Consumer Behaviour-lec 5

8/9/2019 Consumer Behaviour-lec 5

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Consumer & BusinessBuyer Behaviour

Chapter 5 & 6


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Agenda

Consumer Market and Major Factors that InfluenceConsumer Buying Behavior Consumer Buying Decision Process

Adoption and Diffusion Process for New Products

Business Market and Major Factors that InfluenceBusiness Buyer Behavior Business Buying Decision Process

Term Project and Term Project Proposal

Next Class


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Two Types of Markets

Consumer

Business


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Think about Starbucks

Why are consumers willing to pay $2.00 for a cup ofcoffee?

Who are Starbucks target markets?

What is the marketing

communication message

Starbucks wants to convey?

Why has Starbucksbeen successful?


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Understanding the Consumer Market

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

BuyersBlack

Box

Buyer

Characteristics

BuyingDecision

Process

BuyersResponses

Product choice

Brand choice

Dealer choicePurchase timing

Purchase amount

Marketing and

other stimuli


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Traditional factors affecting

consumer purchasing behaviors

Demographics (age, gender, income, etc.)

Heredity and home environment

Family life cycle

Life changing events

Cultural environment

Social environment

Situational environment

Psychological Factors


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Maslows Hierarchy of Needs

Different types of needs drivebehaviour to satisfy those needs in an

order of precedenceMost basic needs

fulfilled first

Physiological

Self-Actualization

Esteem

Social

Safety


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Think about a specific major purchase

youve made recentlyWhat buying process did you follow?

What major factors influenced your decision?


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Consumer Decision-Making Process

Problem

Recognition

InformationSearch

Evaluation

of

AlternativesPurchase

Decision

Postpurchase

Evaluation


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Information Search

Two ways of gathering information:

1. Internally

2. Externally

Types of info sources: Commercial Public Personal Experiential


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The Purchase Decision

Decision to purchase a particular product may

be based on several factors:Attitudes of Others

Unexpected Situational Factors

What other factors influence the PurchaseDecision?


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Postpurchase Evaluation

Evaluation of product performance

Cognitive dissonance

Impacts future purchases

Impacts word-of-mouth/communication


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Stages in the New Product Adoption

Process

Adoption process:

the mental process through which an individualpasses from first hearing about an innovation tofinal adoption

Consists of 5 Stages (These are exactly asthey indicate): Awareness Interest Evaluation Trial Adoption


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New Product Adoption Rates

Time of adoption of innovations

2.5%Innovators

34%

Earlymajority

34%

LatemajorityEarly

adopters

13.5%

16%Laggards

Source: Free Press, a Division of Simon & Schuster, fromDiffusion of Innovations, Fourth

Edition, by E.M. Rugers, 1983.


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Influences on the Rate of Adoption

Relative advantage How much better than existing alternatives?

Compatibility Fit current values and experiences?

Complexity Ease of understanding?

Divisibility Can it be tried on a limited basis?

Communicability Can the innovation be observed and communicated?


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Two Types of Markets:

Consumer

Business


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BUSINESS BUYING DECISIONS


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Distinguishing Characteristics of

Business Markets

Concentrated Demand Derived Demand

Purchasing Professionals

Multiple Buying Influences

Close Buyer-Seller Relationships


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Business-to-Business Buying

Process

Identification of a need

Establishment of specifications Identification of alternatives

Identification of vendors

Evaluation of vendors Selection of vendors

Negotiation on purchase terms


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Influences on the Business Buying

Organization Buying centre, structure and systems, resources,

goals, environment and policies Individual

Position, age, education, social situation, attitudeabout risk, etc.

Environmental Demand for the product, other external

environmental factors (i.e., regulatory, technology,competition)


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Types of Purchasing Decisions

Straight Rebuy Buying Situation Routine Response Behavior

Modified Rebuy Buying Situation Limited Problem Solving

New Task Buying Situation Extensive Problem Solving


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Characteristics of the

Three Types of Buying Decisions

Newness of Problem or NeedNewness of Problem or Need

Information RequirementsInformation Requirements

Information SearchInformation Search

Consideration of New AlternativesConsideration of New Alternatives

Multiple Buying InfluenceMultiple Buying InfluenceFinancial RisksFinancial Risks

StraightStraight

RebuyRebuy

LowLow

MinimalMinimal

MinimalMinimal

NoneNone

Very SmallVery SmallLowLow

Routineresponse

ModifiedModified

RebuyRebuy

MediumMedium

ModerateModerate

LimitedLimited

LimitedLimited

ModerateModerateModerateModerate

Limitedprob.

solving

NewNew

TaskTask

HighHigh

MaximumMaximum

ExtensiveExtensive

ExtensiveExtensive

LargeLargeHighHigh

Extendedprob

solving


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Multi-Attribute Model

Assessment ofAssessment ofProduct or SupplierProduct or Supplier

Performance (P)Performance (P)

Assessing the RelativeAssessing the RelativeImportance of EachImportance of Each

Characteristic (I)Characteristic (I)

The base scoreThe base score

The weightThe weight


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Example of the Multi-Attribute Model

Process

Vinyl Fabric Nylon Velvet Fabric

Characteristi

c

Performa

nceScore

Importanc

eWeight

PxI Performa

nceScore

Importanc

eWeight

PxI

Comfort 5 9 45 8 9 72

Durability 7 8 56 8 8 64

Guarantee 7 8 56 8 8 64

Price 10 6 60 1 6 6

Evaluation

Score

217 206


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Examples of Buying Motives:

Psychological or Functional?

A girl wants to remember her grandmother

on her birthday.Her primary motive is?

Psychological


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A homemaker needs a new washing

machine and has had good experiences withMetro.

Her primary motive is ?

Functional


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A teacher wants to buy a practical car to be

used for family transportation.Her/His primary motive is ?

Functional


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A career woman always buys J. clothes.

Her primary motive is?

Psychological
http://www.lizclaiborne.com/product/index.jsp?productId=2179527&cp=1986587.1988213&parentPage=family


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An overweight 40 year old man wants toloose weight so that he can reduce his bloodpressure.

His primary motive is?

Functional


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A homeowner needs to mow their lawn.

Their primary motive is?

Functional


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Consumer Buying Behavior

Competency

Functional Motive Psychological Motive

The price is 40 cents offthe regular price

It never needs ironing

Diamonds are forever

Serving you since 1971

Ninety-day warranty


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Consumer Buying Behavior

Competency

Functional Motive Psychological Motive

Running shoe with built-inarch

Its all the ragecolored

action wear and style

Wheatiesthe breakfast of

champions!

Steel-belted radial tires

warranted for 40,000 miles

A watcha gift she will

treasure always


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Thanks

Documents

Consumer Behaviour-lec 5