4. Buying Behavior (2)

8/9/2019 4. Buying Behavior (2)

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Buying behavior

Factors influencing buying

behavior; stages in buying


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The 7 Os framework of research

1. Who constitutes the markets? Occupants

2. What does the market buy? Objects

3. Why does the market buy? Objectives

4. Who participates in the buying? Organizations

5. How does the market buy? Operations

6. When does the market buy? Occasions

7. Where does the market buy? Outlets


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The 7 Os framework of research

1. Who constitutes the markets? Occupants

2. What does the market buy? Objects

3. Why does the market buy? Objectives

4. Who participates in the buying? Organizations

5. How does the market buy? Operations

6. When does the market buy? Occasions

7. Where does the market buy? Outlets


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In this lecture we focus on -


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Factors influencing buyer behavior


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Factors Influencing

Consumer Behavior

Factors Influencing

Consumer Behavior

Culture

Sub-culture

Socialclass

Social

Referencegroups

Family

Rolesand

status

PersonalAge andlife-cycle

Occupation

Economicsituation

LifestylePersonality

andself-concept

Psycho-logical

Motivation

Perception

Learning

Beliefs andattitudes

Buyer

Cultural


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Factors Affecting Consumer

Behavior:

Culture


Behavior:

Culture

Social Class

Societys relativelypermanent & ordered

divisions whose membersshare similar values,interests, and behaviors.

Measured by: Occupation,Income, Education, Wealth

and Other Variables.

Social Class

Societys relativelypermanent & ordereddivisions whose membersshare similar values,interests, and behaviors.

Measured by: Occupation,Income, Education, Wealthand Other Variables.

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 on

common 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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Cultural Factors

Culture exerts a broad and deep influence on

consumer behavior, it is a result if the persons

upbringing.

Subculture includes nationalities, religion, racialgroups and geographic regions

Social class are relatively homogeneous and

enduring divisions in society, which are

hierarchically ordered and whose members

share similar values, interests and behavior


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Groups

Membership

Reference

Groups

Membership

Reference


Behavior:

Social


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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Social Factors

Referenced groups all groups that have a direct, faceto face (primary groups) or indirect (secondary groups)influence on a persons attitude or behavior. Referencegroups can also be groups of which an individual is not a

member (aspirational group) Family is the most important consumer- buying

organization, members of a family are the mostimportant primary reference group

Roles and statuses people choose products thatcommunicate their role and status in life (therefore theimportance of the status symbolpotential of brands)


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Behavior:

Personal


Behavior:

PersonalPersonal 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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Personal factors

1. Buyers age and stage in lifecycle1. From a consumer of baby food to ginseng tablets

2. There is a family lifecycle too bachelor to solitarysurvivor

2. Occupation

3. Economic circumstances

4. Lifestyle

1. Psychographics the science of measuring andcategorizing consumer lifestyles AIO framework andVALS

5. Personality and self concept


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AIO statements identify consumer

activities, interests, and opinions

Activity questions ask consumers to indicate

what they do, what they buy, and how they

spend their time.

Interest questions focus on what the

consumers preferences and priorities are.

Opinion questions ask for consumers views

and feelings on such things as world, local,moral, economic, and social affairs.


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SRI developed two psychographic

inventories: VALS and VALS 2

VALS is based upon motivational and

developmental psychological theories

particularly Maslows hierarchy of needs

theory.

VALS 2 was developed specifically to

measure consumer buying patterns.


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The VALS 2 Inventory

Goal of VALS 2 is to identify specific relationshipsbetween consumer attitudes and purchase behavior.

Three self-identify orientations: principle oriented people,

status oriented people, and action oriented people. Three resource orientations: financial, psychological, and

material. Based upon total number of resources, peoplecould be categorized based upon their level of resources.

VALS 2 used by corporations to understand the basis forconsumer lifestyles, which is useful for developingpromotional strategy and even where to place retailstores such as The Sharper Image.


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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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Psychological factors

1. Motivation a need becomes a

motivation only when there is an intensity

to satisfy it. Many theories namely

Freudian, Maslows and Herzbergs

2. Perception

3. Learning

4. Belief


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Maslows 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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Psychological factors

1. Motivation

2. Perception How the motivated person acts isdetermined by his/her perceptions. Peoplesperceptions are skewed they experience selective

attention, selective distortion and selective retention3. Learning Involves changes in peoples behaviorpost experience. They arise from interplay of drives,stimuli, cues, responses and reinforcement

4. Belief through doing and learning, people develop

beliefs


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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 slogan

Stimuli in the environment

External Stimuli

TV advertising Magazine ad Radio slogan

Stimuli 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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The 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 productUsing the product

Personal SourcesPersonal Sources

Commercial SourcesCommercial Sources

Public SourcesPublic Sources

Experiential SourcesExperiential Sources

Th B D i i P


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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 CarefulCalculations & 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

How They Evaluate Brand Alternatives

Th B D i i P


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The 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 ofOthers

UnexpectedSituationalFactors

The B er Decision Process


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The Buyer Decision ProcessStep 5. Post-purchase Behavior

The Buyer Decision ProcessStep 5. Post-purchase Behavior

Consumers Expectations of

Products Performance

Consumers Expectations of

Products Performance

Dissatisfied CustomerDissatisfied CustomerSatisfied Customer!Satisfied Customer!

Products Perceived PerformanceProducts Perceived Performance

Cognitive DissonanceCognitive Dissonance


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Stages in the Adoption ProcessStages in the Adoption Process

AwarenessAwareness

InterestInterest

EvaluationEvaluation

TrialTrial

AdoptionAdoption

Ad t C t i


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Adopter CategoriesAdopter Categories

Percent a

geofAdopte

rs

Time of Adoption

Early Late

Innovat o

rs

EarlyAdopters

Early Majority

2.5%

13.5%

34% 34%

16%

Laggards

Late Majority


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Influence 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 and

experience of thetarget market?

ComplexityIs the innovation

difficult tounderstand or use?

Relative AdvantageIs the innovation

superior to existingproducts?

CommunicabilityCan results be easily

observed or describedto others?

ProductCharacteristics

ProductCharacteristics


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What is a Business Market?What is a Business Market?

Business Buyer BehaviorBusiness Buyer Behavior refers to thebuying behavior of all the organizationsthat buy goods and services for use in theproduction of other products and servicesthat are sold, rented, or supplied to others.

The business market is huge and involves

many more dollars and items do consumermarkets.

Ch t i ti f B i M k t

Characteristics of Business Markets


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Types of Decisions & the

Decision Process

Types of Decisions & the

Decision 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

M d l f B i B B h i

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

Interpersonaland IndividualInfluences

Organizational Influences

Product or ServiceChoice

Supplier Choice

Order Quantities

Delivery Termsand Times

Service Terms

Payment

The Buying Center

Buying DecisionProcess

B i B i Sit ti

Business Buying Situations


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Business Buying SituationsBusiness Buying Situations

Straight Re-buyStraight Re-buy

New Task BuyingNew Task Buying

Modified Re-buyModified Re-buy

In

volvedD

ec

isio

nMakin

g


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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

M j I fl B i

Major Influences on Business


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Buyer Behavior


Buyer Behavior

EnvironmentalEconomic, Technological, Political, Competitive

EnvironmentalEconomic, Technological, Political, Competitive

Organizational

Objectives, Policies, Procedures,Structure, & Systems

OrganizationalObjectives, Policies, Procedures,

Structure, & Systems

InterpersonalAuthority, Status, Empathy &

Persuasiveness

InterpersonalAuthority, Status, Empathy &

Persuasiveness

IndividualAge, Education, Job Position, Personality &

Risk Attitudes

IndividualAge, Education, Job Position, Personality &

Risk Attitudes

BuyersBuyers


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Stages of the

Business

Buying Process

Stages of the

Business

Buying ProcessProblem 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

R t St

Rest Stop:


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Rest Stop:

Reviewing

theConcepts

Rest Stop:

Reviewing

theConcepts Understand the consumer market and the major

factors that influence consumer buyer behavior.

Identify and discuss the stages in the buyerdecision process.

Describe the adoption and diffusion process fornew products.

Define the business market and identify the majorfactors that influence business buyer behavior.

List and define the steps in the business buyingdecision process.

4. Buying Behavior (2)

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