![Page 39: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/39.jpg)
GATEKEEPER
39
Controls the flow of information within thebuying center
Assistant of decision maker
Influence by preparing the decision and therelevant documents
![Page 40: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/40.jpg)
DECIDER
40
Right to say yes or no
Mightiest person
![Page 41: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/41.jpg)
INITIATOR
41
Person who brings new ideas and solutions intothe company
![Page 42: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/42.jpg)
SPECIFIC MARKETING CONSIDERATIONSIN THE INDUSTRIAL FACILITIES BUSINESS
42
Long decision taking process
High risk
Complex buying center
The specific competitive situation
![Page 43: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/43.jpg)
PRODUCT POLICY
43
Focuses on innovation
Has to care for high flexibility in research anddevelopment
And manufacturing and assembling
![Page 44: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/44.jpg)
PRICE
44
Strict bid and tender rules
High transparency
Add value with service offering to achieve a differentiating position
Another aspect: financing and sourcing models
![Page 45: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/45.jpg)
DISTRIBUTION POLICY
45
Focus on negotiation phase
Provide excellent people in the selling center
High technical knowledge
![Page 46: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/46.jpg)
COMMUNICATION
46
Problem solver!
Proving success with comparable tasks
Reference projects!
![Page 47: Dsbm 05- conusmer behavior [autosaved]](https://reader034.vdocument.in/reader034/viewer/2022051503/5a64ef677f8b9a223a8b468d/html5/thumbnails/47.jpg)
KEY CHARACTERISTICS OF ORGANISATIONAL/BUSINESS BUYING BEHAVIOUR
Fewer, larger Buyers
Geographically Concentrated
Derived demand
Close Supplier–customer Relationship
Professional Purchasing
Multiple Buying Influences
Direct Purchasing
Motives for purchase
AOT - THARAKA DIAS 47