Consumer and Business Buyer Behavior

1. Consumer and Business Buyer Behavior Chapter 5

2. 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.

3. Road Map: Previewing the Concepts • 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.

4. 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?”

5. 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.

6. 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

7. Culture • Social Class • Society’s 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.

8. Social Factors • Groups: • Membership, Reference (Opinion Leaders) Aspirational • Family: • Most important consumer buying organization • Roles & Status: • Role = Expected activities • Status = Esteem given to role by society

9. Age and Life-Cycle Stage Occupation Economic Situation Personal Factors

10. Personal Factors • Lifestyle: • Pattern of living as expressed in psychographics • Activities • Interests • Opinions

11. Personality & Self-Concept • Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. • Generally defined in terms of traits. • Self-concept suggests that people’s possessions contribute to and reflect their identities.

12. Self-Actualization Esteem needs Social needs Safety needs Physiological needs Maslow’s Hierarchy of Needs

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

14. 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 individual’s behavior • Behaviors with satisfying results tend to be repeated. • Behaviors with unsatisfying results tend not to be repeated.

15. Beliefs & Attitudes • A belief is a descriptive thought that a person holds about something. • An attitude is a person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

16. Buying Decision Process • Need recognition • Information search • Evaluation of alternatives • Purchase decision • Postpurchase behavior

17. Personal Commercial Public Experiential Sources of Information

18. Buying Decision Process • Factors that influence purchase decision: • Attitudes of others • Unexpected situational factors

19. Buying Decision Process • Consumer satisfaction is a function of consumer expectations and perceived product performance. • Performance < Expectations ----- Disappointment • Performance = Expectations ----- Satisfaction • Performance > Expectations ----- Delight

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

21. 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.

22. Product Adopter Categories • Innovators • Early adopters • Early majority • Late majority • Laggards

23. 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?

24. 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.

25. Market Structure and Demand: Contains far fewer but larger buyers. Customers are more geographically concentrated. Business demand is derived from consumer demand. Business Markets • Nature of the Buying Unit: • Business purchases involve more decision participants. • Business buying involves a more professional purchasing effort.

26. 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. Types of Decisions and the Decision Process

27. Types of Buying Situations • Straight rebuy • Modified rebuy • New Task

28. 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. Participants in the Business Buying Process • Buying Center Members: • Users • Deciders • Influencers • Buyers • Gatekeepers

29. Influences on Business Buyer Behavior • Environmental • Organizational • Interpersonal • Individual

30. The Business Buying Process • Problem recognition • General need description • Product specification • Supplier search • Proposal solicitation • Supplier selection • Order-routine specification • Performance review

31. 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

32. 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.

33. Rest Stop: Reviewing the Concepts • 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.