Consumer and Business Buyer Behavior

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• Consumer and Business Buyer Behavior

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ROAD MAP Previewing 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.
• Understand the STP process as a heart of
  strategic marketing

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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 Buyer Behavior
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Factors Influencing Consumer Behavior
Cultural Culture Subculture Social Class
Social Reference Groups Family Roles Status
Personal Age Life-Cycle Stage Occupation Economi
c Situation Lifestyle Personality Self-Concept
Psychological Motivation Perception Learning Belie
fs Attitudes
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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 includes basic values,
perceptions, wants, and behaviors. Components of
culture values, language, myths, customs,
rituals, laws, material artifacts
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Culture

• Subculture
• Groups of people with shared value systems based
  on common life experiences.
• Based on
• demographics
• personality, lifestyle, and psychographics
• Examples of Major Groups
• Hispanic Consumers
• African-American Consumers
• Asian-American Consumers
• Mature Consumers

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Marketers and Culture

• must understand the culture of consumers to whom
  they market
• identify subcultures which will be attractive
  target market segments
• link the marketing mix to culture

• INTERNATIONAL MARKETING
• cultural differences and similarities
• key segmentation question
• are cultures different enough to be distinct
  target market segments?

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Marketing to a Subculture
Sears is widely considered one of the most
successful marketers to the U.S. Hispanic
population. Its Spanish-language Web site
features content and events carefully tailored to
Hispanic consumers.
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Culture

• Social Class
• Societys relatively permanent and ordered
  divisions whose members share similar values,
  interests, and behaviors.
• Measured by a combination of occupation, income,
  education, wealth, and other variables.

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Major American Social Classes
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Social Factors

• Membership
• Reference (opinion leaders)
• Aspirational

• Groups

• Most important consumer
• buying organization

• Family

• Role Expected activities
• Status
• Esteem given to role by society

• Roles
• Status

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Opinion Leaders
Marketers use buzz marketing by enlisting or even
creating opinion leaders to spread the word about
their brands.
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Personal Factors
Age and Life-Cycle Stage
Occupation
Economic Situation
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Personal Factors
Lifestyle
Pattern of Living as Expressed in Psychographics
Activities
Interests
Opinions
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Personality Self-Concept

• Personality refers to the unique psychological
  characteristics that lead to relatively
  consistent and lasting responses to ones own
  environment.
• Self-concept suggests that peoples possessions
  contribute to and reflect their identities.

• Workaholism
• Compulsiveness
• Self confidence
• Friendliness
• Adaptability
• Ambitiousness
• Dogmatism
• Authoritarianism
• Introversion
• Extroversion
• Aggressiveness
• Competitiveness

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Maslows Hierarchy of Needs
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Perception

• Perception
• Information Inputs
• Interpretation
• Selective Exposure
• Selective Distortion
• Selective Retention

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Perception

• Information inputs are the sensations received
  through the sense organs.
• Perception is the process of selecting,
  organizing, and interpreting information inputs
  to produce meaning.

• Selective Attention the process of selecting
  some inputs to attend to while ignoring others.
• An input is more likely to reach a persons
  awareness if it relates to an anticipated event.
• Selective distortion is an individuals changing
  or twisting of information when it is
  inconsistent with personal feelings or beliefs.
• Selective retention is remembering information
  that supports personal feelings and beliefs and
  forgetting inputs that do not.

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Learning, Beliefs Attitudes

• Learning a relatively permanent change in
  behavior due to experience.
• Interplay of drives, stimuli, cues, responses,
  and reinforcement.
• Strongly influenced by the consequences of an
  individuals behavior
• Behaviors with satisfying results tend to be
  repeated.
• Behaviors with unsatisfying results tend not to
  be repeated.
• A belief is a descriptive thought that a person
  holds about something.
• Attitude describes a persons consistently
  favorable or unfavorable evaluations, feelings,
  and tendencies toward an object or idea.

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Buying Decision Process
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Buying Decision Process

• Step 1 Need Recognition
• Buyer becomes aware of a difference between a
  desired state and an actual condition.
• Individual may be unaware of the problem or need.
• Marketers may use sales personnel, advertising,
  and packaging to trigger recognition of needs or
  problems.
• Recognition speed can be slow or fast.

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Need Recognition
Need recognition can be triggered by advertising.
This ad from Americas Dairy Farmers alerts
consumers of their need for more dairy products
to build strong bones.
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Buying Decision Process

• Step 2 Information Search
• This stage begins after the consumer becomes
  aware of the problem or need.
• The search for information about products will
  help resolve the problem or satisfy the need.
• There are various sources of information.

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Sources of Information

• - Most effective source
• - Family, friends, neighbors

• Personal

• - Advertising, salespeople
• - Receives the most information
• from these sources

• Commercial

• - Mass Media
• - Consumer-rating groups

• Public

• - Handling the product
• - Examining the product
• - Using the product

• Experiential

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Buying Decision Process
Consumers May Use Careful Calculations Logical
Thinking
Consumers May Buy on Impulse and Rely on Intuition
Consumers May Make Buying Decisions on Their Own
Consumer May Make Decisions After Talking With
Others
Marketers Must Study Buyers to Find Out How They
Evaluate Brand Alternatives
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Buying Decision Process
Factors That Influence Purchase Decision
Unexpected Situational Factors
Attitudes Of Others
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Buying Decision Process
Consumer satisfaction is a function of consumer
expectations and perceived product performance.
Performance lt Expectations
Disappointment
Performance Expectations Satisfaction
Performance gt Expectations Delight
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Buying Decision Process

• Cognitive dissonance a buyers doubts shortly
  after a purchase about whether it was the right
  decision.
• Aftermarketing?

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Consumer Behaviour
During the purchase
After the purchase
Before the purchase
buying behaviour
consumer behaviour
CONSUMER
consumption behaviour
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Business Markets Business Buyer Behavior

• The business market is vast and involves far more
  money 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 that are sold, rented, or
  supplied to others.

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Business Markets

• Nature of the Buying Unit
• Business purchases involve more decision
  participants.
• Business buying involves a more professional
  purchasing effort.

• Market Structure and Demand
• Contains far fewer but larger buyers.
• Customers are more geographically concentrated.
• Business demand is derived from consumer demand.

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Types of Decisions and the Decision Process
Business buyers usually face more complex buying
decisions.
Business buying process tends to be more
formalized.
Buyers and sellers are much more dependent on
each other.
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Business Markets
B2B marketers often roll up their sleeves and
partner with customers to jointly create
solutions. Here, Fujitsu promises, Our
technology will keep you moving upward, and our
people wont let you down.
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Model of Business Buyer Behavior
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Major Types of Buying Situations

• The buyer routinely reorders
• something without any
• modifications.

• Straight Rebuy

• The buyer wants to modify
• product specifications,
• prices, terms, or suppliers.

• Modified Rebuy

• The buyer purchases a
• product or service for the
• first time.

• New Task

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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

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Buying Center
Allegiance Healthcare Corporation deals with a
wide range of buying influences, from purchasing
executives and hospital administrators to the
surgeons who actually use its products.
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Major Influences on Business Buyer Behavior
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The Business Buying Process
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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.

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Segmentation, targeting, positioning
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The process of market segmentation and target
marketing
The disaggregated market
The segmented market
The target market
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3
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2
3
Marketing mix targeted at segment 3
Segment 3 is judged to be most attractive and a
marketing mix strategy is designed for that
target market
The characteristics of individual customers are
understood
Customers are grouped into segments on the basis
of having similar characteristics
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Segmenting consumer markets
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Macro and microsegmentation of organizational
markets
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Segmenting organizational markets
Macrosegmentation
Choice criteria
Organizational size
Industry
Geographic location
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Target marketing strategies

• Undifferentiated marketing
• Differentiated marketing
• Focused marketing
• Customized marketing

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Target marketing strategies

• Undifferentiated marketing

Whole market
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Example of Undifferentiated Strategy Example
ORGANISATION
MARKETING MIX
TARGET MARKET

• Product
• Price
• Promotion
• Distribution

Post Office
Everybody
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Target marketing strategies

• Differentiated marketing

Marketing mix 1
Marketing mix 2
Marketing mix 3
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Example of Differentiated Strategy
Marketing Mix 1
Utilitarian Customer

Marketing Mix 2
Trendy- Casual
LEVIs
Marketing Mix 3
Price shopper
Marketing Mix 4
Mainstream
Tradition- alist
Marketing Mix 5
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Target marketing strategies

• Focused marketing

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Example of Focused Strategy
Independent DIY Shops
Unserved
MARKETING MIX
ORGANISATION

• Product
• Price
• Promotion
• Distribution

Cement Manufacturer
Builders Merchants
Unserved
National DIY Chains
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Target marketing strategies

• Customized marketing

Marketing mix 1
Marketing mix 2
Marketing mix 3
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Example of Customized Strategy
INDIVIDUAL MIXES
ORGANISATION
INDIVIDUAL CUSTOMERS
Marketing Mix 1
Nissan
Industrial Electronic Systems Supplier
Marketing Mix 2
Birdseye
Marketing Mix 3
Heinz
Marketing Mix 4
Levis
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Key tasks in positioning
Where and how we compete
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Identifying Possible Competitive Advantages
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Anheuser-Busch Positioning to Social Class
Segments
Upper-class lifestyle
Aspiring
Upper-middle-class target market (12.5)
Michelob - Upper-middle-class product
position super premium price prestige themes
status/professional backgrounds
Upper-middle- class lifestyle
Contented
Aspiring
Middle-class target market (36)
Budweiser - Middle-class product
position premium price achievement, sharing
themes middle-class backgrounds
Middle-class lifestyle
Contented
Aspiring
Working-class target market (38)
Busch - Working-class product position popular
price sports themes working-class backgrounds
Working-class lifestyle
Contented

• The McGraw-Hill Companies, Inc., 1998

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Keys to successful positioning
Successful positioning