Understanding Consumer And Business Buyer Behavior 6j6j13

Chapter 1

Chapter 5

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Understanding Consumer and

Business Buyer Behavior 5-1

Rest Stop: Previewing the Concepts  Describe 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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Case Study Harley-Davidson – Devoted Consumers Building Success

Measuring Success

 Offers good bikes, upgraded

 Currently has 26% of all U.S.

showrooms, and revised sales tactics.  Consumer emotions, motivations, and lifestyle research has been translated into effective advertising.  Harley riders are fiercely loyal to the brand, older, better educated, affluent.

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 

bike sales and 50% of heavyweight segment. Demand outstripped supply for several years; waits of up to 2 years for popular models. Annual revenues/earnings have grown at 14% to 23% over past 10 years. 2007: 21st straight year of record sales and income. 5-3

Consumer Buying Behavior  Consumer buying behavior: ►Refers

to the buying behavior of people who buy goods and services for personal use. ►These people make up the consumer market.

 The central question for marketers is: ►“How

do consumers respond to various marketing efforts the company might use?”

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Model of Buying Behavior

 Marketing mix factors and other

external stimuli are inputs into the “buyer’s black box.” ►Stimuli

are evaluated in light of the buyer decision process and the buyer’s characteristics. ►Buyer responses influence attitudes and choice of the product, brand, vendor, as well as the timing and amount of purchase. Prentice Hall, Copyright 2009

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Consumer Buying Behavior  Factors influencing consumer behavior: ► Cultural

factors:

• Culture, subculture, social class ► Social

factors:

• Reference groups, family, roles, and status ► Personal

factors:

• Age/life-cycle, occupation, economic situation, lifestyle, personality, and self-concept

► Psychological

factors:

• Motivation, perception, learning, beliefs, attitudes Prentice Hall, Copyright 2009

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Culture  Culture is the most basic cause of a person’s wants and behavior. ►Culture

is learned from family, church, school, peers, colleagues. ►Culture reflects basic values, perceptions, wants, and behaviors. ►Cultural shifts create opportunities for new products or may otherwise influence consumer behavior. Prentice Hall, Copyright 2009

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Subculture  Subculture: ►Groups

of people with shared value systems based on common life experiences.

 Major subculture groups: ►Hispanic

consumers ►African-American consumers ►Asian-American consumers ►Mature consumers Prentice Hall, Copyright 2009

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Social Class  Social class: ► Society’s

relatively permanent and ordered divisions whose share similar values, interests, and behaviors.

► Measured

by a combination of occupation, income, education, wealth, and other variables.

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Social Factors  Groups and social networks: ► hip,

reference, and aspirational groups.

• Marketers attempt to reach opinion leaders. ► Online

social networks.

 Family: ► Most

important consumer buying organization.

 Roles and status: ► Role

= Expected activities. ► Status = Esteem given to role by society. Prentice Hall, Copyright 2009

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Personal Factors  Age and life-cycle stage: ► People

change the goods they buy over their lifetimes.

 Occupation: ► Occupation

influences the purchase of clothing and other goods.

 Economic situation: ► Some

goods and services are especially incomesensitive.

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Personal Factors  People within the same subculture, social class, and occupation may have different lifestyles.  Lifestyle: ► Pattern

of living as expressed in psychographics.

• Activities • Interests • Opinions Prentice Hall, Copyright 2009

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Personal Factors  Personality: ►Refers

to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. ►Generally defined in of traits. ►Self-concept theory suggests that people’s possessions contribute to and reflect their identities. Prentice Hall, Copyright 2009

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Psychological Factors  A motive (or drive) is a



need that is sufficiently pressing to direct the person to seek satisfaction. Maslow’s hierarchy of needs explains why people are driven by needs at particular times.

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 Maslow’s hierarchy of

needs implies that lower level needs must be satisfied prior to higher level needs. Physiological needs ► Safety needs ► Social needs ► Esteem needs ► Self-actualization ►

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Psychological Factors  Perception: ►Process

by which people select, organize, and interpret information to form a meaningful picture of the world. ►Perception can be influenced by:

• Selective attention • Selective distortion • Selective retention Prentice Hall, Copyright 2009

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Psychological Factors  Learning: ► Defined

as a relatively permanent change in behavior due to experience. ► Occurs due to an interplay of drives, stimuli, cues, responses, and reinforcement. ► Is strongly influenced by the consequences of an individual’s behavior.

• Behaviors with satisfying results tend to be repeated. • Behaviors with unsatisfying results tend not to be repeated.

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Beliefs and Attitudes  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.

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Buying Decision Process  Need recognition  Information search  Evaluation of alternatives  Purchase decision  Postpurchase behavior

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Need Recognition and Information Search  Need recognition can be triggered by internal or external stimuli.  Several sources of information may used during information search: ►Personal

sources ►Commercial sources ►Public sources ►Experiential sources Prentice Hall, Copyright 2009

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Evaluation of Alternatives and Purchase Decision  Evaluation process is dependent upon the specific buying situation and the individual consumers.  Two factors that may interfere with realization of purchase intentions: ►Attitudes

of others ►Unexpected situational factors Prentice Hall, Copyright 2009

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Post Purchase Behavior  Consumer satisfaction is a function of consumer expectations and perceived product performance. ► Performance

< Expectations ----- Disappointment ► Performance = Expectations ----- Satisfaction ► Performance > Expectations ----- Delight

 Cognitive dissonance: ►A

buyer’s doubts shortly after a purchase about whether it was the right decision.

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Stages in the Adoption Process 1. Awareness: Consumer becomes aware of the 2. 3. 4. 5.

new product, but lacks information about it. Interest: Consumer seeks information about new product. Evaluation: Consumer considers whether trying the new product makes sense. Trial: Consumer tries new product on a small scale to improve his or her estimate of its value. Adoption: Consumer decides to make full and regular use of the new product.

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Adopter Categorization  Individual differences influence the speed with which people will try to new products, yielding five adopter categories: ► Innovators ► Early

adopters ► Early majority ► Late majority ► Laggards Prentice Hall, Copyright 2009

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Product Characteristics That Influence the Rate of Adoption  Relative advantage: ►

Is the innovation superior to existing products?

 Compatibility: ►

Does the innovation fit the values and experience of the target market?

 Complexity: ►

Is the innovation difficult to understand or use?

 Divisibility: ►

Can the innovation be used on a limited basis?

 Communicability: ►

Can results be easily observed or described to others?

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Business Markets and Business Buyer Behavior  The business market is vast and involves far more dollars and items than do consumer markets.  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 or for the purpose of reselling, or renting them to others for a profit.

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Business Markets  Market structure and demand:

► Contains

far fewer but larger buyers. ► Buyers are more geographically concentrated. ► Business demand is derived from consumer demand.

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 Nature of the buying unit: ► Business

purchases involve more decision participants. ► Business buying involves a more professional purchasing effort. 5-26

Business Markets  Key differences exist between business and consumer buying situations: ►Business

buyers usually face more complex buying decisions. ►The business buying process tends to be more formalized. ►Buyers and sellers are much more dependent on each other in business markets.

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Types of Buying Situations  Straight rebuy: ► Buyer

routinely reorders something without any modifications.

 Modified rebuy: ► Buyer

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

 New task: ► Buyer

purchases a product or service for the first

time. ► Systems (solution) selling is becoming more common. Prentice Hall, Copyright 2009

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Participants in the Business Buying Process

 A buying center is all the individuals and units that participate in the business buying-decision process. ►This

is not a fixed or formally identified

unit. ►hip will vary for different products and different tasks.

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Major Influences on Business Buyers

 Environmental factors: ►Economic

environment, shortages, culture and customs.

 Organizational factors  Interpersonal factors  Individual factors Prentice Hall, Copyright 2009

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The Business Buying Process 1. Problem

5. Proposal

recognition 2. General need description 3. Product specification 4. Supplier search

solicitation 6. Supplier selection 7. Order-routine specification 8. Performance review

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e-Procurement  Online purchasing (e-procurement) can be implemented many ways: ►Reverse

auctions ►Trading exchanges ►Company buying sties ►Extranet links with key suppliers

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e-Procurement  Advantages for buyers: ► Access

to new suppliers ► Lowers purchasing costs ► Hastens order processing and delivery

 Advantages for vendors: ► Share

information with customers ► Sell products and services ► Provide customer services ► Maintain ongoing customer relationships Prentice Hall, Copyright 2009

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e-Procurement  Key benefits: ► Reduces

transaction costs to buyers and sellers, and makes for more efficient purchasing. ► Reduces the time between order and delivery. ► Frees purchasing staff to focus on more strategic issues.

 Key problems: ► May

erode long-standing customer relationships. ► May create potential security disasters. Prentice Hall, Copyright 2009

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Rest Stop: Reviewing the Concepts  Describe 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.

Prentice Hall, Copyright 2009

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