Title: Consumer Markets, Consumer Buying Behavior and Business buyer Behavior
1 Lecture 5
- Consumer Markets, Consumer Buying Behavior and
Business buyer Behavior
2Consumer Buying Behavior
- Consumer Buying Behavior refers to the buying
behavior of final consumers -individuals
households who buy goods and services for
personal consumption. - All these consumers make up the consumer market.
- The central question for marketers is
- How do consumers respond to various marketing
efforts the company might use?
3Model of Buyer Behavior (Fig. 5.1)
Marketing and Other Stimuli Marketing Product Pr
ice Place Promotion Other Economic Technological P
olitical Cultural
Buyers Black Box Buyer Characteristics Buyer
Decision Process
Buyer Responses Product Choice Brand
Choice Dealer Choice Purchase Timing Purchase
Amount
4Factors Influencing Consumer Behavior (Fig. 5.2)
Social Reference groups Family Roles and sta
tus
Personal Age and life-cycle Occupation Economi
c situation Lifestyle Personality and self-conce
pt
Psycho- logical Motivation Perception Learning
Beliefs and attitudes
Buyer
5Value
- American Value
- Achievement success
- Activity involvement
- Efficiency practicality
- Material comfort, individualism, freedom,
humanitarianism, youthfulness and fitness and
health. - Chinese Value?
- Achievement success
- hardworking first comfort later
- do what you should do dont care of others?
-
6Factors Affecting Consumer Behavior Culture
- Culture is the Most Basic Cause of a Person's
Wants and Behavior.
- Subculture
- Group of people with shared value systems based
on common life experiences. - Hispanic Consumers
- African American Consumers
- Asian American Consumers
- Mature Consumers
7Factors Affecting Consumer Behavior Culture
- Culture is the Set of Values, Perceptions, Wants
Behavior Learned by a Member of Society from
Family.
- Social Class
- Societys relatively permanent ordered
divisions whose members share similar values,
interests, and behaviors. - Measured by Occupation, Income, Education,
Wealth and Other Variables.
8Factors Affecting Consumer Behavior Social
- Groups
- Membership
- Reference
- Family (most important)
- Husband, wife, kids
- Influencer, buyer, user
Social Factors
Roles and Status
9Factors Affecting Consumer Behavior Personal
10 SRI Values and Lifestyles (VALS) (Fig. 5.3)
Actualizers
High Resources
High Innovation
Achievers
Fulfilleds
Experiencers
Makers
Strivers
Believers
Strugglers
Low Resources
Low Innovation
11Factors Affecting Consumer Behavior Psychological
Motivation
Psychological Factors Affecting Buyers Choices
Beliefs and Attitudes
Perception
Learning
12Maslows Hierarchy of Needs (Fig. 5.4)
13Types of Buying Decision Behavior (Fig. 5.5)
Complex Buying Behavior
Variety- Seeking Behavior
Habitual Buying Behavior
Dissonance- Reducing Buying Behavior
14Buyer Decision Process (Fig. 5.6)
Purchase Decision
Postpurchase Behavior
Evaluation of Alternatives
Information Search
Need Recognition
15Buyer Decision ProcessStep 1. Need Recognition
Buyer Recognizes a Problem or a Need.
Needs Arising From Internal Stimuli
Hunger External Stimuli- Friends
State Where the Buyers Needs are Fulfilled and
the Buyer is Satisfied.
16The Buyer Decision ProcessStep 2. Information
Search
Personal Sources
Commercial Sources
Public Sources
- Family, friends, neighbors
- Most effective source of
- information
- Advertising, salespeople
- Receives most information from
- these sources
Experiential Sources
- Mass Media
- Consumer-rating groups
- Handling the product
- Examining the product
- Using the product
17The Buyer Decision ProcessStep 4. Evaluation of
Alternatives
Consumer May Use Careful Calculations Logical
Thinking
Consumers May Buy on Impulse and Rely on
Intuition
Consumers May Make Buying Decisions on Their Own.
Consumers May Make Buying Decisions Only After
Consulting Others.
Marketers Must Study Buyers to Find Out How They
Evaluate Brand Alternatives
18The Buyer Decision ProcessStep 5. Purchase
Decision
- Purchase Intention
- Desire to buy the most preferred brand
19The Buyer Decision ProcessStep 6. Postpurchase
Behavior
Satisfied Customer!
- Consumers
- Expectations of Products Performance.
- Products Perceived
- Performance.
Dissatisfied Customer
20 Discussion Connections
- Form small groups to discuss a specific major
purchase that one of you has made recently. - What type of buying decision was it? (slide
12) - Discuss the Buyer Decision Process and what major
factors influenced your decisions.
21Stages in the Adoption Process
Awareness Consumer is aware of product, but
lacks information.
Interest Consumer seeks Information about new
product.
Evaluation Consumer considers trying new product.
22Adopter Categories (Fig. 5.7)
Early Majority
Late Majority
Early Adopters
Innovators
Percentage of Adopters
Laggards
34
34
16
13.5
Time of Adoption
2.5
Late
Early
23Influence of Product Characteristics on Rate of
Adoption
Relative Advantage Is the innovation superior
to existing products?
Communicability Can results be easily observed
or described to others?
Divisibility Can the innovation be used on a
trial basis?
Compatibility Does the innovation fit the
values and experience of the target market?
Complexity Is the innovation difficult
to understand or use?
24Review of Concept Connections
- Define the consumer market and construct a simple
model of consumer buyer behavior. - Name the four major factors that influence
consumer buyer behavior. - List and understand the stages in the buyer
decision process. - Describe the adoption and diffusion process for
new products.
25What is a Business Market?
- A business market comprises 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 goods than do consumer markets.
26Characteristics of Business Markets
Contain fewer, but larger buyers
Customers are more geographically concentrated
Buyer demand is derived from final consumer
demand
Marketing Structure and Demand
27Characteristics of Business Markets
- Nature of the Buying Unit
- Business purchases involve more buyers.
- Business buying involves a more professional
purchasing effort.
28Characteristics of Business Markets
Types of Decisions and the Decision Process
Build Long-Term Partnerships
29Model of Business Buyer Behavior (Fig. 6.1)
Buyer Responses Product or service
choice Supplier Choice Order Quantities Deliver
y terms and times Service terms Payment
- The Environment
- Marketing
- Stimuli
- Product
- Price
- Place
- Promotion
- Other Stimuli
- Economic
- Technological
- Political
- Cultural
- Competitive
The Buying Organization The buying
center Buying decision process (Interpersonal
and individual influences) (Organizational
Influences)
30 Discussion Connections
- Although business markets are similar in many
ways to consumer markets, there are also
significant differences. - What similarities and differences might Office
Depot (www.officedepot.com) encounter in selling
to the business market versus the consumer market
for the following products (a) a personal
computer, (b) a desk chair.
31Major Types of Buying Situations
32Participants in the Business Buying Process
Unexpected Situational Factors
Users
Ethical
Influencers
Decision-Making Unit of a Buying Organization is
Called Its Buying Center.
Buyers
Attitudes of Others
Deciders
Gatekeepers
33Major Influences on Business Buyer Behavior (Fig.
6.2)
Environmental Economic developments Supply
Conditions Technological change Political and
regulatory developments Competitive
Developments Culture and customs
Organizational Objectives Policies Procedures
Organizational Structure Systems
Interpersonal Authority Status Empathy Persuas
iveness
Individual Age Education Job Position Personality
Risk Attitudes
Buyers
34The Business Buying Process
Stage 1. Problem Recognition
Stage 2. General Need Description
Stage 3. Product Specification
Stage 4. Supplier Search
Stage 5. Proposal Solicitation
Stage 6. Supplier Selection
Stage 7. Order-Routine Specification
Stage 8. Performance Review
35Business Buying on the Internet
- Business buyers may purchase electronically by
- Electronic data interchange links (EDI)
- The Internet
- Connecting to customers to
- Share marketing information,
- Sell products services,
- Provide customer support, and
- Maintain on-going relationships.
36Benefits and Problems Created by Buying on the
Internet
- Benefits
- Shave transaction costs
- Reduce time between order and delivery
- Create more efficient purchasing systems
- Forge more intimate relationships
- Level the playing field
- Problems
- Cut purchasing jobs
- Erode supplier-buyer loyalty
- Create potential security disasters
37Institutional and Government Markets
38Review of Concept Connections
- Define the business market and explain how
business markets differ from consumer markets. - Identify the major factors that influence
business buyer behavior. - List and define the steps in the business buying
decision process. - Compare the institutional and government markets
and explain how institutional and government
buyers make their buying decisions.