Buyer Behaviour Dr Earl Stevens, October 2009

1. Sales Training

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Buyer Behaviour - Introduction• An important part of the marketing process is to understand why a customer or

buyer makes a purchase. • Without such an understanding, businesses find it hard to respond to the customer’s

needs and wants.

• Marketing theory traditionally splits analysis of buyer or customer behaviour into two broad groups for analysis – Consumer Buyers and Industrial Buyers:

• Consumer buyers are those who purchase items for their personal consumption• Industrial buyers are those who purchase items on behalf of their business or

organisation

• Businesses now spend considerable sums trying to learn about what makes “customers tick”. The questions they try to understand are:

• Who buys?• How do they buy?• When do they buy?• Where do they buy?• Why do they buy?

• Our challenge is to understand how customers might respond to the different elements of the marketing mix that are presented to them.

• If we can understand these customer responses better than the competition, then it is a potentially significant source of competitive advantage.

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Buyer Characteristics Affect Buyer Behaviour

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Buyer Behaviour - Cultural Factors• Cultural factors have a significant impact on

customer behaviour. • Culture is the most basic cause of a person’s

wants and behaviour. Growing up, children learn basic values, perception and wants from the family and other important groups.

• Marketing are always trying to spot “cultural shifts” which might point to new products that might be wanted by customers or to increased demand.

• Each culture contains “sub-cultures” – groups of people with share values.

• Sub-cultures can include nationalities, religions, racial groups, or groups of people sharing the same geographical location. Sometimes a sub-culture will create a substantial and distinctive market segment of its own.

•  Similarly, differences in social class can create customer groups.

• Social class is not just determined by income. It is measured as a combination of occupation, income, education, wealth and other variables:

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Buyer Behaviour - Social Factors• A customer’s buying behaviour is also influenced by social factors, such as the

groups to which the customer belongs and social status.• In a group, several individuals may interact to influence the purchase decision. • The typical roles in such a group decision can be summarised as follows:

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Buyer Decision-making Process

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Buyer Sources of Information

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Buyer Behaviour - five stages in the process of adopting a new product

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Another Model – The Stimulus Response Model

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Marketing Stimuli

Other Stimuli

ProductPricePromotionPlace

PoliticalEconomicSocialTechnological

Buyer Characteristics

Buyer Decision Making Process

Buyer Responses

Product ChoiceBrand ChoiceRetail ChoiceDealer ChoicePurchase TimingPurchase AmountPurchase Frequency

The Process Of New-product Adoption• A marketing team looking to successfully introduce a new product or service should think

about how to help customers move through the five stages.• For example, what kind of advertising or other promotional campaign can be employed to

build customer awareness? If customers show a desire to trial or sample a product, how can this be arranged effectively?

• Research also suggests that customers can be divided into groups according to the speed with which they adopt new products.

• Rogers, in his influential work on the diffusion of innovations, suggested the following classification:

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Some Familiar New Products

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END