Consumer and Business Buyer Behavior

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Consumer and Business Buyer Behavior

• Muhammad Imran Wazir

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Model of Consumer Behavior

• Marketing and
• other stimuli Buyers black box
  Buyers responses
• Product Economic
  Product choice
• Price Technological Brand
  choice
• Place Political Dealer
  choice
• Promotion Cultural
  Buying Purchase timing
• Buyer
  decision Purchase amount
• Characteristics process

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Factors Influencing Consumer Behavior
Cultural Culture Subculture Social class
Social Reference groups Family Roles and
Status
Personal Age lifecycle stage Occupation Econo
mic situation Lifestyle Personality and
self-concept
Psychological Motivation Perception Learning Beli
efs attitudes
Buyer
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Cultural Factors

• It exert a broad and deep influence on consumer
  behavior.
• Culture the set of basic values, perceptions,
  wants, and behaviors learned by a member of
  society from family and other important
  institutions.
• Marketers are always trying to spot cultural
  shifts in order to discover new products that
  might be wanted.
• Each culture contains smaller subcultures, or
  groups of people with shared value systems based
  on common life experiences and situations.
• Subcultures includes nationalities, religions,
  racial groups, and geographic regions.

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• Social classes are societys relatively permanent
  and ordered divisions whose members share similar
  values, interests, and behavior.
• Social class is not determined by a single
  factor, such as income, but is measured as a
  combination of occupation, income, education,
  wealth, and other variables.
• In some social systems, member of different
  classes are reared for certain roles and cannot
  change their social positions.
• Marketers are interested in social class because
  people within a given social class tend to
  exhibit similar buying behavior.
• Seven major American social classes Upper
  uppers, Lower uppers, Upper middles, Middle
  class, Working class, Upper lowers, Lower lowers.

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Social Factors

• Group two or more people who interact to
  accomplish individual or mutual goals.
• Membership groups groups that have a direct
  influence and to which a person belongs.
• Reference groups serve as direct (face-to-face)
  or indirect points of comparison or reference in
  forming a persons attitudes or behavior.
• People often are influenced by reference groups
  to which they do not belong. For example, an
  aspirational group is one to which the individual
  wishes to belong.
• Opinion leaders people within a reference
  group, who, because of special skills, knowledge,
  personality, or other characteristics, exert
  influence on others.

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• Family members can strongly influence buyer
  behavior.
• Marketers are interested in the roles and
  influences of the husband, wife, and children on
  the purchase of different products and services.
• Husbandwife involvement varies widely by product
  categories and by stage in the buying process.
• A person belongs to many groupsfamily, clubs,
  organizations. The persons position in each
  group can be defined in terms of both role and
  status.
• A role consists of the activities people are
  expected to perform according to the persons
  around them.
• Each role carries a status reflecting the general
  esteem given to it by society.

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Personal Factors

• Tastes in food, clothes, furniture, and
  recreation are often age related.
• Buying is also shaped by the stage of the family
  life cycle the stages through which families
  might pass as they mature over time.
• Traditional family life-cycle stages include
  young singles and married couples with children.
• Marketers try to identify the occupational groups
  that have an above-average interest in their
  products and services.
• Computer software companies will design different
  products for brand managers, accountants,
  engineers, lawyers and doc.

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• A persons economic situation will effect product
  choice.
• Marketers of income-sensitive goods watch trends
  in personal income, savings, and interest rates.
• People coming from the same subculture, social
  class, and occupation may have quite different
  lifestyles.
• Lifestyle is a persons pattern of living as
  expressed in his or her psychographics.
• It involves measuring consumers major AIO
  dimensions activities (work, hobbies, shopping,
  sports, social events), interests (food, fashion,
  family, recreation), and opinions (about
  themselves, social issues, business, products).

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• Several research firms have developed lifestyle
  classifications. The most widely used is SRI
  Consultings Values and Lifestyles (VALS)
  typology.
• VALS classifies people according to how they
  spend their time and money. It divides consumers
  into eight groups based on two major dimensions
  self-orientation and resources.
• Personality refers to the unique psychological
  characteristics that lead to relatively
  consistent and lasting responses to ones own
  environment.
• Personality is usually described in terms of
  traits such as self-confidence, dominance,
  sociability, autonomy, defensiveness,
  adaptability, and aggressiveness. e.g. coffee
  sociability.
• The basic self-concept premise is that peoples
  possessions contribute to and reflect their
  identities that is, we are what we have.

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Psychological Factors

• A motive (or drive) is a need that is
  sufficiently pressing to direct the person to
  seek satisfaction.
• Sigmund Freud assumed that people are largely
  unconscious about the real psychological forces
  shaping their behavior.
• He saw the person as growing up and repressing
  many urges. These urges are never eliminated or
  under perfect control, they emerge inn dreams, in
  slips of the tongue, in neurotic and obsessive
  behavior, or ultimately in psychoses.
• Thus, Freud suggested that a person does not
  fully understand his or her motivation.

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• Maslows hierarchy of needs

Self- actualization needs Self development and
realization Esteem needs Self-esteem,
recognition, status Social needs Sense of
belonging, love Safety needs Security,
protection Physiological needs Hunger,
thirst
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• A motivated person is ready to act. How the
  person acts is influenced by his or her own
  perception of the situation.
• All of us learn by the flow of information
  through our five senses sight, hearing, smell,
  touch, and taste.
• Perception is the process by which people select,
  organize, and interpret information to form a
  meaningful picture of the world.
• People can form different perceptions of the same
  stimulus because of three perceptual processes
  selective attention, selective distortion, and
  selective retention.
• Selective attention the tendency for people to
  screen out most of the information to which they
  are exposed means that marketers have to work
  especially hard to attract the consumer's
  attention.
• Selective distortion the tendency of people to
  interpret information in a way that will support
  what they already believe.
• Selective retention people tend to retain
  information that supports their attitudes and
  beliefs.

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• Learning describes changes in an individuals
  behavior arising from experience.
• Learning occurs through the interplay of drives,
  stimuli, cue, responses, and reinforcement.
• A drive is strong internal stimulus that calls
  for action. Drive becomes a motive when it is
  directed toward a particular stimulus object.
• Cues are minor stimuli that determine when,
  where, and how the person responds.
• After buying if the experience is rewarding than
  consumer response to the selected good will be
  reinforced.

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• Through doing and learning, people acquire
  beliefs and attitudes.
• A belief is a descriptive thought that a person
  has about something.
• Beliefs may be based on real knowledge, opinion,
  or faith, and may or may not carry an emotional
  charge.
• Marketers are interested in the beliefs that
  people formulate about specific products and
  services, because these beliefs make up product
  and brand images that affect buying behavior.
• Attitude describes a persons relatively
  consistent evaluations, feelings, and tendencies
  toward an object or idea.
• Attitude are difficult to change. A persons
  attitudes fit into a pattern, and to change one
  attitude may require difficult adjustments in
  many others.

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Buyer Decision Process
Need recognition
Information search
Evaluation of alternatives
Purchase decision
Postpurchase behavior
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Need Recognition Information Search

• The need can be triggered by internal stimuli
  when one of the persons normal needs hunger,
  thirst, sex rises to a level high enough to
  become a drive.
• A need can also be triggered by external stimuli.
  e.g. word-of-mouth, advertisements.
• The consumer can obtain information from any of
  several sources. These include personal sources,
  commercial sources, public sources and
  experiential sources.
• Commercial sources normally inform the buyer, but
  personal sources legitimize or evaluate products
  for the buyer.

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Evaluation of Alternatives Purchase Decision

• The consumer arrives at attitudes toward
  different brands through some evaluation
  procedure.
• How consumer go about evaluating purchase
  alternatives depends on the individual consumer
  and the specific buying situation.
• In some cases, consumers use careful calculations
  and logical thinking.
• At other times, the same consumers do little or
  no evaluating instead they buy on impulse and
  rely on intuition.
• Two factors that affects the consumers purchase
  decision.
• Attitudes of others.
• Unexpected situational factors.

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Postpurchase Behavior

• The answer to whether the buyer is satisfied or
  dissatisfied with a purchase lies in the
  relationship between the consumers expectations
  and the products perceived performance.
• Almost all major purchases result in cognitive
  dissonance, or discomfort caused by postpurchase
  conflict.
• Companys sales come from two basic groups new
  customers and retained customers.
• A satisfied customer tell 3 people about a good
  product experience, a dissatisfied customer
  gripes to 11 people.
• Some 96 percent of unhappy customers never tell
  the company about their problem.

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The Buyer Decision Process For New Products

• A good, service 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.
• Consumers go through five stages in the process
  of adopting a new product
• Awareness
• Interest
• Evaluation
• Trial
• Adoption

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Individual Differences in Innovativeness
34 Late majority
34 Early majority
2.5 Innovators
13.5 Early adopters
16 Laggards
X 2a
X a
X
X 2a
Time of adoption of innovation
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Influence of Product Characteristics on Rate of
Adoption

• Five characteristics are especially important in
  influencing an innovations rate of adoption.
• For example, consider the characteristics of HDTV
  (High-definition television) in relation to the
  rate of adoption.
• Relative advantage (superior to existing
  products)
• Compatibility (fits the values and
  experiences of potential customers)
• Complexity (difficult to understand
  or use)
• Divisibility (tried on a limited
  basis but still very expensive)
• Communicability (results of using can be
  observed or described to others)

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Business Markets

• The business market is huge.
• Many sets of business purchases were made for
  only one set of consumer purchases.
• The main differences between business markets and
  consumer markets are following.
• Market structure and demand (derived demand)
• Far fewer but far larger buyers more
  geographically concentrated
• Nature of the buying unit
• More decision participants more professional
  purchasing effort
• Types of decisions and the decision process
• More complex more formalized more dependent.

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Business Buyer Behavior
The Environment The Environment
Marketing Stimuli Other Stimuli
Product Price Place Promotion Economic Technological Political Cultural Competitive
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Major Types of Buying Situation

• Straight rebuy a business buying situation in
  which the buyer routinely reorders something
  without any modifications.
• Modified rebuy a business buying situation in
  which the buyer wants to modify product
  specifications, prices, terms, or suppliers.
• New task a business buying situation in which
  the buyer purchases a product or service for the
  first time.

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Stages of the Business Buying Process
Problem recognition
Supplier search
Product specification
General need description
Proposal solicitation
Supplier selection
Order-routine specification
Performance review