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3 consumerandbusinessbuyerbehavior1-100
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5-15-1
Nathan GeorgeNathan George
Consumer
and Business
Buyer Behavior
5-25-2
Consumer Buying BehaviorConsumer Buying Behavior
• 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 How do consumers respond to various marketing efforts the company might use?” marketing efforts the company might use?”
5-35-3
Model of Buyer BehaviorModel of Buyer BehaviorMarketing andOther Stimuli
Marketing andOther Stimuli
Buyer’s Black BoxBuyer’s Black Box
Buyer’s ResponseBuyer’s Response
Product
Price
Place
Promotion
Economic
Technological
Political
Cultural
Buyer Characteristics
Buying Decision Process
Product Choice
Brand Choice
Dealer Choice
Purchase Timing
Purchase Amount
5-45-4
Factors Influencing Consumer BehaviorFactors Influencing Consumer Behavior
Culture
Sub-culture
Socialclass
Social
Referencegroups
Family
Rolesand
status
PersonalAge andlife-cycle
OccupationEconomicsituationLifestyle
Personalityand
self-concept
Psycho-logical
MotivationPerceptionLearning
Beliefs andattitudes
Buyer
Cultural
5-55-5
Factors Affecting Consumer Behavior:CultureFactors Affecting Consumer Behavior:Culture
Social Class• Society’s relatively permanent &
ordered divisions whose members share similar values, interests, and behaviors.
• Measured by: Occupation, Income, Education, Wealth and Other Variables.
Social Class• Society’s relatively permanent &
ordered divisions whose members share similar values, interests, and behaviors.
• Measured by: Occupation, Income, Education, Wealth and 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 shared
value systems based on common life experiences.
• Hispanic Consumers
• African American Consumers
• Asian American Consumers
• Mature Consumers
Subculture• Groups of people with shared
value systems based on common life experiences.
• Hispanic Consumers
• African American Consumers
• Asian American Consumers
• Mature Consumers
5-65-6
Groups• Membership• Reference
Groups• Membership• Reference
Factors Affecting Consumer Behavior:Social Factors Affecting Consumer Behavior:Social
Family• Husband, wife, kids• Influencer, buyer, user
Family• Husband, wife, kids• Influencer, buyer, user
Roles and StatusRoles and Status
Social FactorsSocial Factors
5-75-7
Factors Affecting Consumer Behavior:PersonalFactors Affecting Consumer Behavior:Personal
Personal InfluencesPersonal Influences
Age and Life CycleStage
Age and Life CycleStage OccupationOccupation
Economic SituationEconomic Situation
Lifestyle IdentificationLifestyle Identification
ActivitiesActivities OpinionsOpinions
InterestsInterests
Personality & Self-ConceptPersonality & Self-Concept
5-85-8
Factors Affecting Consumer Behavior:PsychologicalFactors Affecting Consumer Behavior:Psychological
Psychological Factors
MotivationMotivation
PerceptionPerception
LearningLearning
Beliefs and Attitudes
Beliefs and Attitudes
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PerceptionPerception
• Perception–Information Inputs–Interpretation–Selective Exposure–Selective Distortion–Selective Retention
5-105-10
Maslow’s Hierarchy of NeedsMaslow’s 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)
5-115-11
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
5-125-12
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 person’s normal needs
Internal Stimuli
• Hunger• Thirst• A person’s normal needs
Need RecognitionBuyer Recognizes a Problem or Need
Need RecognitionBuyer Recognizes a Problem or Need
5-135-13
The Buyer Decision ProcessStep 2. Information Search
The Buyer Decision ProcessStep 2. Information Search
•Family, friends, neighbors•Most effective source of information
•Advertising, salespeople•Receives most information from these sources
•Mass Media•Consumer-rating groups
•Handling the product•Examining the product•Using the product
Personal Sources Personal Sources
Commercial SourcesCommercial Sources
Public SourcesPublic Sources
Experiential SourcesExperiential Sources
5-145-14
The Buyer Decision ProcessStep 3. Evaluation of Alternatives
The Buyer Decision ProcessStep 3. Evaluation of Alternatives
Consumer May Use Careful Calculations & Logical Thinking
Consumer May Use Careful Calculations & Logical Thinking
Consumers May Buy on Impulse and Rely on Intuition
Consumers May Buy on Impulse and Rely 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
5-155-15
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 of Others
UnexpectedSituational Factors
5-165-16
The Buyer Decision ProcessStep 5. Post-purchase Behavior
The Buyer Decision ProcessStep 5. Post-purchase Behavior
Consumer’s Expectations of
Product’s Performance
Consumer’s Expectations of
Product’s Performance
Dissatisfied CustomerDissatisfied CustomerSatisfied Customer!Satisfied Customer!
Product’s Perceived Performance Product’s Perceived Performance
Cognitive DissonanceCognitive Dissonance
5-175-17
Buying Decision ProcessBuying Decision Process
Consumer satisfaction is a function of consumer expectations and perceived product performance.
Performance < Expectations Disappointment
Performance = Expectations Satisfaction
Performance > Expectations Delight
5-185-18
• Cognitive dissonance: a buyer’s doubts shortly after a purchase about whether it was the right decision.
Buying Decision ProcessBuying Decision Process
5-195-19
Stages in the Adoption ProcessStages in the Adoption Process
AwarenessAwareness
InterestInterest
EvaluationEvaluation
TrialTrial
AdoptionAdoption
5-205-20
Stages in the Adoption ProcessStages in the Adoption Process
1. Awareness: Consumer becomes aware of the new product, but lacks information about it.
2. Interest: Consumer seeks information about new product.
3. Evaluation: Consumer considers whether trying the new product makes sense.
4. Trial: Consumer tries new product on a small scale to improve his or her estimate of its value.
5. Adoption: Consumer decides to make full and regular use of the new product.
5-215-21
Adopter CategoriesAdopter CategoriesP
erc
enta
ge
of
Ad
op
ters
Time of AdoptionEarly Late
Inn
ova
tors
Early Adopters
Early Majority
2.5%13.5%
34% 34%
16%
Laggards
Late Majority
5-225-22
Influence of Product Characteristics
on Rate of Adoption
Influence of Product Characteristics
on Rate of Adoption
DivisibilityCan the innovation
be used on a trial basis?
CompatibilityDoes the innovation
fit the values and experience of the
target market?
ComplexityIs the innovation
difficult tounderstand or use?
Relative AdvantageIs the innovation superior
to existing products?
Communicability Can results be easily
observed or described to others?
ProductCharacteristics
ProductCharacteristics
5-235-23
What is a Business Market?What is a Business Market?
• Business Buyer Behavior 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.
5-245-24
The Business Buying ProcessThe Business Buying Process
5-255-25
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 members • More professional purchasing effort
• More members • 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
5-265-26
Participants in the Business Buying Process
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
5-275-27
Participants in the Business BuyingProcess: The Buying CenterParticipants in the Business BuyingProcess: The Buying Center
Buying CenterBuying Center
UsersGatekeepers
Buyers Deciders
Influencers
5-285-28
The Buying OrganizationThe Buying Organization
Model of Business Buyer BehaviorModel of Business Buyer BehaviorMarketing andOther Stimuli
Marketing andOther Stimuli
Buyer’s ResponseBuyer’s Response
Product
Price
Place
Promotion
Economic
Technological
Political
Cultural
Interpersonal and Individual Influences
Organizational Influences
Product or Service Choice
Supplier Choice
Order Quantities
Delivery Terms and Times
Service Terms
Payment
The Buying Center
Buying DecisionProcess
5-295-29
Major Influences on Business Buyer BehaviorMajor Influences on Business Buyer Behavior
EnvironmentalEconomic, Technological, Political, Competitive
EnvironmentalEconomic, Technological, Political, Competitive
OrganizationalObjectives, 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
5-305-30
Major Types of Buying SituationsMajor Types of Buying Situations
The buyer routinely reorders something without any modifications.
Straight Re-buy
Modified Re-buy
New Task
The buyer wants to modify product specifications, prices, terms, or suppliers.
The buyer purchases a product or service for the first time.
5-315-31
Business Buying SituationsBusiness Buying Situations
Straight Re-buyStraight Re-buy
New Task BuyingNew Task Buying
Modified Re-buyModified Re-buy
Inv
olv
ed
De
cis
ion
Ma
kin
g
5-325-32
Rest Stop:Reviewing the Concepts
Rest Stop:Reviewing the Concepts
• 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.
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