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 Marketers Must Identify and Understand:

Who Makes the Buying Decision
Types of Buying Decisions Stages in the Buying Process

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 A narrowed down set of alternatives that the customer is considering

Evoked set:

Consumer Buying Decision Process

Successive Sets Involved in Consumer Decision Making

Evaluation of Alternatives

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

Purchase Decision

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

Postpurchase Evaluation

Four possible outcomes in the postpurchase stage:

(1) Delight (2) Satisfaction (3) Dissatisfaction (4) Cognitive Dissonance

Firms ability to manage dissatisfaction and cognitive dissonance is:

A key to creating customer satisfaction A major influence on word-of-mouth communication

Business Markets and Behavior

Organizational Buying
Compared to Consumer Markets, Business Markets Have:
Fewer buyers Larger buyers Geographically concentrated buyers Closer relationships with suppliers/customers

The Business Buying Process

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

Understanding Business Buying Behavior

Unique Characteristics of Business Markets

The Buying Center Hard and Soft Costs Reciprocity Mutual Dependence Producer markets (a.k.a. commercial markets) Reseller markets Government markets Institutional markets

Four types of Business Markets:

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

Roles Played in a Buying Center

Initiators Users Approvers Deciders

Influencers

Buyers

Gatekeepers