Consumer and Business Buyer

Behavior

Chapter 5Chapter 5

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Road Map: Previewing the Concepts

• Understand the consumer market and Understand the consumer market and the major factors that influence the major factors that influence consumer buyer behavior.consumer buyer behavior.

• Identify and discuss the stages in the Identify and discuss the stages in the buyer decision process.buyer decision process.

• Describe the adoption and diffusion Describe the adoption and diffusion process for new products.process for new products.

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• Define the business market and Define the business market and identify the major factors that identify the major factors that influence business buyer behavior.influence business buyer behavior.

• List and define the steps in the List and define the steps in the business buying decision process.business buying decision process.

Road Map: Previewing the Concepts

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Consumer Buying Behavior

• Refers to the buying behavior of Refers to the buying behavior of people who buy goods and people who buy goods and services for personal use.services for personal use.

• These people make up the These people make up the consumer marketconsumer market..

• The central question for marketers The central question for marketers is:is:

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

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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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Social ClassSocial Class

• Society’s relatively permanent and Society’s relatively permanent and ordered divisions whose members ordered divisions whose members share similar values, interests, and share similar values, interests, and behaviors.behaviors.

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

Culture

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Social Factors• Groups:Groups:

Membership, Reference (Opinion Membership, Reference (Opinion Leaders) AspirationalLeaders) Aspirational

• Family:Family: Most important consumer buying Most important consumer buying

organizationorganization

• Roles & Status:Roles & Status: Role = Expected activitiesRole = Expected activities Status = Esteem given to role by Status = Esteem given to role by

societysociety

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Personal Factors

• Age and Life-Cycle StageAge and Life-Cycle Stage

• OccupationOccupation

• Economic SituationEconomic Situation

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Personal Factors

• Lifestyle:Lifestyle: Pattern of living as expressed in Pattern of living as expressed in

psychographicspsychographicsActivitiesActivitiesInterestsInterestsOpinions Opinions

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Personality & Self-Concept

• Personality refers to the unique Personality refers to the unique psychological characteristics that psychological characteristics that lead to relatively consistent and lead to relatively consistent and lasting responses to one’s own lasting responses to one’s own environment.environment.

• Generally defined in terms of traits.Generally defined in terms of traits.

• Self-concept suggests that people’s Self-concept suggests that people’s possessions contribute to and reflect possessions contribute to and reflect their identities.their identities.

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Maslow’s Hierarchy of Needs

• Self-ActualizationSelf-Actualization

• Esteem needsEsteem needs

• Social needsSocial needs

• Safety needsSafety needs

• Physiological needsPhysiological needs

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Perception

Information InputsInformation Inputs InterpretationInterpretation Selective ExposureSelective Exposure Selective DistortionSelective Distortion Selective RetentionSelective Retention

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Learning• A relatively permanent change in A relatively permanent change in

behavior due to experience.behavior due to experience.• Interplay of drives, stimuli, cues, Interplay of drives, stimuli, cues,

responses, and reinforcement.responses, and reinforcement.• Strongly influenced by the Strongly influenced by the

consequences of an individual’s consequences of an individual’s behaviorbehavior Behaviors with satisfying results tend Behaviors with satisfying results tend

to be repeated.to be repeated. Behaviors with unsatisfying results Behaviors with unsatisfying results

tend tend notnot to be repeated. to be repeated.

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Beliefs & Attitudes

• A beliefbelief is a descriptive thought that a person holds about something.

• An attitudeattitude is a person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

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Buying Decision Process

• Need recognitionNeed recognition

• Information searchInformation search

• Evaluation of alternativesEvaluation of alternatives

• Purchase decisionPurchase decision

• Postpurchase behaviorPostpurchase behavior

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Sources of Information

• PersonalPersonal

• CommercialCommercial

• PublicPublic

• Experiential Experiential

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Buying Decision Process

• Factors that influence Factors that influence purchase decision:purchase decision: Attitudes of othersAttitudes of others Unexpected situational factorsUnexpected situational factors

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Buying Decision Process

• Consumer satisfaction is a function of consumer expectations and perceived product performance.

• Performance < Expectations ----- Disappointment

• Performance = Expectations ----- Satisfaction

• Performance > Expectations ----- Delight

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Buying Decision Process

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

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Stages in the Adoption Process

1.1. AwarenessAwareness:: Consumer becomes Consumer becomes aware of the new product, but lacks aware of the new product, but lacks information about it.information about it.

2.2. InterestInterest:: Consumer seeks information Consumer seeks information about new product.about new product.

3.3. EvaluationEvaluation:: Consumer considers Consumer considers whether trying the new product makes whether trying the new product makes sense.sense.

4.4. TrialTrial:: Consumer tries new product on a Consumer tries new product on a small scale to improve his or her small scale to improve his or her estimate of its value.estimate of its value.

5.5. AdoptionAdoption:: Consumer decides to make Consumer decides to make full and regular use of the new product.full and regular use of the new product.

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Product Adopter Categories

• InnovatorsInnovators

• Early adoptersEarly adopters

• Early majorityEarly majority

• Late majorityLate majority

• Laggards Laggards

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Influence of Product Characteristics on Rate of

Adoption• Relative AdvantageRelative Advantage: Is the innovation

superior to existing products?• CompatibilityCompatibility: Does the innovation fit

the values and experience of the target market?

• ComplexityComplexity: Is the innovation difficult to understand or use?

• DivisibilityDivisibility: Can the innovation be used on a limited basis?

• CommunicabilityCommunicability: Can results be easily observed or described to others?

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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• Market Structure Market Structure

and Demand:and Demand: Contains far fewer

but larger buyers. Customers are

more geographically concentrated.

Business demand is derived from consumer demand.

• Nature of the Nature of the Buying Unit:Buying Unit: Business

purchases involve more decision participants.

Business buying involves a more professional purchasing effort.

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Types of Decisions and the Decision Process

• Business buyers usually face more Business buyers usually face more complex buying decisions.complex buying decisions.

• Business buying process tends to be Business buying process tends to be more formalized.more formalized.

• Buyers and sellers are much more Buyers and sellers are much more dependent on each other.dependent on each other.

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Types of Buying Situations

•Straight rebuyStraight rebuy

•Modified rebuyModified rebuy

•New TaskNew 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 Buying Center Center Members:Members: UsersUsers DecidersDeciders InfluencersInfluencers BuyersBuyers GatekeepersGatekeepers

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Influences on Business Buyer Behavior

• EnvironmentalEnvironmental

• OrganizationalOrganizational

• InterpersonalInterpersonal

• IndividualIndividual

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The Business Buying Process

1.1. Problem Problem recognitionrecognition

2.2. General need General need descriptiondescription

3.3. Product Product specificationspecification

4.4. Supplier Supplier searchsearch

5.5. Proposal Proposal solicitationsolicitation

6.6. Supplier Supplier selectionselection

7.7. Order-routine Order-routine specificationspecification

8.8. Performance Performance reviewreview

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e-Procurement• Advantages for buyers:Advantages for buyers:

Access to new suppliersAccess to new suppliers Lowers purchasing costsLowers purchasing costs Hastens order processing and deliveryHastens order processing and delivery

• Advantages for vendors:Advantages for vendors: Share information with customersShare information with customers Sell products and servicesSell products and services Provide customer support servicesProvide customer support services Maintain ongoing customer Maintain ongoing customer

relationshipsrelationships

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Rest Stop: Reviewing the Concepts

1.1. Describe the consumer market Describe the consumer market and the major factors that and the major factors that influence consumer buyer influence consumer buyer behavior.behavior.

2.2. Identify and discuss the stages Identify and discuss the stages in the buyer decision process.in the buyer decision process.

3.3. Describe the adoption and Describe the adoption and diffusion process for new diffusion process for new products.products.

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Rest Stop: Reviewing the Concepts

4.4. Define the business market and Define the business market and identify the major factors that identify the major factors that influence business buyer influence business buyer behavior.behavior.

5.5. List and define the steps in the List and define the steps in the business buying decision business buying decision process.process.