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Consumer and Business Buying Behavior
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Consumer Buying Behavior
Consumer Buying Behavior refers to the buying behavior of final consumers -individuals & households who buy goods and services for personal consumption.
All these consumers make up the consumer market
The central question for marketers is: “How do consumers respond to various
marketing efforts the company might use?”
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Model of Buyer Behavior
Marketing and Other Stimuli
MarketingProductPricePlacePromotionOtherEconomicTechnologicalPoliticalCultural
Buyer’s Black Box
Buyer CharacteristicsBuyer Decision Process
Buyer Responses
Product ChoiceBrand ChoiceDealer Choice
Purchase TimingPurchase Amount
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Factors Influencing Consumer Behavior
Social
Referencegroups
Family
Rolesand
status
Personal
Age andlife-cycle
OccupationEconomicsituationLifestyle
Personalityand
self-concept
Psycho-logical
MotivationPerceptionLearning
Beliefs andattitudes
Buyer
Culture
Sub-culture
Socialclass
Culture
Sub-culture
Socialclass
Cultural
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Factors Affecting Consumer Behavior: Culture
Subculture• Group of people with
shared value systems based on common life experiences.
Culture is the Most Basic Cause of a Person's Wants and Behavior.
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Factors Affecting Consumer Behavior: Culture
Culture is the Set of Values, Perceptions, Wants & Behavior Learned by a Member of
Society from Family. Social Class• Society’s relatively
permanent & ordered divisions whose members share similar values, interests, and behaviors.
• Measured by: Occupation, Income, Education, Wealth and Other Variables.
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Groups• Membership• Reference
Groups• Membership• Reference
Family (most important)• Husband, wife, kids• Influencer, buyer, user
Family (most important)• Husband, wife, kids• Influencer, buyer, user
Roles and StatusRoles and Status
Social FactorsSocial Factors
Factors Affecting Consumer Behavior: Social
Family Buying Influence
Children can exert astrong influence onfamily buying decisions.Johnson & Johnson remindscustomer’s of its commitmentto the American Family.
What other companies usechildren to influencefamily buying decisions?
Click or pre ss spacebar to return
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Personal InfluencesPersonal Influences
Age and Life Cycle Stage
Age and Life Cycle Stage OccupationOccupation Personality &
Self-ConceptPersonality & Self-Concept
Economic Situation
Economic Situation
ActivitiesActivities InterestsInterests
Lifestyle IdentificationLifestyle Identification
OpinionsOpinions
Factors Affecting Consumer Behavior: Personal
Personal factors: Age & life cycle stage – Tastes in food,
clothes, furniture, recreation change with age
Occupation – e.g. purchase of rugged clothes by a laborer
Economic situation Life style – Lifestyle of a celebrity Personality & self-concept
Characteristics affecting consumer behavior
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High Resources High Innovation
AchieversAchievers
ActualizersActualizers
StrugglersStrugglers
StriversStrivers
FulfilledsFulfilleds
BelieversBelievers
ExperiencersExperiencers
MakersMakers
SRI Values and Lifestyles (VALS)
Low Resources Low Innovation
Brand personality traits
Sincerity (down – earth, honest, cheerful) - e.g. Hallmark
Excitement (daring, spirited, imaginative) - e.g. MTV
Competence (reliable, intelligent & successful) – e.g. Hewlett-Packard
Sophistication (upper class & charming) - e.g. BMW
Ruggednes (outdoorsy & tough) - e.g. Levis
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Factors Affecting Consumer Behavior: Psychological
PsychologicalFactors
AffectingBuyers Choices
Motivation
Perception
Learning
Beliefs andAttitudes
Motives in buying
There are complex motives behind purchasing decisions:
Often the underlying motive is different from the stated motive.
Why do people buy Rolex watches?- For accurate time keeping?- OR as a status symbol? Motives can be analyzed using
Maslow’s hierarchy
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Physiological Needs(hunger, thirst)
Safety Needs(security, protection)
Social Needs (sense of belonging,
love)
Esteem Needs (self-esteem)
Self Actualization
(Self-development)
Maslow’s Hierarchy of Needs
Maslow’s hierarchy of needs
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HighInvolvement
Significantdifferences
betweenbrands
Fewdifferences
betweenbrands
LowInvolvement
Types of Buying Decision Behavior
ComplexBuying
Behavior
Variety-SeekingBehavior
Dissonance-Reducing Buying
Behavior
HabitualBuying
Behavior
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Buyer Decision Process
PostpurchaseBehavior
Purchase
Decision
Information
SearchNeed
Recognition
Evaluationof
Alternatives
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Buyer Decision ProcessStep 1. Need Recognition
State Where the Buyer’s Needs are Fulfilled and the Buyer is Satisfied.
Needs Arising From:
Internal Stimuli –
Hunger
External Stimuli-
Friends
Buyer Recognizes
a Problem
or a Need.
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•Family, friends, neighbors•Most effective source of information
•Advertising, salespeople•Receives most information from these sources
•Mass Media•Consumer-rating groups
•Handling the product•Examining the product•Using the product
Personal Sources Personal Sources
Commercial SourcesCommercial Sources
Public SourcesPublic Sources
Experiential SourcesExperiential Sources
The Buyer Decision ProcessStep 2. Information Search
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Consumer May Use Careful Calculations & Logical Thinking
Consumers May Buy on Impulse and Rely on Intuition
Consumers May Make Buying Decisionson Their Own.
Consumers May Make Buying DecisionsOnly After Consulting Others.
Marketers Must Study Buyers to Find Out How They Evaluate Brand
Alternatives
The Buyer Decision ProcessStep 3. Evaluation of Alternatives
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Purchase IntentionDesire to buy the most preferred brand
Purchase Decision
Unexpected
Situational Factors
Attitudes of Others
The Buyer Decision ProcessStep 4. Purchase Decision
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The Buyer Decision ProcessStep 5. Postpurchase Behavior
Consumer’s Expectations of Product’s Performance.
Product’s Perceived Performance.
Dissatisfied Customer
Satisfied Customer!
Cognit
ive D
isso
nan
ce
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Awareness: Consumer is aware of
product, but lacks information.
Interest: Consumer seeks Information about new product.
Evaluation: Consumer considerstrying new product.
Trial: Consumer tries new product on a small scale.
Adoption: Consumer decides to make regular use of product.
Stages in the Adoption Process
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Adopter CategoriesP
erc
en
tag
e o
f A
dop
ters
Time of AdoptionEarly Late
Inn
ovato
rs
Early Adopters
Early Majority
2.5%
13.5%
34% 34%
16%
Laggards
Late Majority
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DivisibilityCan the innovation
be used on a trial basis?
ComplexityIs the innovation
difficult tounderstand or use?
Communicability Can results be easily
observed or described to others?
CompatibilityDoes the innovation
fit the values and experience of the
target market?
Relative AdvantageIs the innovation
superior to existing products?
Influence of Product Characteristics on Rate of Adoption
Business Buying Behavior Business market : organizations that buy
goods and services for use in the production of other products and services that are sold rented, or supplied to others
Business buying process: the decision making process by which business buyers establish the need for purchased products and services and identify, evaluate and choose among alternative brands and suppliers
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Characteristics of business markets
Characters Characteristics of business markets
Marketing structure and demand
•Business markets contain fewer but larger buyers •Business customers are more geographically concentrated •Business buyer demand is derived from final consumer demand •Demand is more inelastic
Nature of the buying unit
•Business purchases involve more buyers •Business buying involves a more professional effort
Types of decisions and decision process
•Business buyers usually face more complex buying decision •The business buying process is more formalized •Buyers and sellers work more closely together and work on long run relationships
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The Environment Marketing stimuli
Other stimuli
Product Price PlacePromotion
PETCultural Competitive
The buying organization
Buyer Response
The Buying Center
Buying Decision Process
Organizational influences
Product /service choice
Supplier
Order quantities
Delivery times
Service terms
Payment
Model of business buyer behavior
Major types of buying situations
Types Explanation
Straight rebuy Buyer routinely reorders something without modifications
Modified rebuy Buyer wants to modify product specifications (price, terms)
New task Buyer purchases a product or service for the first time
Systems buying Buying a packaged solution to a problem from a single seller
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Participants in the Business buying process
Participants
Buying center The decision making unit of a buying organization
Users Members of org who will use the product/services
Influencers Technical personnel are important influencers , define specifications
Deciders Have formal/informal power to select or approve the final supplier
Gatekeepers Control the flow of information to others , technical persons, secretary, purchasing agents
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Major influences on business buyers
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OrganizationalEnvironmental
Interpersonal
Buyers
Individual Economic Developments
Supply conditions
Technological change
Competitive developments
Culture
Objectives
Policies
Procedures
Organizational structure
Systems
Authority
Status
Empathy
Persuasiveness
Age Education Job responsibility Personality Risk Attitudes
The business buying process Problem Recognition
Someone in the company finds a problem that can be met by acquiring a good/service
General need description
Stage in which company describes general characteristics and quantity of a needed item
Product specifications
Stage of BP, buying org decides or specifies best technical product characteristics for a needed item
Supplier search Buyer tries to find the best vendor
Proposal solicitations
Buyers invite qualified suppliers to submit proposal
Supplier selection Buyer review proposal and select a supplier or suppliers
Order routine specifications
Final order , listing the technical specifications (quantity, delivery, expected time, return policies, and warranties
Performance review
Buyer rates its satisfaction with suppliers (continue, modify and drop)
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