6 Consumer and Business Behavior

Intro to Marketing

Consumer Markets

V.S.

Business MarketsConsumer buying behavior:Refers to the buying behavior of people who buy goods and services for ________ use.These people make up the consumer ________.

The central question for marketers is:How do consumers respond to various marketing efforts the company might use?

Consumer Market2Model of Consumer BehaviorStimulus-ResponseProductPricePlacePromotionProduct choiceBrand choicePurchase timingPurchase quantityMarketing and Other StimuliBuyers Response

Buyers Black BoxBuyer characteristics CulturalSocialPersonal PsychologicalBuyer decision processFive stagesEconomicTechnologicalPoliticalCultural5. Post-purchase behavior4. Purchase decision3. Evaluation of alternatives2. Information search1. Need recognitionThe Consumers Buying Decision Process Marketers can facilitate need recognition through their choice of media and the timing of their ad insertions. Restaurants frequently use billboards (above) in high traffic locations and run radio ads during meal hours.Triggering Need Recognition

Theres stimuli in the environment that triggers your need for something5Information SearchFor some types of purchases, consumers will search for more information before they are willing to make a decision.

Marketers must study how targeted consumers make evaluations, so they will be in a better position to influence evaluations.

Evaluation of Alternatives

Compensatory vs. non-compensatory modelsPurchase DecisionIntentions to purchase a particular brand are not always acted upon. Factors that influence the purchase decision:ContextAttitudes of othersUnexpected situational factors

Purchase intention doesnt necessarily equal purchase decision.Cognitive Dissonance: after making a purchase, buyers often doubt whether they made the right decision.

Marketers can minimize dissonance by:Reassuring consumers they made the right choice and minimizing the potential for product misuse (product literature and instructions).Offering mechanisms for lodging complaints (1-800 phone numbers, Web forms, etc.).Being responsive to problems and questions.

Post Purchase BehaviorEvery purchase is a compromise so there has to be cognitive dissonance

5. Post-purchase behavior4. Purchase decision3. Evaluation of alternatives2. Information search1. Need recognitionHow to React to Consumers Buying Decision Process Provide information when/where consumers search for infoEncourage consumers to see existing state is not desired stateUnderstand criteria and communicate superiorityStress brand loyalty and address choice heuristicManage expectations and outcomesConsumer Markets

V.S.

Business Markets

Business BuyersFewer and largerGeographically concentratedMore decision participantsProfessional purchasersThe business marketer normally deals with far fewer but far larger buyers than the consumer marketer does.Business markets are more geographically concentrated. More than half the business buyers are concentrated in eight states.Compared with consumer purchases, a business purchase usually involves more decision participants and a more professional purchasing effort.Often, business buying is done by trained purchasing agents who spend their working lives learning how to buy better.

DECIDERINFLUENCERGATEKEEPERBUYERUSERBuying Centers An influencer affects the buying decision by dispensing advice, expertise. Highly-trained employees like engineers, quality-control specialists, and other technical experts may be key influencers.

The gatekeeper is the person who controls the flow of information to other members. Typically the gatekeeper is the purchasing agent, who gathers information and materials from salespeople, schedules sales presentations, and controls suppliers access to other participants in the center.

The decider is the member of the buying center who makes the final decision and has the greatest power within the buying center. This person has power to authorize spending the companys money. For a routine purchase, the decider may be the purchasing agent.

The buyer is the person who executes the purchase and handles the details of the transaction. The buyer obtains competing bids, negotiates contracts, and arranges delivery dates and payment plans.

The user is the member of the buying center who actually needs and uses the product.

Business Markets and Business Buyer BehaviorBusiness buyer behavior:Refers to the buying behavior of the organizations that buy goods and services for use in the production of other products and services or for the purpose of reselling, or renting them to others for a profit.

Commercial Business, Government, Institutions

Buyers and sellers are much more dependent on each other in business markets.

Business MarketsBusiness buyers usually face more complex buying decisions.

The business buying process tends to be more formalized.Need to provide more value than competitors do

Value in Business MarketsPoints of ParityPoints of ContentionPoints of DifferenceNot Relevant to CustomersRelevant to Customers2-21Differences in value importance between Consumer and Business Markets