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Organizational Organizational Buying Behavior & Buying Behavior &
Models of Consumer Models of Consumer BuyingBuying
Shivali Kamal Shivali Kamal
Third semThird sem
Rbs,HyderabadRbs,Hyderabad
Contents in brief:-Contents in brief:-
Consumer Decision-Making, Models of Consumer Behaviour, Types of consumer behaviour models, Industrial buying behaviour Industrial Vs Consumer Market & The process of industrial purchasing .
Consumer Decision-Making Buyer decision processes are the decision making processes undertaken by Buyer decision processes are the decision making processes undertaken by
consumers in regard to a potential market transaction before, during, and consumers in regard to a potential market transaction before, during, and after the purchase of a product or service.after the purchase of a product or service.
A general model (“box-and-arrow” models) consists of :-A general model (“box-and-arrow” models) consists of :-
Models of Consumer Behaviour
Economic model :-It is one-dimensional model. Being rational, one will make his purchase decisions with the intention of maximizing the utility/benefits. Economic model is based on certain predictions as price effect ,substitution effect & income effect.
The sociological model :-The individual buyer is a part of the institution called society. So, he gets influenced by it and in turn also influences it in its path of development.
Learning model :-Classical psychologists have been interested in the formation and satisfaction of needs and tastes .living beings were influenced by both innate needs .A drive or internal stimulus which when directed towards a drive-reducing object becomes a motive.
Psychoanalytical model:-It is based on the work of psychologists who were concerned with personality (outcome of id, super ego & ego). Human needs and motives operated at the conscious as well as subconscious levels. Marketers have been using this approach to generate ideas for developing product-design, features, advertising and other promotional techniques.
Types of models of consumer Types of models of consumer behaviourbehaviour:-:-
A model a is simplified version of reality, it hasA model a is simplified version of reality, it has
never been reality, it isn’t reality and it will never never been reality, it isn’t reality and it will never
be reality...…therefore all models are subject to be reality...…therefore all models are subject to criticism.criticism.
Maslow’sHierarchy of Needs (Conceptual model);Maslow’sHierarchy of Needs (Conceptual model); The Howard Sheth Model of Buying Behaviour;The Howard Sheth Model of Buying Behaviour; Engel, Kollatand Blackwell model.Engel, Kollatand Blackwell model.
Maslow’s Hierarchy of Maslow’s Hierarchy of NeedsNeeds
Psychological needs(food, water, shelter)Psychological needs(food, water, shelter)1
Safety needs(security, protection)
Safety needs(security, protection)
2
Social needs(sense of belonging, love)
Social needs(sense of belonging, love)3
Esteem needs(self-esteem, recognition)
Esteem needs(self-esteem, recognition)
4
Self-actualization
(self-developmentand realization)
Self-actualization
(self-developmentand realization)
5
Engel-Kollat-Blackwell model
The Howard sheth modelThe Howard sheth model
Industrial vs. consumer Industrial vs. consumer marketsmarkets
Buying objective Enable production Personal need satisfaction
Buying motive Mainly rational Also emotional
Purchasing function Professional buying Consumers
Decision making Many persons involved, much discussion
Often impulsive, without consulting others
Characteristics Negotiations, intense interaction
Often without negotiation, little interaction
Product & market knowledge
Large Limited
Order size Often large Mostly small
Demand Derived, fluctuation Autonomous, relatively stable
Price elasticity Rather inelastic Rather elastic
Number of customers Mostly limited Very large
Spread of customers Sometimes large geographic concentration
Large spread
Aspect Industrial market Consumer market
The purchasing processThe purchasing process
- Establish expediting routine
- Expediting
- 'Trouble- shooting'
- Vendor rating- Vendor
- EstablishOrder routine
- Developorderroutines
- Orderhandling
Order
Proc. Role
Elements
Documents
- Prepare contract
- Contractingexpertise
- Negotiatingexpertise
Contract
- Assure adequatesupplier selection
- Prequalification of suppliers
- Request forquotation
Supplier selectionproposal
Get specification
-
FunctionalspecificationTechnicalchanges Bring supplier
knowledge toengineering
-
-
-
-
-
FunctionalspecificationNorm/spec.control
Definespecification
Selectsupplier
Contractagreement
Ordering Expediting EvaluationFollow up
Overdue list
- Vendor performanceevaluation
- Settling contractproblems
evaluation
- Vendor balanced score card- Vendor profile- Vendor ranking
Three types of purchasing situations:-
New task :- • Completely new product from unknown suppliers• High uncertainty regarding outcome• (e.g. acquisition of capital goods)
Modified Rebuy :-
• New product from known supplier• Existing product, new supplier• Moderate uncertainty regarding outcome
Straight rebuy:-• Known product from known supplier• Low uncertainty regarding outcome
Any Questions….?Any Questions….?
Thank u for Your Thank u for Your attentionattention
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