How & Why People Buy

• People buy according to a Hierarchy of Needs(Maslow)

• Self-actualization

• Self-esteem/Ego

• Social

• Safety

• Physiological

How & Why People Buy

• Values/Lifestyle influence buying behavior• VALS instrument classifies buying

behavior based on resources and primary motivation

• Three frames of reference: • Principle- Thinker, Believer• Status- Achiever, Striver• Action- Experiencer,etc

How& Why People Buy

• Buying behavior depends on the nature of the purchase

• 1. Routine- repeat purchase with no new information

• 2. Modified- repeat purchase with some new information(product characteristics,etc)

• 3. New- first time purchase, new technology & uses, require learning/assessment

Buyers can be grouped into Market Segments

• Segments can be based on Values(VALS) or other characteristics such AS:

• 1. Demographics-age,income for consumers: type &size of farm/business

• 2. Psychographics- values, attitudes

• 3. Benefits- nature of product and what it does for the purchaser(perceived in nature)

A Look At Large Farm Purchaser Behavior

• Purdue Study of Large Farms(website)

• Large Commercial Farms are one segment of farm types(List of farm types)

• Commercial buying behavior differs from consumer buying

Delineation of Market Segments-research techniques

• Market segments can be derived by:

• 1. Ex ante delineation- classification based on characteristics

• 2. Ex post- classification based on customer responses/statistical derivation using SPSS or other programs based on homogeneous grouping of responses(Lab project)

Examples of Statistical Segmentation of Markets

• GMO foods

• Natural food buying

• Shopping behavior

• Other