Consumer and Business Buyer Behavior 5. 5-2 ROAD MAP: Previewing the Concepts Understand the...

Consumer and Business Consumer and Business Buyer BehaviorBuyer Behavior

5

5-2

ROAD MAP: Previewing the Concepts

• Understand the consumer market and the Understand the consumer market and the major factors that influence consumer major factors that influence consumer buyer behavior.buyer behavior.

• Identify and discuss the stages in the buyer Identify and discuss the stages in the buyer decision process.decision process.

• Describe the adoption and diffusion process Describe the adoption and diffusion process for new products.for new products.

• Define the business market and identify the Define the business market and identify the major factors that influence business buyer major factors that influence business buyer behavior.behavior.

• List and define the steps in the business List and define the steps in the business buying decision process.buying decision process.

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Consumer Buying Behavior

• Refers to the buying behavior of Refers to the buying behavior of people who buy goods and services people who buy goods and services for personal use.for personal use.

• These people make up the These people make up the consumer marketconsumer market..

• The central question for marketers is:The central question for marketers is:– ““How do consumers respond to various How do consumers respond to various

marketing efforts the company might marketing efforts the company might use?”use?”

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Model of Buyer Behavior

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Factors Influencing Consumer Behavior

Cultural

Culture

Subculture

Social Class

Cultural

Culture

Subculture

Social Class

Social

Reference Groups

Family

Roles & Status

Social

Reference Groups

Family

Roles & Status

Personal

Age & Life-Cycle Stage

Occupation

Economic Situation

Lifestyle

Personality & Self-Concept

Personal

Age & Life-Cycle Stage

Occupation

Economic Situation

Lifestyle


Psychological

Motivation

Perception

Learning

Beliefs & Attitudes

Psychological

Motivation

Perception

Learning

Beliefs & Attitudes

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Culture

Culture is the Most Basic Cause of a Person's Wants and Behavior.

Culture is learned from family, church, school, peers, colleagues.

Culture includes basic values, perceptions, wants, and behaviors.

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Culture

Subculture• Groups of people with

shared value systems based on common life experiences.

Major Groups

• Hispanic Consumers

• African-American Consumers

• Asian-American Consumers

• Mature Consumers

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Marketing to a Subculture

Sears is widely considered one of the most successful marketers to the U.S. Hispanic population. Its Spanish-language Web site features content and events carefully tailored to Hispanic consumers.

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Culture

Social ClassSocial Class

• Society’s relatively Society’s relatively permanent and ordered permanent and ordered divisions whose divisions whose members share similar members share similar values, interests, and values, interests, and behaviors.behaviors.

• Measured by a Measured by a combination of: combination of: occupation, income, occupation, income, education, wealth, and education, wealth, and other variables.other variables.

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Major American

Social Classes

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Social Factors

Membership Reference (opinion leaders)

Aspirational Groups

Family

Roles & Status

Most important consumer buying organization

Role =Expected activities Status =

Esteem given to role by society

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Opinion Leaders

Marketers use buzz marketing by enlisting or even creating opinion leaders to spread the word about their brands.

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Personal Factors

Age and Life-Cycle Stage

Occupation

Economic Situation

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Personal Factors

ActivitiesActivities InterestsInterests

LifestyleLifestyle

OpinionsOpinions

Pattern of Living as Expressedin Psychographics

Pattern of Living as Expressedin Psychographics

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• Shows how a person’s Shows how a person’s lifestyle can help lifestyle can help marketers marketers understand consumer understand consumer values and their values and their impact on buying impact on buying behavior. behavior.

• Ad targets people Ad targets people who want to “leave who want to “leave the civilized world the civilized world behind.”behind.”

• Click Here to Visit Jeep's Website

Jeep

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• Personality refers to the unique Personality refers to the unique psychological characteristics that psychological characteristics that lead to relatively consistent and lead to relatively consistent and lasting responses to one’s own lasting responses to one’s own environment.environment.

• Generally defined in terms of traits.Generally defined in terms of traits.

• Self-concept suggests that people’s Self-concept suggests that people’s possessions contribute to and reflect possessions contribute to and reflect their identities.their identities.

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Maslow’s Hierarchy of Needs

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Perception

• PerceptionPerception– Information InputsInformation Inputs– InterpretationInterpretation– Selective ExposureSelective Exposure– Selective Selective

DistortionDistortion– Selective RetentionSelective Retention

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•Information inputsInformation inputs are the are the sensations received through sensations received through the sense organs.the sense organs.

•PerceptionPerception is the process of is the process of selecting, organizing, and selecting, organizing, and interpreting information inputs interpreting information inputs to produce meaning.to produce meaning.

Perception

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• Selective Attention:Selective Attention: the process the process of selecting some inputs to attend of selecting some inputs to attend to while ignoring others.to while ignoring others.

• An input is more likely to reach a An input is more likely to reach a person’s awareness if it relates to person’s awareness if it relates to an anticipated event.an anticipated event.

Perception

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• Selective distortionSelective distortion is an is an individual’s changing or twisting of individual’s changing or twisting of information when it is inconsistent information when it is inconsistent with personal feelings or beliefs.with personal feelings or beliefs.

• Selective retentionSelective retention is is remembering information that remembering information that supports personal feelings and supports personal feelings and beliefs and forgetting inputs that beliefs and forgetting inputs that do not.do not.

Perception

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Learning

• Learning:Learning: a relatively permanent a relatively permanent change in behavior due to experience.change in behavior due to experience.

• Interplay of drives, stimuli, cues, Interplay of drives, stimuli, cues, responses, and reinforcement.responses, and reinforcement.

• Strongly influenced by the Strongly influenced by the consequences of an individual’s consequences of an individual’s behaviorbehavior– Behaviors with satisfying results tend to Behaviors with satisfying results tend to

be repeated.be repeated.– Behaviors with unsatisfying results tend Behaviors with unsatisfying results tend

notnot to be repeated. to be repeated.

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Beliefs & Attitudes

•A beliefbelief is a descriptive thought that a person holds about something.

• AttitudeAttitude describes a person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

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Buying Decision Process

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Step #1 = Need RecognitionStep #1 = Need Recognition• Buyer becomes aware of a difference Buyer becomes aware of a difference

between a desired state and an between a desired state and an actual condition.actual condition.

• Individual may be unaware of the Individual may be unaware of the problem or need.problem or need.

• Marketers may use sales personnel, Marketers may use sales personnel, advertising, and packaging to trigger advertising, and packaging to trigger recognition of needs or problems.recognition of needs or problems.

• Recognition speed can be slow or Recognition speed can be slow or fast.fast.


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Need Recognition

Need recognition can be triggered by advertising. This ad from America’s Dairy Farmers alerts consumers of their need for more dairy products to build strong bones.

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Step #2 = Information SearchStep #2 = Information Search

• This stage begins after the This stage begins after the consumer becomes aware of the consumer becomes aware of the problem or need.problem or need.

• The search for information about The search for information about products will help resolve the products will help resolve the problem or satisfy the need.problem or satisfy the need.

• There are various sources of There are various sources of information.information.


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Sources of Information - Most effective source - Family, friends, neighbors

Personal

Commercial

Public

- Advertising, salespeople - Receives the most information from these sources

- Mass Media - Consumer-rating groups

Experiential - Handling the product - Examining the product - Using the product

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Consumers May Use Careful Calculations & Logical Thinking

Consumers May Buy on Impulse and Rely on Intuition

Consumers May Make Buying Decisions on Their Own

Consumer May Make Decisions After Talking With Others

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Factors That Influence Purchase Decision

AttitudesOf

Others

UnexpectedSituational

Factors

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Consumer satisfaction is a function of consumer expectations and perceived product performance.

Performance < Expectations Disappointment

Performance = Expectations Satisfaction

Performance > Expectations Delight

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• Cognitive dissonance:Cognitive dissonance: a buyer’s a buyer’s doubts shortly after a purchase about doubts shortly after a purchase about whether it was the right decision.whether it was the right decision.


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Stages in the Adoption Process

1.1.AwarenessAwareness:: Consumer becomes aware of Consumer becomes aware of the new product, but lacks information about it.the new product, but lacks information about it.

2.2.InterestInterest:: Consumer seeks information about Consumer seeks information about new product.new product.

3.3.EvaluationEvaluation:: Consumer considers whether Consumer considers whether trying the new product makes sense.trying the new product makes sense.

4.4.TrialTrial:: Consumer tries new product on a small Consumer tries new product on a small scale to improve his or her estimate of its scale to improve his or her estimate of its value.value.

5.5.AdoptionAdoption:: Consumer decides to make full Consumer decides to make full and regular use of the new product.and regular use of the new product.

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The Adoption Process

This ad encourages trial by offering a coupon.

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Product Adopter Categories

• When an organization introduces a When an organization introduces a new product, people do not begin the new product, people do not begin the adoption process at the same time, adoption process at the same time, nor do they move through it at the nor do they move through it at the same speed. same speed.

• AdoptersAdopters are divided into five are divided into five categories.categories.

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2.5% Innovators

13.5% Early Adopters

34% Early Majority34% Late Majority

16% Laggards

• Product Adopter Categories


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Group #1 - InnovatorsGroup #1 - Innovators

• InnovatorsInnovators are the first adopters of are the first adopters of new products. new products.

• They are venturesome They are venturesome – they try new – they try new ideas at some risk.ideas at some risk.

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Group #2 – Early AdoptersGroup #2 – Early Adopters

• Early adoptersEarly adopters are guided by are guided by respect. respect.

• They are opinion leaders in their They are opinion leaders in their communities and adopt new ideas communities and adopt new ideas early but carefully.early but carefully.

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Group #3 – Early MajorityGroup #3 – Early Majority

• Early majorityEarly majority are deliberate. are deliberate.

• Although they rarely are leaders, Although they rarely are leaders, they adopt new ideas before the they adopt new ideas before the average person.average person.

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Group #4 – Late MajorityGroup #4 – Late Majority

• Late majorityLate majority are skeptical. are skeptical.

• They adopt an innovation only after a They adopt an innovation only after a majority of people have tried it.majority of people have tried it.

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Group #5 - LaggardsGroup #5 - Laggards

• LaggardsLaggards are tradition bound. are tradition bound.

• They are suspicious of changes and They are suspicious of changes and adopt the innovation only when it adopt the innovation only when it has become something of a tradition has become something of a tradition itself.itself.

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Influence of Product Characteristics on Rate of Adoption

• Relative AdvantageRelative Advantage: Is the innovation superior to existing products?

• CompatibilityCompatibility: Does the innovation fit the values and experience of the target market?

• ComplexityComplexity: Is the innovation difficult to understand or use?

• DivisibilityDivisibility: Can the innovation be used on a limited basis?

• CommunicabilityCommunicability: Can results be easily observed or described to others?

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New Product Adoption Rate

Some products catch on almost overnight. Others, such as HDTV, take a long time to gain acceptance.

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Business Markets &Business Buyer Behavior

• The business market is vast and involves far more dollars and items than do consumer markets.

• Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others.

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Business Markets

• Market Structure Market Structure and Demand:and Demand:– Contains far fewer

but larger buyers.– Customers are

more geographically concentrated.

– Business demand is derived from consumer demand.

• Nature of the Nature of the Buying Unit:Buying Unit:– Business

purchases involve more decision participants.

– Business buying involves a more professional purchasing effort.

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Types of Decisions and the Decision Process

Business buyers usually facemore complex buying decisions.

Business buying processtends to be more formalized.

Buyers and sellers are muchmore dependent on each other.

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Business Markets

B2B marketers often roll up their sleeves and partner with customers to jointly create solutions. Here, Fujitsu promises, “Our technology will keep you moving upward, and our people won’t let you down.”

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Model of Business Buyer Behavior

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Major Types of Buying Situations

The buyer routinely reorders something without any

modifications. Straight Rebuy

Modified Rebuy

New Task

The buyer wants to modify product specifications,

prices, terms, or suppliers.

The buyer purchases a product or service for the

first time.

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Participants in the Business Buying Process

• Decision-making unit of a buying organization is called its buying center.

• Not a fixed and formally identified unit.

• Membership will vary for different products and buying situations.

• Buying Center Buying Center Members:Members:– UsersUsers– DecidersDeciders– InfluencersInfluencers– BuyersBuyers– GatekeepersGatekeepers

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Buying Center

Allegiance Healthcare Corporation deals with a wide range of buying influences, from purchasing executives and hospital administrators to the surgeons who actually use its products.

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Major Influences on Business Buyer Behavior

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The Business Buying Process

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e-Procurement

• Advantages for buyers:Advantages for buyers:– Access to new suppliersAccess to new suppliers– Lowers purchasing costsLowers purchasing costs– Hastens order processing and deliveryHastens order processing and delivery

• Advantages for vendors:Advantages for vendors:– Share information with customersShare information with customers– Sell products and servicesSell products and services– Provide customer support servicesProvide customer support services– Maintain ongoing customer relationshipsMaintain ongoing customer relationships

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e-Procurement

Public trading exchanges like the auto industry’s Covisint exchange offer a “faster, more efficient way to communicate, collaborate, buy, sell, trade, and exchange information—business to business.” The exchange handled more than $50 billion in auto-parts orders last year.

Click Here to Visit Covisint's Website

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Rest Stop: Reviewing the Concepts

1.1. Describe the consumer market and the major Describe the consumer market and the major factors that influence consumer buyer factors that influence consumer buyer behavior.behavior.

2.2. Identify and discuss the stages in the buyer Identify and discuss the stages in the buyer decision process.decision process.

3.3. Describe the adoption and diffusion process Describe the adoption and diffusion process for new products.for new products.

4.4. Define the business market and identify the Define the business market and identify the major factors that influence business buyer major factors that influence business buyer behavior.behavior.

5.5. List and define the steps in the business List and define the steps in the business buying decision process.buying decision process.

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Q: The debate about subliminal advertising's effectiveness still continues. Do you think subliminal advertising can influence consumer behavior?

1. Yes1. Yes

2. No2. No

AK, 7e – Chapter 5

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Q: Because you make $95,000 per year, you decide to purchase a Lexus sedan, while your cousin, who makes $35,000 per year, buys a Ford Escort. Your respective decisions were influenced by

your:

1. perceptions. 1. perceptions.

2. aspirational group. 2. aspirational group.

3. incomes. 3. incomes.

4. attitudes.4. attitudes.


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Q: The most basic cause of a person's wants and behavior is:

1. culture. 1. culture.

2. social status. 2. social status.

3. economic well-being. 3. economic well-being.

4. ethnic background.4. ethnic background.


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Q: People who, because of special skills, knowledge, or personality, exert influence over others are called:

1. market mavens. 1. market mavens.

2. opinion leaders. 2. opinion leaders.

3. change agents. 3. change agents.

4. gatekeepers.4. gatekeepers.


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Q: The tendency of people to interpret information in a way that will support what they already believe is called:

1. selective perception. 1. selective perception.

2. selective distortion. 2. selective distortion.

3. selective retention. 3. selective retention.

4. selective belief.4. selective belief.


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Q: When consumers aren’t intensely involved in the purchase, but perceive significant differences among brands, they engage in:

1. variety-seeking behavior. 1. variety-seeking behavior.

2. complex buying behavior. 2. complex buying behavior.

3. habitual buying behavior. 3. habitual buying behavior.

4. dissonance-reducing buying 4. dissonance-reducing buying behavior.behavior.


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Q: Whenever you go to the grocery store to buy flour, you generally grab the first bag you see. You are engaging in what sort of buying behavior?

1. complex 1. complex

2. habitual 2. habitual

3. variety-seeking 3. variety-seeking

4. dissonance-reducing4. dissonance-reducing


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Q: A marketer who wants to win consumers like you over to her firm’s brand of flour should:

1. run many short, repetitive TV 1. run many short, repetitive TV messages. messages.

2. run a big insert ad in a 2. run a big insert ad in a magazine. magazine.

3. run ads that list the many 3. run ads that list the many benefits of your product. benefits of your product.

4. all of the above.4. all of the above.


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Q: After certain types of sales, marketers often send consumers communications to help them feel good about their purchases. Marketers do so in order to facilitate:

1. variety-seeking behavior. 1. variety-seeking behavior.

2. complex buying behavior. 2. complex buying behavior.

3. habitual buying behavior. 3. habitual buying behavior.

4. dissonance-reducing buying 4. dissonance-reducing buying behavior.behavior.


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Q: While looking at different types of stereo speakers in an electronics store, a salesperson invites you to listen to several models. This person is providing you with what source of product

information?

1. commercial 1. commercial

2. word-of-mouth 2. word-of-mouth

3. public 3. public

4. experiential4. experiential


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Q: Whether a consumer will be satisfied with a purchase is a function of:

1. consumer's expectations. 1. consumer's expectations.

2. perceived performance of the 2. perceived performance of the product. product.

3. both consumer's expectations 3. both consumer's expectations and the perceived and the perceived performance of the product. performance of the product.

4. none of the above.4. none of the above.


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Q: On average, a satisfied consumer tells ____ people about a good product experience and a dissatisfied consumer gripes to ____ people.

1. 10, 5 1. 10, 5

2. 3, 11 2. 3, 11

3. 11, 3 3. 11, 3

4. 5, 104. 5, 10


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Q: The _________________ is the mental process through which an individual passes from first hearing about an innovation to final adoption.

1. adoption process 1. adoption process

2. diffusion process 2. diffusion process

3. innovation process 3. innovation process

4. new product development 4. new product development processprocess


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Q: While shopping for new stereo speakers, you're most impressed by a brand new speaker model about which you've read only some preliminary buzz in electronics magazines. You buy these speakers, confident in your decision,

making you this kind of consumer.

1. an early-adopter member 1. an early-adopter member

2. an innovator 2. an innovator

3. a laggard 3. a laggard

4. a late-majority member4. a late-majority member


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Q: Another reason you selected the speaker to purchase so quickly is because you feel speakers are technologically fairly straightforward products. These speakers pass the product-adoption test

of:

1. divisibility. 1. divisibility.

2. relative advantage. 2. relative advantage.

3. complexity. 3. complexity.

4. communicability.4. communicability.


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Q: All of the following are stages in the adoption process for a new product except:

1. awareness. 1. awareness.

2. cognitive dissonance. 2. cognitive dissonance.

3. interest. 3. interest.

4. evaluation.4. evaluation.


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Q: Business buyer demand is derived from _____.

1. cultural factors 1. cultural factors

2. technological factors 2. technological factors

3. business demand 3. business demand

4. consumer demand4. consumer demand


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Q: Which of the following does not characterize business market decisions?

1. more complex buying 1. more complex buying decisions decisions

2. more formalized processes 2. more formalized processes

3. long-run relationships 3. long-run relationships

4. All of the above are true4. All of the above are true


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Q: Demand in business markets tend to be _____.

1. elastic 1. elastic

2. unitary elastic 2. unitary elastic

3. inelastic 3. inelastic

4. none of the above4. none of the above


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Q: Economic developments, technological changes, and culture and customs are among the _____ influences that impact business buyer behavior.

1. environmental 1. environmental

2. interpersonal 2. interpersonal

3. organizational 3. organizational

4. individual4. individual


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Q: All of the following are examples of the first stage of the buying process except:

1. a company decides to launch a new 1. a company decides to launch a new product. product.

2. a machine breaks down and needs 2. a machine breaks down and needs new parts. new parts.

3. a buyer invites qualified suppliers to 3. a buyer invites qualified suppliers to submit proposals. submit proposals.

4. a purchasing manager is unhappy 4. a purchasing manager is unhappy with a current supplier's service.with a current supplier's service.


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Q: Do you think the government should use noneconomic criteria like for selecting firms with which to do business?

1. Yes, the government should 1. Yes, the government should favor firms based on favor firms based on noneconomic criteria.noneconomic criteria.

2. No, the government should base 2. No, the government should base its decisions solely on economic its decisions solely on economic criteria.criteria.


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Q: Schools, hospitals, and prisons are components of the:

1. consumer market. 1. consumer market.

2. government market. 2. government market.

3. institutional market. 3. institutional market.

4. micromarket.4. micromarket.


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