Buying Behavior

MODULE 3

CONSUMER BUYER BEHAVIOR

CONSUMER BUYER BEHAVIOR

Consumer buyer behavior

The buying behavior of final consumers – individuals and

households who buy goods and services for personal

consumption.

Consumer market

All the individuals and households who buy or acquire goods and

services for personal consumption.

MODEL OF BUYER BEHAVIOR

Marketing and other stimuli

Marketing Others

Product Economic

Price Technological

Place Political

Promotion Cultural

Buyer

Character-

istics

Buyer’s Responses

Buyer Decision Process

Buyer’s black box

Product Choice

Brand choice

Dealer choice

Purchase Amount

CONSUMER BUYER BEHAVIOR

FACTORS INFLUENCING CONSUMER BEHAVIOR

Cultural Factors: Culture

Sub-Culture

Social Class

CONSUMER BUYER BEHAVIOR

Cultural Factors:

Culture: The set of basic values, perceptions, wants and

behaviors learned by a member of society from family and other

important institutions.

Sub-Culture: A group of people with shared value systems based

on common life experiences and situations.

Social Classes: Relatively permanent and ordered divisions in a

society whose members share similar values, interests, and

behavior.

CONSUMER BUYER BEHAVIOR

FACTORS INFLUENCING CONSUMER BEHAVIOR

Social Factors: Reference Groups

Family

Roles and Status

CONSUMER BUYER BEHAVIOR

FACTORS INFLUENCING CONSUMER BEHAVIOR

Personal Factors: Age and Lifecycle stage

Occupation

Economic situation

Lifestyle

Personality and self concept

CONSUMER BUYER BEHAVIOR

Lifestyle: A person’s pattern of living as expressed in his or her

activities, interests, and opinions.

Personality : The unique Psychological characteristics that lead

to relatively consistent and lasting responses to one’s own

environment.

CONSUMER BUYER BEHAVIOR

FACTORS INFLUENCING CONSUMER BEHAVIOR

Psychological Factors:

Motivation Perception Learning Beliefs and attitudes

CONSUMER BUYER BEHAVIOR

Motive : The need that is sufficiently pressing to direct the person to seek

satisfaction of the need.

Perception : The process by which people select, organize, and interpret

information to form a meaningful picture of the world.

Learning: Changes in an individual’s behavior arising from experience.

Belief : A descriptive thought that a person holds about something.

Attitude : A person's consistently favorable or unfavorable evaluations,

feelings, and tendencies toward an object or idea.

THE BUYER DECISION PROCESS

Need recognition.

Information search.

Alternative evaluation.

Purchase decision.

Post purchase behavior.

THE BUYER DECISION PROCESS

Need recognition: The first stage of buyer decision process, in

which the consumer recognizes a problem or a need.

Information search: The stage of the buyer decision process

which the consumer is aroused to search for information; the

consumer may simply have heightened attention or may go into

active information search.

Alternative evaluation: The stage of the buyer decision process

which the consumer uses information to evaluate alternative

brands in the choice set.

THE BUYER DECISION PROCESS

Purchase decision: The buyer’s decision about which brand to purchase.

Post purchase behavior: The stage of the buyer decision process which the

consumers take further actions after purchase, based on their satisfaction or

dissatisfaction.

TYPES OF BUYING DECISION BEHAVIOR

Complex buying behavior

Dissonance - reducing buying behavior.

Habitual buying behavior.

Variety - seeking buying behavior.

TYPES OF BUYING DECISION BEHAVIOR

Complex buying behavior:

Consumer buying behavior in situations characterized by high consumer

involvement in a purchase and significant perceived differences among brands.

Dissonance - reducing buying behavior:

Consumer buying behavior in situations characterized by high involvement but few

perceived differences among brands.

TYPES OF BUYING DECISION BEHAVIOR

Habitual buying behavior:

Consumer buying behavior in situations characterized by low

consumer involvement and few significant perceived brand

differences.

Variety - seeking buying behavior:

Consumer buying behavior in situations characterized by low

consumer involvement but significant perceived brand differences.

THE BUYER DECISION PROCESS FOR NEW PRODUCT

New product

A good,sevice, or idea that is perceived by some potential

customers as new.

Adoption process

The mental process through which an individual passes from first

hearing about an innovation to final adoption.

ADOPTION PROCESS

Stages in the Adoption process: Awareness

Interest

Evaluation

Trial

Adoption

ADOPTION PROCESS

Adopter Groups: Innovators

Early Adopters

Early Majority

Late Majority

Laggards

BUSINESS BUYER BEHAVIOR

The buying behavior of the organization 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 at a profit.

BUSINESS BUYING PROCESS

The decision process by which business buyers determine which

products and services their organizations need to purchase, and

then find, evaluate, and choose among alternative suppliers and

brands.

CHARACTERISTICS OF BUSINESS MARKETSMARKETING STRUCTURE AND DEMAND: Business markets contain fewer but larger buyers.

Business customers are more geographically concentrated.

Business buyer demand is derived from final consumer demand.

Demand in many business markets is more inelastic.

Demand in business markets fluctuates more, and more quickly.

NATURE OF BUYING UNIT:

Business purchases involve more buyers.

Business buying involves a more professional effort.

TYPES OF DECISIONS AND THE DECISION PROCESS:

Business buyers usually face more complex buying decisions.

Business buying process is more formalized.

In business buying, buyers and sellers work more closely together and build close long-

run relationships.

DERIVED DEMAND

Business demand that ultimately comes from (derives from) the

demand for customer goods.

BUSINESS BUYING SITUATIONS

Straight rebuy : Business buying situation in which the buyer

routinely reorders something without any modifications.

Modified rebuy : Business buying situation in which the buyer

wants to modify product specifications, prices, terms, suppliers.

New task : Business buying situation in which the buyer

purchases a product or service for the first time.

BUSINESS BUYER BEHAVIOR

Buying centre: All the individuals and units that participate in the

business buying- decision process.

PARTICIPANTS IN THE BUSINESS BUYING PROCESS

Users

Influencers

Buyers

Deciders

Gatekeepers

MAJOR INFLUENCES ON BUSINESS BUYER BEHAVIOR

Environmental

Economic developments

Supply conditions

Political and regulatory developments

Competitive developments

Culture and customs

Organizational

Objective

Policies

Procedures

Organizational structure

Systems

Interpersonal

Authority

Status

Empathy

Persuasiveness

Individual

Age

Education

Job position

PersonalityRisk attitudes

Buyers

BUSINESS BUYING PROCESS

Problem recognition : The first stage of business buying process

in which someone in the company recognizes a problem or need

that can be met by acquiring a good or service.

General need description : The stage of the business buying

process in which the company describes the general

characteristics and quality of a needed item.

Product specification : The stage of the business buying process

in which the buying organization decides on and specifies the

best technical product characteristics for a needed item.

BUSINESS BUYING PROCESS

Supplier search : The stage of the business buying process in

which the buyer tries to find the best vendors.

Proposal solicitation : The stage of the business buying process

in which the buyer invites qualified suppliers to submit

proposals.

Supplier selection : The stage of the business buying process in

which the buyer reviews proposals and select a supplier or

suppliers.

BUSINESS BUYING PROCESS

Order-routine specification: The stage of the business buying process in

which the buyer writes the final order with the chosen supplier.

Performance review :The stage of the business buying process in which

the buyer assesses the final performance of the chosen supplier and

decides to continue, modify or drop the arrangement.

STAGES OF THE BUSINESS BUYING BEHAVIOR

Problem recognition General need

description

Product specification

Supplier search

Proposal solicitation

Supplier selection

Order- routine specification

Performance review

BUSINESS BUYER BEHAVIOR

Institutional market : Schools, hospitals, nursing

home, prisons, and other institutions that provides

goods and services to people in their care.

Government market : Governmental units – federal,

state, and local – that purchase or rent goods and

services for carrying out the main functions of

government.

MODEL OF BUSINESS BUYER BEHAVIOR

The Environment

Marketing Other stimuli

Product Economic

Price Technological

Place Political

Promotion Cultural

Competitive

Buyer ResponsesThe Buyer Organization

Product or service choice

Supplier choice

Order quantities

Delivery terms and times

Service terms

Payment

The buying centre

(Interpersonal and Individual influences)

Buying Decision Process

(Organizational Influences)