CHAPTER THREE
Consumer and
Organizational Buying
Behavior
1
Consumer Buying Behavior refers
to the buying behavior of final
consumers -individuals &
households who buy goods and
services for personal consumption.
All these consumers make up the
consumer market.
How do consumers respond to
various marketing efforts the
company might use?
Model of Consumer
Behavior
Marketing Buyer’s Black Buyer Responses
and Box
Other Product Choice
Stimuli Brand Choice
Buyer
Marketing Characteristics
Dealer Choice
Product
Price
Place Purchase Timing
Promotion
Other Buyer Decision Purchase Amount
Economic Process
Technological
Political
Cultural
Factors Influencing Consumer
Behavior
Cultural
Social
Personal Psycho-
Reference Age & Logical
Culture
Culture groups life-cycle Motivation
Occupation
Sub- Economic
Perception Buyer
Sub- Family situation
culture
culture Learning
Lifestyle
Personality Beliefs &
Roles attitudes
Social
Social & self-concept
class
class status
Behavior
High Low
Involvement Involvement
Significant
differences
between Complex Variety-
brands Buying Seeking
Behavior Behavior
Few Dissonance- Habitual
differences Reducing Buying Buying
between
brands
Behavior Behavior
Complex buying behavior
When consumers are highly involved in a
purchase and perceive significant differences
among the brands.
Consumers may be highly involved when the
product is expensive, risky and purchased
infrequently
Marketers need to help buyers learn about
product-class attributes& their relative
importance.
They need to differentiate their brand
features, by describing them using print media
with long copy.
Dissonance-Reducing buying
behavior
Occurs when consumers are highly
involved with an expensive , risky
purchase but see little differences
among brands.
Consumers might experience post
purchase dissonance when they
notice certain disadvantages of the
purchased brand or hear favorable
things about brands not purchased.
Habitual buying behavior
Occurs under conditions of low
consumer involvement and little
significant brand difference.
Consumers appear to have low
involvement with most low cost,
frequently purchased products.
Ad repetition creates brand
familiarity rather than brand
conviction “ consumers don’t form
strong attitudes toward a brand, they
Variety-seeking buying
behavior
In situations characterized by low
consumer involvement but
significant perceived brand
differences.
In such cases consumers often do a lot
of brand switching.
Brand switching occurs for the sake
of variety rather than because of
dissatisfaction.
Consumer Buying Decision
Process
Purchas
e
Evaluation Decisio
Postpurchase
of n Behavior
Alternatives
Informatio
Need n
Search
Recognit
ion
1. Need (Problem) Recognition
Difference between the desired state and the actual
condition.
Deficit in assortment of products.
E.g. Hunger stimulates your need to eat.
2. Information search
Internal search like memory.
External search. If you need more information, friends
and relatives word of mouth can be used.
A successful information search leaves a buyer with
possible alternatives.
Information Search
• Family, friends,
Personal neighbors
Personal Sources
Sources
• Most effective source
of information
• Advertising,
Commercial
Commercial Sources
Sources salespeople, Internet
• Receives most
information from
these sources
Public
Public Sources
Sources • Mass Media
• Consumer-rating
groups
•Handling the product
Experiential
Experiential Sources
Sources •Examining the
product
•Using the product
Need to establish criteria for
evaluation.
Product
Product Attributes
Attributes
Evaluation
Evaluationof
of Quality,
Quality, Price,
Price, &&Features
Features
Degree
Degree of
of Importance
Importance
Which
Whichattributes
attributesmatter
mattermost
most to
tome?
me?
Brand
Brand Beliefs
Beliefs
What
What do
doII believe
believeabout
about each
eachavailable
availablebrand?
brand?
Total
Total Product
Product Satisfaction
Satisfaction
Based
Basedon
onwhat
what I’m
I’mlooking
lookingfor,
for, how
howsatisfied
satisfied
would
wouldII be
bewith
witheach
eachproduct?
product?
Evaluation
Evaluation Procedures
Procedures
Choosing
Choosingaaproduct
product (and
(andbrand)
brand)based
basedon
onone
one
alternative, includes product, package,
store, method of purchase etc.
5. Postpurchase Behavior
Satisfied Customer
Consumer’s
Expectations of Product’s Performance
&
Product’s Perceived
Performance.
Dissatisfied
Customer
Post-Purchase Behavior
The satisfaction or dissatisfaction that the
consumer feels about the purchase.
Consumer’s expectations
Product’s perceived
Relationship between:
performance
The larger the gap between expectation and
performance, the greater the consumer’s
dissatisfaction.
Cognitive dissonance is the discomfort caused by
a post-purchase conflict.
Customer satisfaction is a key to building
profitable relationships with consumers—to keeping
and growing consumers and reaping their customer
lifetime value.
Behavior
Comprises all the organizations that
buy goods and services for use in the
production of other products and
services that are sold, rented, or supplied
to others.
Organizational /Industrial/ buyers are
those who purchase items on behalf of
their business or organization.
The business market is huge and
involves many more dollars and goods
Characteristics of Business
Markets
Contain
Contain fewer,
fewer, but
but
larger
larger buyers
buyers
Customers
Customers are
are more
more
geographically
geographically concentrated
concentrated
Buyer
Buyer demand
demand isis derived
derived from
from
final
final consumer
consumer demand
demand
Demand is often more
inelastic
Demand often
fluctuates more, and
more quickly
The nature and size of Organizational and
Consumer Markets
Behavior
Major Types of Organizational
Buying Situations
New
New Task
Task Buying
Buying
Modified
Modified Rebuy
Decision Making
Rebuy
Involved
Straight
Straight Rebuy
Rebuy
1. Straight Re-Purchase –
These purchase situations involve
routine ordering.
In most cases buyers simply reorder
the same products or services that
were previously purchased.
In fact, many larger companies have
programmed re-purchases into an
automated ordering system that
initiates electronic orders when
inventory falls below a certain pre-
determined level.
2. Modified Re-Purchase – These
purchases occur when products
or services previously
considered a straight re-
purchase are for some reason
now under a re-evaluation
process.
There are many reasons why a
product is moved to the status
of a modified re-purchase.
Some of these reasons include:
End of purchase contract period,
Change in who is involved in
making the purchase,
Supplier is removed from an
approved suppliers list,
Mandate from top level of
organization to re-evaluate all
purchasing, or
Strong marketing effort by
competitors.
3. New Task Purchase
As the name suggests, these purchases
are ones the buyer has never or rarely
made before.
In some ways new task purchases can be
considered as either minor or major
depending on the total cost or overall
importance of the purchase.
For example, if faced with a major new
task purchase, which often involves
complex items, such as computer systems,
buildings, robotic assembly lines, etc., the
purchase cycle from first recognizing the
need to placement of the order may be
months or even years.
Participants in the Business
Buying Process
Users
Influencer
Decision-
Factors
Factors
s
Making
Situational
Situational
Unexpected
Unit of a
Unexpected
Buying Buyers
Organizati
Attitudes
Attitudes
on is
of
of Its
Called
Others
Others
Buying
Center. Gatekeepe Deciders
rs
Users - members of the organization who will use the
product or service (initiate the buying proposal and
help define product specifications).
Influencers - help define specifications and provide
information for evaluating alternatives (Technical
personnel are particularly important influencers).
Buyers - have formal authority to select the supplier
and arrange terms of purchase. ( their major role is in
selecting vendors and negotiating)
Deciders have formal or informal power to select or
approve the final suppliers.
Gatekeepers control the flow of information to
others.
Buyer Behavior
Environment
al
Economic Organizatio
developments nal
Interpers
Supply Objectives
Conditions onal Individu
Policies
al
Technological Authority
Age
Buyer
change Procedures
Status Education s
Job
Political and Organizational Position
regulatory Structure Empathy
Personalit
developments y
Systems Persuasiven Risk
Competitive ess Attitudes
Developments
Culture and
Decision making process in organizational buying
Thank You
for Your
Attention
