Models of CB & Industrial Buying Behaviour

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Transcript of Models of CB & Industrial Buying Behaviour

Organizational Buying Behavior & Models of Consumer BuyingShivali Kamal Third sem Rbs,Hyderabad

Contents in brief:

Consumer Decision-Making, Models of Consumer Behaviour, Types of consumer behaviour models, Industrial buying behaviour Industrial Vs Consumer Market & The process of industrial purchasing .

Consumer Decision-MakingBuyer decision processes are the decision making processes undertaken by consumers in regard to a potential market transaction before, during, and after the purchase of a product or service. A general model (box-and-arrow models) consists of :-

Models of Consumer Behaviour

Economic model :-It is one-dimensional model. Being rational, one will make his purchase decisions with the intention of maximizing the utility/benefits. Economic model is based on certain predictions as price effect ,substitution effect & income effect. The sociological model :-The individual buyer is a part of the institution called society. So, he gets influenced by it and in turn also influences it in its path of development. Learning model :-Classical psychologists have been interested in the formation and satisfaction of needs and tastes .living beings were influenced by both innate needs .A drive or internal stimulus which when directed towards a drive-reducing object becomes a motive. Psychoanalytical model:-It is based on the work of psychologists who were concerned with personality (outcome of id, super ego & ego). Human needs and motives operated at the conscious as well as subconscious levels. Marketers have been using this approach to generate ideas for developing product-design, features, advertising and other promotional techniques.

Types of models of consumer behaviour:A model a is simplified version of reality, it has never been reality, it isnt reality and it will never be reality...therefore all models are subject to criticism. MaslowsHierarchy of Needs (Conceptual model); The Howard Sheth Model of Buying Behaviour; Engel, Kollatand Blackwell model.

Maslows Hierarchy of Needs(self-development (self-development and realization) and realization)

SelfSelfactualization actualization


(self-esteem, recognition) (self-esteem, recognition)

Esteem needs 4 Esteem needs

Social needs Social needs 3 (sense of belonging, love) (sense of belonging, love)

2 1

Safety needs Safety needs (security, protection) (security, protection) Psychological needs Psychological needs (food, water, shelter) (food, water, shelter)

Engel-Kollat-Blackwell model

The Howard sheth model

Industrial vs. consumer markets Aspect Industrial market Consumer marketBuying objective Buying motive Purchasing function Decision making Characteristics Product & market knowledge Order size Demand Price elasticity Number of customers Spread of customers Enable production Mainly rational Professional buying Many persons involved, much discussion Negotiations, intense interaction Large Often large Derived, fluctuation Rather inelastic Mostly limited Sometimes large geographic concentration Personal need satisfaction Also emotional Consumers Often impulsive, without consulting others Often without negotiation, little interaction Limited Mostly small Autonomous, relatively stable Rather elastic Very large Large spread

The purchasing processDefine specification Proc. Role - Get specification Select supplier - Assure adequate supplier selection Contract agreement - Prepare contract Ordering - Establish Order routine Expediting - Establish expediting routine - Expediting - 'Troubleshooting' Evaluation Follow up - Vendor performance evaluation - Settling contract problems - Vendor rating - Vendor evaluation


Functional - Prequalification specification of suppliers - Technical - Request for changes quotation - Bring supplier engineering knowledge to-

- Contracting expertise - Negotiating expertise

- Develop orderroutines - Orderhandling

Documents - Functional specification - Norm/spec. control

Supplier selection proposal



Overdue list

- Vendor balanced score card - Vendor profile - Vendor ranking

Three types of purchasing situations:New task : Completely new product from unknown suppliers High uncertainty regarding outcome (e.g. acquisition of capital goods) Modified Rebuy : New product from known supplier Existing product, new supplier Moderate uncertainty regarding outcome

Straight rebuy: Known

product from known supplier Low uncertainty regarding outcome

Any Questions.?

Thank u for Your attention