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.

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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.
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Culture

• Subculture
• Groups of people with shared value systems based
  on common life experiences.
• Major Groups
• Hispanic Consumers
• African-American Consumers
• Asian-American Consumers
• Mature Consumers

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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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Jeep

• Shows how a persons lifestyle can help marketers
  understand consumer values and their impact on
  buying behavior.
• Ad targets people who want to leave the
  civilized world behind.
• Click Here to Visit Jeep's Website

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Personality Self-Concept
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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.
• Generally defined in terms of traits.
• Self-concept suggests that peoples possessions
  contribute to and reflect their identities.

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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.

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Perception

• 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.

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Perception

• 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

• 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.

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Beliefs Attitudes

• 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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Interactive Student Assignment

• Choose a partner and talk about some product for
  which each of you has strong attitudes. These
  attitudes can be either positive or negative.
  What led you to have these attitudes toward these
  products?

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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.

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Stages in the Adoption Process

• Awareness Consumer becomes aware of the 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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The Adoption Process
This ad encourages trial by offering a coupon.
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Product Adopter Categories

• When an organization introduces a new product,
  people do not begin the adoption process at the
  same time, nor do they move through it at the
  same speed.
• Adopters are divided into five categories.

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Product Adopter Categories

• Product Adopter Categories

2.5 Innovators
16 Laggards
13.5 Early Adopters
34 Early Majority
34 Late Majority
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Product Adopter Categories

• Group 1 - Innovators
• Innovators are the first adopters of new
  products.
• They are venturesome they try new ideas at some
  risk.

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Product Adopter Categories

• Group 2 Early Adopters
• Early adopters are guided by respect.
• They are opinion leaders in their communities and
  adopt new ideas early but carefully.

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Product Adopter Categories

• Group 3 Early Majority
• Early majority are deliberate.
• Although they rarely are leaders, they adopt new
  ideas before the average person.

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Product Adopter Categories

• Group 4 Late Majority
• Late majority are skeptical.
• They adopt an innovation only after a majority of
  people have tried it.

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Product Adopter Categories

• Group 5 - Laggards
• Laggards are tradition bound.
• They are suspicious of changes and adopt the
  innovation only when it has become something of a
  tradition itself.

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Interactive Student Assignment

• Choose a partner and come up with a list of items
  for which you fit into each of the product
  adopter categories. What is it about you that
  puts you into a different category for each of
  those products?

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Influence of Product Characteristics on 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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New Product Adoption Rate
Some products catch on almost overnight. Others,
such as HDTV, take a long time to gain acceptance.
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Business Markets 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 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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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 support services
• Maintain ongoing customer relationships

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e-Procurement
Public trading exchanges like the auto industrys
Covisint exchange offer a faster, more efficient
way to communicate, collaborate, buy, sell,
trade, and exchange informationbusiness to
business. The exchange handled more than 50
billion in auto-parts orders last year.
Click Here to Visit Covisint's Website
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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.