Instructor: Amir Ekhlassi (3) Consumer and Business Buyer Behavior.

Instructor: Amir Ekhlassi

(3) Consumer and Business Buyer Behavior

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2 ©Compiled by: Amir Ekhlassi

Consumer Buyer BehaviorConsumer buyer behavior refers to the buying

behavior of final consumers, individuals and households who buy goods and services for personal consumption.

These final consumers make up the consumer market.

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

marketing efforts the company might use?”


Model of Buyer Behavior

Marketing stimuli

Products &servicesPriceDistribution

Communication

Other stimuli

EconomicTechnologicalPoliticalCultural

Consumer psychology

Motivation PerceptionLearningmemory

Consumer characteristics

CulturalSocial

personal

Buying decision process

Problem recognitionInformation searchEvaluation of alternativesPurchase decision

Post-purchase behavior

Purchase decision

Product choiceBrand choiceDealer choicePurchase amountPurchase timing

Payment method


Factors influencing consumer behavior

cultural

Culture

Subculture

Social class

social

Reference groups

Family

Roles and status

personal

Age & life cycle stage

Occupation

Economic situation

Lifestyle

Personality and self-concept

psychological

Motivation

Perception

Learning

Beliefs and attitudes

Buyer


Factors influencing consumer behavior (cultural factors)

Culture: is the most basic cause of a person’s wants and behavior. Every group or society has a culture, and cultural influences on buying behavior may vary greatly from country to country.

Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted.



Subculture: each culture contains smaller subculture, or groups of people with shared value systems based on common life experiences and situations.

Subcultures include nationalities, religions, racial groups, and geographic regions.

Many subcultures make up important market segments, and marketers often design products and marketing programs tailored to their needs.



Social classes: are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors.

Social class is not determined by single factor, such as income, but is measured as a combination of occupation, income, education, wealth, and other variables.

Social classes show distinct product and brand preferences in areas such as clothing, home furnishing, leisure activity, and automobiles.



Social class is also affected by:Social skillsStatus aspirations Community participation Family history Cultural level Recreational habitsPhysical appearance Social acceptance by a particular class


Factors influencing consumer behavior (social factors)

Groups: a person’s behavior is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups. In contrast, reference groups serve as direct or indirect points of comparison or reference in forming a person’s attitudes or behavior.

People often are influenced by reference groups to which they do not belong.

Opinion leader: person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts influence on others.

10©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (social factors)

Family: the family is the most important consumer buying organization in society, and it has been researched extensively.

Roles and status: a person belongs to many groups- family, clubs, organizations. The person’s position in each group can be defined in terms of both role and status.

People often choose products that show their status in society.


Factors influencing consumer behavior (personal factors)

Age & life cycle stage: tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle.Traditional family life cycle: young singles

and married couples with children.Nontraditional stages: unmarried couples,

singles marrying later in life, childless couples, same-sex couples, single parents, extended parents, and etc.



Occupation: a person’s occupation affects the goods and services bought. Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can even specialize in making products needed by a given occupational group.

Economic situation: marketers of income-sensitive goods watch trends in personal income, savings, and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and reprice their products closely.



Lifestyle: is a person’s pattern of living as expressed in his/her psychographics. It involves measuring consumers’ major AIO dimensions (activities, interests, and opinions) life style captures more than the person’s social class or personality.

Personality and self-concept: personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment.


Factors influencing consumer behavior (psychological factors)

Motivation: a need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to direct the person to seek satisfaction.

Perception: is the process by which people select, organize, and interpret information to form a meaningful picture of the world.

People can form different perceptions of the same stimulus because of three perceptual processes: Selective attention selective distortionSelective retention 15

©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (psychological factors)

Learning: describes changes in an individual’s behavior arising from experience. learning theorists say that most human behavior is learned. Classical conditioning (the behaviors are assumed to

be involuntary and not under the conscious control of the individual)

Operant conditioningBeliefs and attitudes: a belief is a descriptive thought

that a person has about something. Attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea.


The buyer decision process

Need Recognition

InformationSearch

Evaluation ofAlternatives

Purchase Decision

PostpurchaseBehavior



1. Need recognition: the buying process starts with need recognition-the buyer recognizes a problem or need. The need can be triggered by internalinternal or externalexternal stimuli. at this stage, the marketer should research consumers to find out what kinds of needs or problems arise, what brought them about, and how they led the consumer to this particular product.


The buyer decision process2. Information search: of the consumer’s drive is strong

and a satisfying product is near at hand, the consumer is likely to buy it then. If not, the consumer may store the need in memory or undertake an information search related to the need.

The consumer can obtain information from the following sources: Personal sources (family, friends, neighbors) Commercial sources (advertising, salespeople,

dealers)Public sources (mass media, consumer rating orgs)Experiential sources (handling, examining, using

the product)



3. Evaluation of alternatives: unfortunately, consumers do not use a simple and single evaluation process in all buying situations. Instead, several evaluation processes are at work.

How consumers go about evaluating purchase alternatives depends on the individual consumer and the specific buying situation.



4. Purchase decision: generally, the consumer’s purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision. The first factor is the attitudesattitudes ofof othersothers. The second factor is unexpectedunexpected situationalsituational factorsfactors. .


The buyer decision process5. Postpurchase behavior: the larger the gap

between expectations and performance, the greater the consumer’s dissatisfaction. Almost all major purchase result in cognitivecognitive

dissonancedissonance. A company would be wise to measure

customer satisfaction regularly. It cannot simply rely on dissatisfied customers to volunteer their complaints when they are dissatisfied. Companies should set up systems that encourage customers to complain.

22©Compiled by: Amir Ekhlassi

The buyer decision process for new products

A new product is a good, service, or idea that is perceived by some potential customers as new.

Adoption process: the mental process through which an individual passes from first hearing about an innovation to final adoption. Stages in the adoption process are: Awareness InterestEvaluationTrialAdoption


Individual differences in innovativenessP

erc

enta

ge

of

Ad

op

ters

Time of Adoption

Early Late

Inn

ova

tors

Early Adopters

Early Majority

2.5%13.5%

34% 34%

16%

Laggards

Late Majority


Influence of product characteristics on rate of adoption

Five characteristics are especially important in influencing an innovation’s rate of adoption: Relative advantageCompatibilityComplexity divisibility Communicability

Other characteristics influence the rate of adoption, such as: Initial and ongoing costsRisk and uncertaintySocial approval


Business buyer behavior

Business Buyer BehaviorBusiness Buyer Behavior refers to the buying behavior of all 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.

The business market is huge and involves many more dollars and items do consumer markets.


Characteristics of business marketsMarket Structure and Demand

• Fewer, larger buyers • Geographically concentrated• Demand derived from consumers • Fluctuating demand

Nature of the Buying Unit

• More buyers • More professional purchasing effort

Types of Decisions & the Decision Process

• More complex decisions• Process is more formalized• Buyer and seller are more dependent on each other• Build close long-term relationships with customers27 ©Compiled by: Amir Ekhlassi

Business buying situations

Straight Re-buyStraight Re-buy

New Task BuyingNew Task Buying

Modified Re-buyModified Re-buy

Inv

olv

ed

De

cis

ion

M

ak

ing


Participants in the Business BuyingProcess: The Buying Center

Buying CenterBuying Center

UsersGatekeepers

Buyers Deciders

Influencers


Major Influences on Business Buyer Behavior

EnvironmentalEconomic, Technological, Political, Competitive

EnvironmentalEconomic, Technological, Political, Competitive

OrganizationalObjectives, Policies, Procedures,

Structure, & Systems

OrganizationalObjectives, Policies, Procedures,

Structure, & Systems

InterpersonalAuthority, Status, Empathy &

Persuasiveness

InterpersonalAuthority, Status, Empathy &

Persuasiveness

IndividualAge, Education, Job Position, Personality &

Risk Attitudes

IndividualAge, Education, Job Position, Personality &

Risk Attitudes

BuyersBuyers30 ©Compiled by: Amir Ekhlassi

Stages of the BusinessBuying Process

Problem RecognitionProblem Recognition

General Need DescriptionGeneral Need Description

Product SpecificationProduct Specification

Supplier SearchSupplier Search

Proposal SolicitationProposal Solicitation

Supplier SelectionSupplier Selection

Order Routine SpecificationOrder Routine Specification

Performance ReviewPerformance Review


Thank You For Your Patience & Attention

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Instructor: Amir Ekhlassi (3) Consumer and Business Buyer Behavior.

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