Todays Discussion

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Todays Discussion

• Consumer buying characteristics and behavior
• Business buying behavior
• Analyzing competition

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Consumer Behavior
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Stimulus/Response Model
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Buyers Characteristics
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Cultural Factors

• Culture
• Subculture
• Social Class - Pg.. 164

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Social Factors

• Reference Group
• Family
• Roles and Status

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Personal Factors

• Age and Stage Pg.. 168
• Occupation and Economics
• Lifestyle
• Personality and Self Concept

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Psychological Factors

• Motivation
• Maslow
• Perception
• Selective Attention,distortion, Retention
• Learning
• Cues
• Beliefs and Attitudes
• Belief s
• Attitudes

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Buyers Decision Making Process
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Stages in the Buying Process

• Problem Recognition
• Buyer recognizes a problem
• difference between current state and desired
  state
• External or internal stimulus
• Information Search
• Heightened attention - Receptive to receiving
  information
• Active information search
• Personal Sources - Friends
• Commercial Sources - Advertising
• Public sources Mass Media, Consumer Reports
• Experiential Sources- test drive

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Stages in the Buying Process Evaluation of
Alternatives

• Stages in the Buying Process - Decisions made on
  a conscious, rational way
• Based on satisfying a need
• Looking for certain benefits in the product
• Views product a bundle of benefits
• Camera- picture sharpness, shutter speeds, price,
  size
• Brand beliefs and brand image
• consumer perception of attributes and what the
  brand stands for
• Cadillac, Land Rover, Porche

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Stages in the Buying Process Purchase Decision
Slide 6.05

• Final decision affected by
• Attitudes of others
• Unanticipated situational factors
• Perceived risk

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Stages in the Buying Process Postpurchase Decision

• Involved with buyers satisfaction
• depends on expectations and perceived performance
  match
• Dont over promise and under deliver

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The Business Market
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Organizational Buying

• the decision making process by which formal
  organizations establish the need for purchased
  products, then identify, evaluate and choose
  among alternative brands and suppliers

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Differences from Consumer Buyers

• Fewer, larger buyers
• Professional buyers
• More Technical
• price oriented
• Educated for the job
• more risk averse

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Factors affecting buyers decisions

• Environmental - level of demand, economic
  outlook, interest rate, technology, political
  environment
• Organizational- Clients objectives, policies,
  org. structure, centralized purchasing,
  diversified companies
• Interpersonal - client interests, authority,
  status,
• Individual - age, income,education, job position,
  attitudes toward risk, culture

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Business buying Process

• Problem recognition, general need description,
  Product specs, supplier search, proposal
  solicitation, supplier selection, performance
  review

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Institutional Market

• Needs for profit are usually absent
• Bidding is favored

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The Market and its Competitors
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A Bewildering Array of Variables outside the four
walls

• The environment - demographics, technology,
  legal, political, natural
• Competitors and Rivals
• Suppliers
• The Industry
• The product
• The customers

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Porters 5 Forces Model

• Relates rivals to each-other and to forces that
  act on the rivals
• customers, new products, suppliers and new
  competitors as a series of threats
• How much power does the suppliers have- Meat
  Packers and Processors
• Ease of entry into the market - Electric Utility
  vs travel agency
• Substitutes- Nutrasweet
• Buyer Power-Boeing vs McDonalds

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Industry Model

• An Industry is a group of firms that produce the
  same products, which are close substitutes for
  each-other.
• Competitors relate to each-other based on size,
  market dominance
• Also on environment
• entry barriers, exit barriers, cost structure,
  globalization

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Market Model

• Group competitors by the need they satisfy
• Beverage Company and a Movie Company satisfy need
  for recreation

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Relationship of Competitors to the environment

• Driving Forces
• Environmental factors that affect all competitors
  
• Aging Population
• Green Movement

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Relationship of Competitors to each-other

• Key Success Factors - Things a company must do
  well in order to compete
• Beverages
• Entertainment
• If a company performs a key success factor better
  than its competitors, it has a competitive
  advantage