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99THTH EDITION EDITION

CHAPTER 7CHAPTER 7UNDERSTANDING UNDERSTANDING BUYER BEHAVIORBUYER BEHAVIOR

Manning and Reece

PART IV

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LEARNING OBJECTIVES-1 Discuss the meaning of a customer

strategy

Understand complex nature of consumer and business buyer behavior

Discuss social and psychological influences shaping buying decisions

Discuss power of perception in shaping buyer behavior

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LEARNING OBJECTIVES-2 Distinguish between emotional and rational buying motives

Distinguish between patronage and product buying motives

Explain two commonly accepted theories about how people arrive at buying decision

Describe three ways to discover customer buying motives

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CUSTOMER STRATEGYDEFINED

”A customer strategy is a carefully conceived plan that results in maximum customer responsiveness. One major dimension of this strategy is to achieve a better understanding of the customer’s buying needs and motives.”

Figure 7.1 7-5

STRATEGIC/CONSULTATIVESELLING MODEL

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CONSUMER vs. BUSINESS BUYERS

Consumer buyer behavior Consumer buyer behavior Individuals and households who Individuals and households who buy for personal consumption buy for personal consumption

Business buyer behavior Business buyer behavior Organizations that buy goods and Organizations that buy goods and services used in production of services used in production of other products and services that other products and services that are sold, rented, or supplied to are sold, rented, or supplied to othersothers

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BUYER BEHAVIOR COMPLEXITY

ADOPT ONE-TO-ONE ADOPT ONE-TO-ONE MARKETING STRATEGYMARKETING STRATEGY

CULTIVATE LONG-TERM CULTIVATE LONG-TERM RELATIONSHIP WITH EACH RELATIONSHIP WITH EACH CUSTOMER CUSTOMER

WORKS FOR BOTH RETAIL WORKS FOR BOTH RETAIL AND BUSINESS-TO-AND BUSINESS-TO-BUSINESSBUSINESS

Figure 7.2 7-8

CUSTOMER STRATEGY MODEL

See Figure 7.3. 7-9

CURRENT TRENDS

Consumers moving upscale to Consumers moving upscale to premium, luxury goodspremium, luxury goods

Customer respect central to Customer respect central to success in every market success in every market

Customers from diverse racial, Customers from diverse racial, ethnic, and cultural backgroundsethnic, and cultural backgrounds

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BASIC NEEDS—MASLOW

Physiological Physiological –food, shelter–food, shelter

Security Security –free from danger–free from danger

Social Social ––identification with identification with social groups, friendshipsocial groups, friendship

Esteem Esteem –desire to feel worthy –desire to feel worthy in eyes of othersin eyes of others

Self-Actualization Self-Actualization –need for –need for mastery, self-fulfillmentmastery, self-fulfillment

See Figure 7.4, next slide. 7-11

GROUP INFLUENCES Role Role –expectations associated with –expectations associated with

positionposition Reference Groups Reference Groups –categories of –categories of people you see self belonging topeople you see self belonging to Social Class Social Class –group with similar –group with similar jobs,values, interests, lifestyles jobs,values, interests, lifestyles Culture Culture –influences of group with –influences of group with common language, environment, common language, environment, also sub-cultures also sub-cultures

Figure 7.4 7-12

GROUP INFLUENCES

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DAIMLER/CHRYSLER

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APPLICATION: OVER-GENERALIZING

Remember, prospects act as individuals, not stereotypes “Facts are negotiable. Perception is rock-solid.” Some predict the demise of “demographics” in marketing …How would this impact customer analysis?

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USING JUST DEMOGRAPHICS

21-34-year-old female $40,000+ income college educated owns home

Could yield

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SELECTIVE PROCESSES-SELECTIVE PROCESSES-OVERVIEWOVERVIEW

EXPOSURE

ATTENTION

PERCEPTION

RETENTION

BEHAVIOR

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PERCEPTION: CUSTOMER NEED FORMATION

Selective Attention—We tend to Selective Attention—We tend to screen out certain messages screen out certain messages ……information overload information overload

Buyers conditioned by socio-Buyers conditioned by socio-cultural background and need to cultural background and need to use various selective processes use various selective processes

Salespersons should encourage Salespersons should encourage client client to discuss “perceptions” to discuss “perceptions” of productsof products

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BUYING MOTIVES

A buying motive is an aroused need, A buying motive is an aroused need, drive, or desire that stimulates drive, or desire that stimulates behavior to satisfy the aroused needbehavior to satisfy the aroused need

It’s helpful to discover the “dominant It’s helpful to discover the “dominant buying motive” or buying motive” or DBMDBM

Four basic motive types—emotional, Four basic motive types—emotional, rational, patronage, and productrational, patronage, and product

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EMOTIONAL AND RATIONAL

EMOTIONALEMOTIONAL--Acts due to passion or --Acts due to passion or

sentimentsentiment-- Emotional appeals -- Emotional appeals

commoncommon--Discovery of emotions --Discovery of emotions

involved helps involved helps determine “why” determine “why” customer buyscustomer buys

RATIONALRATIONAL--Acts on reason or --Acts on reason or

judgmentjudgment--Relatively free of --Relatively free of

emotionemotion--Discovery of important --Discovery of important

product, service, product, service, delivery details delivery details critical critical

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PATRONAGE AND PRODUCT MOTIVES

PATRONAGEPATRONAGE--Buy from particular --Buy from particular

firmfirm-- Past experience -- Past experience

positivepositive--Relevant elements: --Relevant elements:

superior service superior service competent sales competent sales staff product staff product selectionselection

PRODUCTPRODUCT--Buyer believes one is --Buyer believes one is

product superior to product superior to othersothers

--Preferences for: --Preferences for: specific brands specific brands quality quality price price design/engineering design/engineering

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BUYER RESOLUTION THEORY

Sometimes called the Sometimes called the 5-Ws5-Ws

– Why should I buy? (need)Why should I buy? (need)– What should I buy? (product)What should I buy? (product)– Where should I buy? (source)Where should I buy? (source)– What is a fair price? (price)What is a fair price? (price)– When should I buy? (time)When should I buy? (time)

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NEED-SATISFACTION THEORY

Beliefs about salesperson’s roleBeliefs about salesperson’s role

– Foundation of consultative sellingFoundation of consultative selling– Effective two-way communicationEffective two-way communication– Systematic inquiry with prospectSystematic inquiry with prospect– Two-way advocacy positionTwo-way advocacy position– Provides “best” solutionProvides “best” solution– Aims to develop long-term Aims to develop long-term

customer relationshipcustomer relationship

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THEORIES COMPARED-NEEDS WINS

Needs approach based on Needs approach based on systematic analysis of buyer systematic analysis of buyer situationsituation

Needs approach works well in all Needs approach works well in all selling situationsselling situations

Customers experience less stress Customers experience less stress with needs approachwith needs approach

See Figure 7.5, next slide. 7-24

BUSINESS-TO-BUSINESS Differs from consumer levelDiffers from consumer level Often a group or committee Often a group or committee decisiondecision Buyer often doesBuyer often does– Purchase requisition or requestPurchase requisition or request– Systematic information search Systematic information search – Evaluates alternativesEvaluates alternatives– Issues purchase orderIssues purchase order– Performs post-buy evaluationPerforms post-buy evaluation

Figure 7.5 7-25

BUSINESS BUYING DECISION STEPS

Last slide Chapter 7. 7-26

ASK ASK QUESTIONSQUESTIONSASK ASK QUESTIONSQUESTIONS

BE A GOOD BE A GOOD LISTENLISTENERERBE A GOOD BE A GOOD LISTENLISTENERER

BE A GOOD BE A GOOD OBSERVEOBSERVERRBE A GOOD BE A GOOD OBSERVEOBSERVERR

DISCOVERING CUSTOMER’S BUYING

MOTIVES