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Chapter Five

Consumer and Business Buyer Behavior

Roadmap:

Previewing the Concepts

1. Understand the consumer market and the

major factors that influence consumer buyer behavior.

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

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

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

Building Success

 _{Offers good bikes,}

upgraded showrooms and sales tactics.

 _{Research has helped to}

understand customers’ emotions and motivation.

 _{Consumer emotions,}

motivations, and lifestyle have been translated into

Harley-Davidson – Devoted

Harley-Davidson – Devoted

Consumers

Consumers

Case Study

Case Study

Measuring Success

 _{Currently has 23% of all}

U.S. bike sales and 50% of heavyweight segment.

 _{Demand above supply with}

waiting lists up to 2 years.

 _{Sales doubled in the past}

six years while earnings have tripled.

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

Model of Buying Behavior

 _{Marketing factors and other stimuli are}

inputs into the “buyer’s black box.”

 _{Here, stimuli are evaluated in light of}

the buyer decision process and the buyer’s characteristics.

 _{Buyer responses influence choice of}

the product, brand, vendor, as well as the timing and amount of purchase.

Culture

 _{Culture is the most basic cause of a}

person's wants and behavior.

– Culture is learned from family, church, school, peers, colleagues.

– _{Culture reflects basic values, perceptions,}

wants, and behaviors.

– Cultural shifts create opportunities for new products or may otherwise influence

Consumer Buying Behavior

 _{Factors influencing consumer behavior:}

– Cultural factors:

• Culture, subculture, social class

– Social factors:

• Reference groups, family, roles and status

– Personal factors:

• Age/life-cycle, occupation, economic situation, lifestyle, personality and self-concept

– Psychological factors:

Culture

 _Subculture

– Groups of people with shared value systems based on common life

experiences.

 _{Major Groups}

– Hispanic Consumers

– African-American Consumers

– Asian-American Consumers

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.

Social Factors

 _Groups:

– Membership, Reference (Opinion Leaders), Aspirational

 _Family:

– Most important consumer buying organization

 _{Roles and Status:}

– Role = Expected activities

Personal Factors

 _{Age and Life-Cycle Stage}

– People change the goods they buy over their lifetimes.

 _Occupation

– Occupation influences the purchase of clothing and other goods.

 _{Economic Situation}

– Some goods and services are especially income-sensitive.

Personal Factors

 _Lifestyle:

– Pattern of living as expressed in psychographics

• _Activities • _Interests • _Opinions

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.

Motives and Needs

 _{Maslow’s hierarchy}

of needs implies that lower level needs must be satisfied prior to higher level needs.

– Physiological needs

– Safety needs

– Social needs

– Esteem needs

 _{A motive (or drive)}

is a need that is

sufficiently pressing to direct the person to seek satisfaction.

 _{Maslow’s hierarchy}

of needs explains why people are

driven by needs at particular times.

Perception

 _{Process by which people select,}

organize, and interpret information to form a meaningful picture of the world.

– _{Selective attention} – Selective distortion

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.

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

Buying Decision Process

 _{Need recognition}  _{Information search}

 _{Evaluation of alternatives}  _{Purchase decision}

Sources of Information

 _Personal

 _Commercial  _Public

Buying Decision Process

 _{Factors that influence purchase}

decision:

– Attitudes of others

Buying Decision Process

 _{Consumer satisfaction is a function of}

consumer expectations and perceived product performance.

– Performance < Expectations --- Disappointment

– Performance = Expectations --- Satisfaction

Buying Decision Process

 _{Cognitive dissonance: a buyer’s}

doubts shortly after a purchase about whether it was the right decision.

Stages in the Adoption

Process

1. Awareness: Consumer becomes aware of the new product, but lacks information about it.

2. Interest: Consumer seeks information about new product.

3. Evaluation: Consumer considers whether trying the new product makes sense.

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

5. Adoption: Consumer decides to make full and regular use of the new product.

Product Adopter Categories

 _Innovators

 _{Early adopters}  _{Early majority}  _{Late majority}  _Laggards

Product Characteristics That

Influence the 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}

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

Business Markets

 _{Market Structure}

and Demand:

– Contains far fewer but larger buyers.

– Buyers are more geographically concentrated.

– Business demand is derived from

consumer demand.

 _{Nature of the Buying}

Unit:

– Business purchases involve more

decision

participants.

– Business buying involves a more professional

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}

Types of Buying Situations

 _{Straight rebuy:}

– Fairly routine purchase decision.

 _{Modified rebuy:}

– Requires some research and modified product specifications, prices, terms, or suppliers.

 _{New task:}

– Requires extensive research and

Participants in the Business

Buying Process

 _{Buying center:}

The

decision-making unit of a

buying organization.

– Not fixed or formally identified unit.

– Membership will vary for different products and buying tasks.

 _{Buying center}

members: – Users – Deciders – Influencers – Buyers – Gatekeepers

 _{Members can play}

Influences on Business Buyer

Behavior

 _{Environmental}  _{Organizational}  _{Interpersonal}  _Individual

The Business Buying Process

1. Problem recognition

2. General need description

3. Product

specification

4. Supplier search

5. Proposal solicitation

6. Supplier selection

7. Order-routine specification

8. Performance review

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}

e-Procurement

 _{Key benefits:}

– Reduces costs to buyers and sellers, and makes for more efficient purchasing.

– _{Reduces the time between order and}

delivery.

– Frees purchasing staff to focus on more strategic issues.

Rest Stop:

Reviewing the Concepts

1. Understand the consumer market and the

major factors that influence consumer buyer behavior.

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

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

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

Copyright 2007, Prentice Ha ll, Inc.

5-30

Participants in the Business

Buying Process

 _{Buying center:}

The

decision-making unit of a

buying organization.

– Not fixed or formally

identified unit.

– Membership will vary

for different products and buying tasks.

 _{Buying center}

members: – Users – Deciders – Influencers – Buyers – Gatekeepers

 _{Members can play}

Copyright 2007, Prentice Ha ll, Inc.

5-31

Influences on Business Buyer

Behavior



_{Environmental}



_{Organizational}



_{Interpersonal}



_Individual

Copyright 2007, Prentice Ha ll, Inc.

5-32

The Business Buying Process

1. Problem recognition

2. General need description

3. Product

specification

4. Supplier search

5. Proposal solicitation

6. Supplier selection

7. Order-routine specification

8. Performance review

Copyright 2007, Prentice Ha ll, Inc.

5-33

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}

Copyright 2007, Prentice Ha ll, Inc.

5-34

e-Procurement



_{Key benefits:}

– Reduces costs to buyers and sellers, and makes for more efficient purchasing.

– _{Reduces the time between order and}

delivery.

– Frees purchasing staff to focus on more strategic issues.

Copyright 2007, Prentice Hall, Inc. 5-35

Rest Stop:

Reviewing the Concepts

1. Understand the consumer market and the

major factors that influence consumer buyer behavior.

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

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

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

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