Consumer & Business Buyer Behavior

Perception

Process by which an individual selects, organizes, and interprets information to form a cohesive picture about an entity

Perceptions affect consumer behavior However, remember that individuals can

perceive the same entity in different ways

Perception

Selective Attention: Receive some messages and screen out the rest An average person is exposed to 1500 ads or brand

messages a day Most of these are screened out; So, how do marketers

capture mind space? People are more likely to notice stimuli that relate to current

needs People are more likely to notice stimuli they anticipate People are more likely to notice stimuli that deviate relatively

larger than others Marketers must bypass attention filters; provide

unexpected stimuli (salesperson, sudden offers)

Perception

Selective Distortion: Tendency to interpret/distort information to be consistent with prior brand and product beliefs Taste tests: “Blind” taste tests showed equal

split; “Open” tests showed preferences Can work to the advantage of marketers of

strong brands A car may seem to drive smoother A beer may taste better

Perception

Selective Retention: Though people fail to register much information, they retain information that supports their attitudes and beliefs Remember good points about products we like

and forget good points about competing products

Works to the advantage of strong brands Explains why marketers repeat messages – for

reinforcement

Consumer Buying Decision Process

Who Makes the Buying DecisionWho Makes the Buying Decision

Types of Buying DecisionsTypes of Buying Decisions

Stages in the Buying ProcessStages in the Buying Process

Marketers Must Identify and Understand:

Consumer Buying Decision Process

Understand

Buying roles Buying behavior Buying decision

process

Initiator Influencer Decider Buyer User

Consumer Buying Decision Process

Understand

Buying roles Buying behavior Buying decision

process

Complex buying behavior

Dissonance-reducing buying behavior

Habitual buying behavior Variety-seeking buying

behavior

Consumer Buying Decision Process

Understand

Buying roles Buying behavior Buying decision

process

Five stages in the consumer buying process

The amount of time spent in each stage varies according to several factors

Consumer Buying Decision Process

Five-Stage Model of the Consumer Buying Process

Need Recognition

Need/Problem Recognition Can be triggered by internal or external

stimuli Needs become wants, which lead to

behavior Marketing stimuli can stimulate a desire

for information

Information Search (1 of 2)

Sources of information: Internal Sources Personal Sources External Sources

Time, effort and expense dedicated to information search depends on: Degree of risk involved in the purchase Amount of expertise with the product category Actual cost of the search

Evoked set: A narrowed down set of alternatives that the customer is

considering

Consumer Buying Decision Process

Successive Sets Involved in Consumer Decision Making

Customers evaluate products as bundles of attributes Brand attributes Product features Aesthetic attributes Price

Customers place different levels of importance on attributes

Important considerations in the evaluation stage: Products must be in the evoked set Consumers’ choice criteria must be understood Marketing programs must be designed to influence

consumers’ opinions about product or brand image

Evaluation of Alternatives

Purchase intention and the act of buying are distinct concepts

Potential intervening factors between intention and buying (car example): Unforeseen circumstances Angered by the salesperson or sales manager Unable to obtain financing Customer changes mind

Key issues in the purchase decision stage: Product availability Possession utility

Purchase Decision

Four possible outcomes in the postpurchase stage: (1) Delight (2) Satisfaction (3) Dissatisfaction (4) Cognitive Dissonance

Firm’s ability to manage dissatisfaction and cognitive dissonance is: A key to creating customer satisfaction A major influence on word-of-mouth communication

Postpurchase Evaluation

Business Markets and Behavior

Organizational Buying

Fewer buyersFewer buyers

Larger buyersLarger buyers

Geographically Geographically concentrated buyersconcentrated buyers

Closer relationships with Closer relationships with suppliers/customerssuppliers/customers

Compared to Consumer Markets, Business Markets Have:

Problem/Need Recognition Develop Product Specifications Vendor Identification and Qualification Solicitation of Proposals or Bids Vendor Selection Order Processing Vendor Performance Review

The Business Buying Process

Unique Characteristics of Business Markets The Buying Center Hard and Soft Costs Reciprocity Mutual Dependence

Four types of Business Markets: Producer markets (a.k.a. commercial markets) Reseller markets Government markets Institutional markets

Understanding Business Buying Behavior

Organizational Buying

Buying Situations

Straight rebuy Modified rebuy New task

Routine reorders from approved vendor list

Low involvement, minimal time commitment

Example: copier paper

Organizational Buying

Buying Situations

Straight rebuy Modified rebuy New task

Specifications, prices, delivery terms or other aspects require modification

Moderate level of involvement and time commitment

Example: desktop computers

Organizational Buying

Buying Situations

Straight rebuy Modified rebuy New task

Purchasing a product or service for the first time

High level of involvement and time commitment; multiple influences

Example: selecting a web site design firm or consultant

Participants in Business Buying

Gatekeepers

Roles Played in a Buying Center

Influencers

Users

Initiators

Buyers

Deciders

Approvers