marketing

Understanding Consumer and Business Buyer Behavior

Chapter 5

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Learning Objectives

1. Understand the consumer market and the major factors that influence consumer buyer behavior

2. Identify and discuss the stages in the buyer decision process

3. Define the business market and identify the major factors that influence business buyer behavior

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In this chapter, we continue our marketing journey with a closer look at the most important element of the marketplace—customers.

The aim of marketing is to affect how customers think about and behave toward the organization and its market offerings.

But to affect the whats, whens, and hows of buying behavior, marketers must first understand the whys.

We look first at final consumer buying influences and processes and then at the buying behavior of business customers.

Chapter Overview

Definition of Consumer Buyer Behavior

Characteristic Affecting Consumer Behavior

1. Cultural (Culture, Subculture, & Social Class)

2. Social (Reference Groups, Family, and Role &

Status)

3. Personal (Age & Lifecycle, Occupation, Economic,

Lifestyle, Personality & Self Concept)

4. Psychological (Motivation, Perception, Learning,

Belief and Attitudes)

Introduction to Chapter 5

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Buyer Decision Process

Definition of Business Markets

Factors that influence business buyer behavior

1. Environmental factors

2. Organizational factors

3. Interpersonal factors

4. Individual factors

Introduction to Chapter 5

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Learning Objective 1

Understand the consumer market and the major factors that influence consumer

buyer behavior

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Consumer Markets and Consumer Buyer Behavior

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Consumer buyer behavior refers to the buying behavior of final consumers.Individuals and households who buy goods

and services for personal consumption. All of these consumers combine to make

up the consumer market.E.g.: The American consumer market

consists of more than 300 million people. The world consumer market consists of more than 6.6 billion people.

Learning Objective 2

Identify and discuss the stages in the buyer decision process

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Characteristics Affecting Consumer Behavior

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Cultural factors

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a) Culture Set of basic values, perceptions, wants

& behaviors learned by a member of society from family & other important institutions.

Marketers are always trying to spot cultural shifts.

E.g.: Increasing concern about health & fitness has created huge industry for health & fitness services, exercise equipments, more natural foods & variety of diet.

Cultural factors

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b) Subculture Subcultures are groups of people with

shared value systems based on common life experiences and situations.

Each culture contains smaller subcultures. Subcultures include nationalities, religions,

racial groups and geographic regions. E.g.: Mature consumers are becoming a

very attractive market. Matured consumers are becoming very attractive market. They desire to look as young as they feel. So, marketers grab the opportunity by producing skin care products and health foods that prevent the effects of aging.

Cultural factors

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c) Social Class Social Classes are

society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors.

Social class is not determined by a single factor, but is measured as a combination of occupation, income, education, wealth, and other variables.

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Social factors

a) Groups:• Reference group: serve as direct / indirect

points of reference in forming person’s behavior.

• Product/brand tend to be strongest when it’s visible to others whom the buyers respects.

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Social factors

b) Family:• Family members can strongly

influence buyer behavior

c)Roles and Status:• Role: Expected activities to perform according

to the person around them. Role will carry status.(e.g.: Role as CEO)

• Status: Esteem given to role by society(e.g.: as a manager, they will buy the clothing that reflects their role & status)

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Personal factors

a) Age and Life-cycle Stage:• People change the goods and services they buy

over their lifetimes. • Marketers are increasingly catering to a

growing number of alternative, nontraditional stages such as unmarried couples, singles marrying later in life, childless couples, same-sex couples, single parents, extended parents (those with young adult children returning home), and others.

• Taste in food, clothes are often age related.

b)Occupation:• A person’s occupation affects the goods and

services bought. • E.g.: Executive workers tend to buy more

business suits.

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Personal factors

c) Economic Situation:• A person’s economic situation will affect

product choice. • E.g.: Car

d)Lifestyle:• A person’s pattern of living as expressed in his

or her psychographics• Pattern of living as expressed via a person’s

activities (hobby/sport/social event), interests (food/fashion), and opinions (about business/products).

Toyota Alphard

Nissan Serena

Example:

Age & Life cycle

babies

Kidsbeginners

teenagers

older

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Lifestyle

e) Personality & Self-concept• Personality refers to the unique psychological

characteristics that lead to relatively consistent and lasting responses to one’s own environment.

• Generally defined in terms of traits such as Sincerity (down-to-earth, honest, wholesome, and cheerful)

• Excitement (daring, spirited, imaginative, and up-to-date)

• Competence (reliable, intelligent, and successful)• Sophistication (upper class and charming)• Ruggedness (outdoorsy and tough)

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● Personality & Self-concept• Self-concept (self image) suggests that people’s

possessions contribute to and reflect their identities.

• “We are what we have”• E.g.: The new Nescafe Gold is for those “who

appreciate finer things in life”

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Psychological factors

a) Motivation• A motive (or drive) is a need that is

sufficiently pressing to direct the person to seek satisfaction.

• Maslow sought to explain why people are driven by particular needs at particular times.

• Person has many needs at given time such as hunger; esteem; belonging.

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Psychological factors

b) Perception• Process by which people select, organize,

and interpret information to form a meaningful picture of the world

• People learn by the flow of information through our senses (sight; smell; taste; hearing; touch)

• Each of us receive, organize, & interpret this information in different way

c) Learning When people act, they learn. Changes in individual’s behavior arising from

experience. Strongly influenced by the consequences of

an individual’s behavioro Behaviors with satisfying results tend to be

repeated.o Behaviors with unsatisfying results tend not to

be repeated.

Psychological factors

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d) Belief and Attitudes A belief is a descriptive thought that a person

has about something. May be based on real knowledge. If some beliefs are wrong, marketer need to have

a campaign to correct them.

An attitude describes a person’s relatively consistent evaluations, feelings toward an object.

Eg : digital camera buyers will have the attitude of “Buy the Best”.

Psychological factors

Consumer Decision-Making Process

Postpurchase Behavior

Postpurchase Behavior

PurchasePurchase

Evaluation of Alternatives

Evaluation of Alternatives

Information SearchInformation Search

Need RecognitionNeed Recognition

Cultural, Social, Cultural, Social, Personal and Personal and Psychological Psychological

Factors Factors affect affect

all stepsall steps

Cultural, Social, Cultural, Social, Personal and Personal and Psychological Psychological

Factors Factors affect affect

all stepsall steps

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Buyer Decision Process

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1) Need Recognition

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• Buyers recognize a need or problem

• The NEED can be triggered by either:a) Internal stimulib) External stimuli

As a result of internal (hunger/thirst) or external stimuli

(advertisement/friend) & might you thinking about buying a new product.

1) Need Recognition

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Marketing helps consumers recognize an imbalance between

present status and preferred state.

Present Status

Present Status

Preferred State

Preferred State

InternalStimuli

External

Stimuli

2) Information SearchInformation search may or may not occur. Consumers can obtain information from any of several sources.

Information Sources

Description

Personal Sources (evaluates products

for buyers)

Family, friends, neighbors, contacts

Commercial Sources (inform buyers)

Advertising, salespeople, dealers, Web sites, packaging,

and displays

Public SourcesMass media articles or news programs, Internet searches,

consumer rating organizations

Experiential SourcesUsing, handling, or examining

the product

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Alternative evaluation: How the consumer processes information to

arrive at brand choices.How consumers go about evaluating purchase

alternatives depends on the individual consumer and the specific buying situation.

Some decisions involve a careful, logical, and systematic evaluation by the consumer.

Some do little analysis, and rely on impulse and intuition

3) Evaluation of Alternatives

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4) Purchase DecisionGenerally, the consumer’s purchase decision will be

to buy the most preferred brand. Two factors can come between the purchase

intention and the purchase decision. Factors that influence the purchase decision:

Attitudes of others: * If someone important to you thinks that you should buy the lowest-priced product, the chances of your buying a more expensive product are reduced.

Unexpected situational factors :* Unexpected events may change the purchase intention.* E.g.: Close competitors drop its price

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5) Postpurchase Behavior

The difference between the consumer’s expectations and the perceived performance of the good purchased determines how satisfied the consumer is.

Example: Performance BELOW Expectation =

Disappointment

Performance EQUALS Expectation = Satisfaction

Performance ABOVE Expectation = Happy & Delightful

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Let’s Discuss This

Think of the last time you were unhappy with a purchase or with a company.

How many people did you tell?Did you let the company know about it? Why or why not? Have you ever returned to that store or

brand?

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Involvement in Purchase Decision

High involvement purchase decisionsHigh level of potential social or economic

consequences.

Low involvement purchase decisionsRoutine purchases

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Mini Discussion

Categorize each of the following as a high or low involvement product:

ShampooComputerPopcornApartmentCell phone

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Discussion - Scenario

Assume the your current small television set (for which you paid RM 69.99 several years ago) has developed wavy lines across the screen and makes the people in your favorite programs sound as though they are using cheap walkie-talkie radios. Therefore, you have decided to work during your holiday to save money for the ultimate RM1,200 high-definition television with surround sound. Trace the steps of your decision process for purchasing your new television.35

Answers1. NEED RECOGNITION: Your present television has

wavy lines and poor sound quality, and you desire a new television set.

2. INFORMATION SEARCH: You check both internal and external sources of information such as your own knowledge, opinions of peers, information from magazines, and the advice of television sales personnel.

3. EVALUATION OF ALTERNATIVES: You consider product attributes of various television brands and models in an evoked set. These attributes might include sound quality, looks, price, warranty, brand name reputation, components, and so on.

4.PURCHASE: You buy the hi-def television after judging alternatives.

5.POSTPURCHASE BEHAVIOR: You are satisfied with your purchase, which was the result of extensive decision making. Alternatively, you are dissatisfied with your purchase, return the television, and begin the process again.

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Business 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 that are sold, rented, or supplied to others.

In the business buying process, business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers and brands.

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Business Markets

Learning Objective 3

Define the business market and identify the major factors that influence business buyer

behavior

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Business markets involve far more dollars and items than do consumer markets.

The main differences between business markets and consumer markets are in :1. Market structure and demand, 2. Nature of the buying unit, 3. Types of decisions and the decision process

involved.

Business Markets

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1. Market Structure and Demand The business marketer normally deals with far

fewer but far larger buyers than the consumer marketer does.

Business demand is derived demand - it ultimately derives from the demand for consumer goods.

2. Nature of the Buying Unit:Business purchases involve more decision

participants.Business buying involves a more professional

purchasing effort.40

Business Markets

3. Types of Decisions and the Decision Process:Business buyers usually face more complex

buying decisions. Involve large sums of money, interaction with many people at many level of org

Business buying process tends to be more formalized. Need detailed product specifications, written order, formal approval.

Buyers and sellers are much more dependent on each other.

Business Markets

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Major Types of Buying Situation

1. Straight re-buy The buyer reorders something without any

modifications.

2. Modified re-buy The buyer wants to modify product

specifications, prices, terms, or suppliers. Better offer and new business

3. New task The company is buying a product or

service for the first time.

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Involvement in Purchase

New Task Buying

Modified Re buy

Straight Re buy

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Involvement in Purchase

Chapter 5

The End

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