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Consumer and Business Buyer Behavior
Nathan George
Consumer Buying Behavior
Consumer Buying Behavior refers to the buying behavior of final consumers individuals & households who buy goods and services for personal consumption. The central question for marketers is: How do consumers respond to various marketing efforts the company might use?
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Model of Buyer Behavior
Product Price Place Promotion
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Marketing and Other Stimuli
Economic Technological Political
Cultural
Buyer Characteristics
Buying Decision Process
Buyers Black Box
Product Choice
Brand Choice
Dealer Choice
Buyers Response
Purchase Timing Purchase Amount
Factors Influencing Consumer Behavior
Cultural Social Personal
Culture Subculture Reference groups Family Roles and status
Age and life-cycle Occupation Economic situation Lifestyle Personality and self-concept
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Psychological
Motivation Perception Learning Beliefs and attitudes
Buyer
Social class
Factors Affecting Consumer Behavior: Culture
Culture
Most basic cause of a person's wants and behavior. Values, Perceptions, Wants & Behavior Subculture
Groups of people with shared value systems based on common life experiences. Hispanic Consumers African American Consumers Asian American Consumers Mature Consumers
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Social Class
Societys relatively permanent & ordered divisions whose members share similar values, interests, and behaviors. Measured by: Occupation, Income, Education, Wealth and Other Variables.
Factors Affecting Consumer Behavior: Social
Groups Membership Reference Family Husband, wife, kids Influencer, buyer, user
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Social Factors
Roles and Status
Factors Affecting Consumer Behavior: Personal
Personal Influences
Age and Life Cycle Stage
Economic Situation Occupation
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Personality & Self-Concept
Lifestyle Identification
Activities
Interests
Opinions
Factors Affecting Consumer Behavior: Psychological
Motivation
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Beliefs and Attitudes
Psychological Factors
Perception
Learning
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Perception
Perception
Information Inputs Interpretation Selective Exposure Selective Distortion Selective Retention
Maslows Hierarchy of Needs
Self Actualization
(Self-development)
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Esteem Needs (self-esteem, status) Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)
The Buyer Decision Process
Need Recognition
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Information Search
Evaluation of Alternatives
Purchase Decision
Post-purchase Behavior
The Buyer Decision Process
Step 1. Need Recognition
Need Recognition
Buyer Recognizes a Problem or Need
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Internal Stimuli
Hunger
Thirst A persons normal needs
External Stimuli
TV advertising Magazine ad Radio slogan Stimuli in the environment
The Buyer Decision Process
Step 2. Information Search
Personal Sources
Family, friends, neighbors Most effective source of information
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Commercial Sources
Advertising, salespeople Receives most information from these sources Mass Media Consumer-rating groups
Public Sources
Experiential Sources
Handling the product Examining the product Using the product
The Buyer Decision Process
Step 3. Evaluation of Alternatives
Consumer May Use Careful Calculations & Logical Thinking Consumers May Buy on Impulse and Rely on Intuition Consumers May Make Buying Decisions on Their Own.
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Consumers May Make Buying Decisions Only After Consulting Others.
Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives
The Buyer Decision Process
Step 4. Purchase Decision
Purchase Intention Desire to buy the most preferred brand Unexpected Situational Factors
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Attitudes of Others
Purchase Decision
The Buyer Decision Process
Step 5. Post-purchase Behavior
Consumers Expectations of Products Performance Products Perceived Performance
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Satisfied Customer!
Dissatisfied Customer
Cognitive Dissonance
Buying Decision Process
Consumer satisfaction is a function of consumer expectations and perceived product performance.
Performance < Expectations Disappointment
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Performance = Expectations
Satisfaction
Performance > Expectations
Delight
Buying Decision Process
Cognitive dissonance: a buyers doubts shortly after a purchase about whether it was the right decision.
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Stages in the Adoption Process
Awareness
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Interest
Evaluation
Trial
Adoption
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Stages in the Adoption Process
1. 2. 3. Awareness:
4.
5.
Consumer becomes aware of the new product, but lacks information about it. Interest: Consumer seeks information about new product. Evaluation: Consumer considers whether trying the new product makes sense. Trial: Consumer tries new product on a small scale to improve his or her estimate of its value. Adoption: Consumer decides to make full and regular use of the new product.
Adopter Categories
Percentage of Adopters
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Early Majority Innovators
Late Majority
Early Adopters
13.5%
34%
34% 16%
Laggards
2.5%
Time of Adoption Late
Early
Influence of Product Characteristics on Rate of Adoption
Communicability Can results be easily observed or described to others? Relative Advantage Is the innovation superior to existing products?
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Divisibility
Can the innovation be used on a trial basis?
Product Characteristics
Compatibility Does the innovation fit the values and experience of the target market?
Complexity
Is the innovation difficult to understand or use?
What is a Business Market?
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Business Buyer Behavior refers to the buying behavior of 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.
The business market is huge and involves many more dollars and items than do consumer markets.
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The Business Buying Process
Characteristics of Business Markets
Market Structure and Demand
Fewer, larger buyers Geographically concentrated Demand derived from consumers Fluctuating demand
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Nature of the Buying Unit
More members
More professional purchasing effort
Types of Decisions & the Decision Process
More complex decisions
Process is more formalized Buyer and seller are more dependent on each other Build close long-term relationships with customers
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Participants in the Business Buying Process
Decision-making unit of a buying organization is called its buying center. Not a fixed and formally identified unit. Membership will vary for different products and buying situations. Buying Center Members:
Users Deciders Influencers Buyers Gatekeepers
Participants in the Business Buying Process: The Buying Center
Gatekeepers Users
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Buying Center Buyers Deciders
Influencers
Model of Business Buyer Behavior
Product Price Place
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Marketing and Other Stimuli
Economic Technological
Political
Cultural The Buying Organization Interpersonal and Individual Influences
Promotion
Organizational Influences
The Buying Center Buying Decision Process
Product or Service Choice Supplier Choice Order Quantities
Buyers Response
Delivery Terms and Times Service Terms
Payment
Major Influences on Business Buyer Behavior
Environmental
Economic, Technological, Political, Competitive
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Organizational
Objectives, Policies, Procedures, Structure, & Systems
Interpersonal
Authority, Status, Empathy & Persuasiveness
Individual
Age, Education, Job Position, Personality & Risk Attitudes
Buyers
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Major Types of Buying Situations
Straight Re-buy
The buyer routinely reorders something without any modifications.
Modified Re-buy
The buyer wants to modify product specifications, prices, terms, or suppliers.
New Task
The buyer purchases a product or service for the first time.
Business Buying Situations
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New Task Buying Involved Decision Making
Modified Re-buy
Straight Re-buy
Rest Stop: Reviewing the Concepts
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Understand the consumer market and the major factors that influence consumer buyer behavior. Identify and discuss the stages in the buyer decision process. Describe the adoption and diffusion process for new products. Define the business market and identify the major factors that influence business buyer behavior. List and define the steps in the business buying decision process.
