Professor Takada Consumer and Business Buyer Behavior ４.

Professor TakadaProfessor Takada

Consumer and Business Buyer Consumer and Business Buyer BehaviorBehavior

４

Professor TakadaProfessor Takada5-2

ROAD MAP: Previewing the Concepts

• Major factors that influence consumer Major factors that influence consumer buyer behavior.buyer behavior.

• Buyer decision process.Buyer decision process.

• Adoption and diffusion process for new Adoption and diffusion process for new products.products.

• Business market:Business market:– Major factors that influence business buyer Major factors that influence business buyer

behavior.behavior.– Business buying decision process.Business buying decision process.


Model of Buyer Behavior


What Influences Consumer Behavior?

Cultural FactorsCultural Factors

Social FactorsSocial Factors

Personal FactorsPersonal Factors


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

Personality & Self-Concept

Psychological

Motivation

Perception

Learning

Beliefs & Attitudes

Psychological

Motivation

Perception

Learning

Beliefs & Attitudes


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


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.


Social Classes

Upper uppersLower uppersUpper middlesMiddle class

Working classUpper lowersLower lowers


Characteristics of Social Classes

• Within a class, people tend to behave Within a class, people tend to behave alikealike

• Social class conveys perceptions of Social class conveys perceptions of inferior or superior positioninferior or superior position

• Class may be indicated by a cluster of Class may be indicated by a cluster of variables (occupation, income, wealth)variables (occupation, income, wealth)

• Class designation is mobile over timeClass designation is mobile over time


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


Opinion Leaders

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


Family

• Family of OrientationFamily of Orientation– ReligionReligion– PoliticsPolitics– EconomicsEconomics

• Family of ProcreationFamily of Procreation– Everyday buying Everyday buying

behaviorbehavior


Targeting Women and Their Families


Personal Factors

ActivitiesActivities InterestsInterests

LifestyleLifestyle

OpinionsOpinions

Pattern of Living as Expressedin Psychographics

Pattern of Living as Expressedin Psychographics


Behavior changesaccording to life cycle stage

•Family•Psychological•Critical life events


Brand Personality

SinceritySincerity

ExcitementExcitement

CompetenceCompetence

SophisticationSophistication

RuggednessRuggedness


Lifestyle Influences

Multi-tasking

Time-starved

Money-constrained


Key Psychological Processes

Motivation

MemoryLearning

Perception


Motivation

Freud’sTheory

Behavioris guided by subconsciousmotivations

Maslow’sHierarchyof Needs

Behavioris driven by

lowest, unmet need

Herzberg’sTwo-Factor

Theory

Behavior isguided by motivating

and hygienefactors


Maslow’s Hierarchy of Needs


Herzberg’s Two-Factor Theory


Perception

Selective Attention

Subliminal Perception

Selective Retention

Selective Distortion


Encoding Brand Associations


Learning, Beliefs & Attitudes

• LearningLearning is a relatively permanent change in behavior due to experience.

•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.


ROAD MAP

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

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


Buying Decision Process


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.



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.



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



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



Factors That Influence Purchase Decision

AttitudesOf

Others

UnexpectedSituational

Factors


Buying Decision ProcessConsumer satisfaction is a function of consumer expectations and perceived product performance.

Performance < Expectations Disappointment

Performance = Expectations Satisfaction

Performance > Expectations Delight

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


Successive Sets


Evaluation of Attributes


Stages between Evaluation of Alternatives and Purchase


Non-compensatory Models of Choice

• ConjunctiveConjunctive

• LexicographicLexicographic

• Elimination-by-aspects Elimination-by-aspects


Perceived RiskFunctionalFunctional

PhysicalPhysical

FinancialFinancial

SocialSocial

PsychologicalPsychological

TimeTime


Other Theories of Consumer Decision Making

InvolvementInvolvement

• Elaboration Elaboration Likelihood ModelLikelihood Model

• Low-involvement Low-involvement marketing marketing strategiesstrategies

• Variety-seeking Variety-seeking buying behaviorbuying behavior

Decision HeuristicsDecision Heuristics

• AvailabilityAvailability

• RepresentativenessRepresentativeness

• Anchoring and Anchoring and adjustmentadjustment


ROAD MAP

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

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

• AdoptionAdoption and and diffusiondiffusion process for process for newnew products. products.


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.


Adoption of InnovationsAdoption of InnovationsP

erce

nta

ge

of

Ad

op

ters

Time of AdoptionEarly Late

Inn

ova

tors

Early Adopters

Early Majority

2.5%

13.5%

34% 34%

16%

Laggards

Late Majority


Product Adopter Categories

Group #1 - InnovatorsGroup #1 - Innovators• InnovatorsInnovators are the first adopters of new are the first adopters of new

products. products.

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

Group #2 – Early AdoptersEarly adopters are guided by respect. They are opinion leaders in their communities and adopt new ideas early but carefully.


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?


Five Major Characteristics of Innovation

CharacteristicsCharacteristics

• Relative AdvantageRelative Advantage

• CompatibilityCompatibility

• ComplexityComplexity

• DivisibilityDivisibility

• CommunicabilityCommunicability

Diffusion Diffusion RateRate

Marketing Mix


New Product Adoption Rate

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


TimeProduct

Develop-ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments ($)

Sales andProfits ($)

Sales and Profits Over the Product’s Lifetime

Product Life Cycle


ROAD MAP:

• Major factors that influence consumer buyer Major factors that influence consumer buyer behavior.behavior.

• Buyer decision process.Buyer decision process.

• Adoption and diffusion process for new products.Adoption and diffusion process for new products.

• Business market:Business market:– Major factors that influence business buyer Major factors that influence business buyer

behavior.behavior.– Business buying decision process.Business buying decision process.


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.


Business Markets

• Market Structure Market Structure and Demand:and Demand:– Fewer but larger

buyers.– Customers

geographically concentrated.

– Business demand derived from consumer demand.

• Nature of the Nature of the Buying Unit:Buying Unit:– More decision

participants.– Professional

purchasing.


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.


Model of Business Buyer Behavior


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.


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


Major Influences on Business Buyer Behavior


Business Buying Process


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


Methods of e-Procurement

• Websites organized using vertical hubsWebsites organized using vertical hubs

• Websites organized using functional Websites organized using functional hubshubs

• Direct extranet links to major suppliersDirect extranet links to major suppliers

• Buying alliancesBuying alliances

• Company buying sitesCompany buying sites


Forms of Electronic Marketplaces

•Catalog sites•Vertical markets

•Pure play auction sites•Spot markets

•Private exchanges•Barter markets

•Buying alliances


Vendor Analysis


Order Routine Specification and Inventory

Stockless purchase plans

Vendor-managedinventory

Continuous replenishment


Desirable Outcomes of a B2B transaction: OTIFNE

OTOn time

NENo error

IFIn full


Establishing Corporate Credibility

Expertise

LikeabilityTrustworthiness


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

Professor Takada Consumer and Business Buyer Behavior ４.

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Transcript of Professor Takada Consumer and Business Buyer Behavior ４.