Buyer Behavior

Model of Buyer Behavior (Fig. 5.1)

Marketing and Other Stimuli
Marketing
Product Price Place Promotion

Buyers Black Box

Buyer Characteristics Buyer Decision Process

Buyer Responses
Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount

Other

Economic Technological Political Cultural

Approaches to Study of Buyer Behavior

Economic model Learning theory model Psycho-analytic model Information processing model

The EBM model of buyer behavior

(Engel, Blackwell, and Miniard)

Factors Affecting Consumer Behavior: Culture

Culture is the Most Basic Cause of a Person's Wants and Behavior.
Subculture
Group of people with shared value systems based on common life experiences. Hispanic Consumers African American Consumers Asian American Consumers Mature Consumers

Factors Affecting Consumer Behavior: Culture

Culture is the Set of Values, Perceptions, Wants & Behavior Learned by a Member of Society from Family.
Social Class
Societys relatively permanent & ordered divisions whose members share similar values, interests, and behaviors. Measured by: Occupation, Income, Education, Wealth and Other Variables.

Factors Affecting Consumer Behavior: Social

Groups Membership Reference

Family (most important) Husband, wife, kids Influencer, buyer, user

Social Factors

Family Buying Influence

Roles and Status

Children can exert a strong influence on family buying decisions. Johnson & Johnson reminds customers of its commitment to the American Family.

What other companies use children to influence family buying decisions?

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Factors Affecting Consumer Behavior: Personal

Personal Personal Influences Influences
Age Age and and Life Life Cycle Cycle Stage Stage Economic Economic Situation Situation Personality Personality & & Self-Concept Self-Concept

Occupation Occupation

Lifestyle Lifestyle Identification Identification

Activities Activities

Interests Interests

Opinions Opinions

SRI Values and Lifestyles (VALS) (Fig. 5.3)

High Resources Actualizers High Innovation

Fulfilleds

Achievers

Experiencers

Believers

Strivers

Makers

Strugglers

Low Resources

Low Innovation

Factors Affecting Consumer Behavior: Psychological

Motivation

Beliefs and Attitudes

Psychological Factors Affecting Buyers Choices

Perception

Learning

Maslows Hierarchy of Needs (Fig. 5.4)

(Self-development)

Self Actualization

Esteem Needs (self-esteem)

(sense of belonging, love)

Social Needs

(security, protection)

Safety Needs

Physiological Needs
(hunger, thirst)

Consumer Evaluation
What criteria do consumers use to make evaluations? What do consumers care about? Values Benefits Attributes Means-End Value Chains

Means-End Value Chains

Power Status Self esteem Peer admiration Speed Exclusivity Horse power Prestige brand Styling Extras BMW Lexus Mercedes Honda Toyota Nissan Protection Value Reliability Low emissions Air bags High mpg Price/resale Japanese $$ security Family Environment

Multi-attribute evaluation
Belief x Importance Model: Evaluation is reflected by brand attitude Attitude is the sum of salient beliefs, Weighted by the importance of each belief
Atto = (Bi x Ii) Summed for each attribute i.

The Bi component indicates the strength of the association. The Ii component indicates the importance of that association to brand attitude.

Buyer Decision Process (Fig. 5.6)

Purchase Decision
Evaluation of Alternatives Information Search Need Recognition Postpurchase Behavior

Buyer Decision Process Step 1. Need Recognition

State Where the Buyers Needs are Fulfilled and the Buyer is Satisfied. Buyer Recognizes a Problem or a Need. Needs Arising From:

Internal Stimuli

Hunger
External Stimuli-

Friends

The Buyer Decision Process Step 2. Information Search

Personal Sources
Commercial Sources Public Sources Experiential Sources
Family, friends, neighbors Most effective source of information Advertising, salespeople Receives most information from these sources Mass Media Consumer-rating groups

Handling the product Examining the product Using the product

The Buyer Decision Process

Consumer May Use Careful Calculations & Logical Thinking Consumers May Buy on Impulse and Rely on Intuition Consumers May Make Buying Decisions on Their Own. Consumers May Make Buying Decisions Only After Consulting Others.

Step 4. Evaluation of Alternatives

Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives

The Buyer Decision Process

Step 5. Purchase Decision
Desire to buy the most preferred brand

Purchase Intention

Attitudes of Others

Unexpected Situational Factors

Purchase Decision

The Buyer Decision Process

Satisfied Customer!

Step 6. Postpurchase Behavior

Dissatisfied Customer

Cognitive Dissonance

Consumers Expectations of Products Performance. Products Perceived Performance.

Role of Consumer Involvement

Sometimes consumers make evaluations/choices very carefully Sometimes consumers make evaluations/choices with little care Involvementstrength of motivation, importance High involvementB X I model

Low involvement evaluations

Cognitive shortcuts (heuristics) Habit Affective responses

Stages in the Adoption Process

Awareness: Consumer is aware of product, but lacks information. Interest: Consumer seeks Information about new product. Evaluation: Consumer considers trying new product. Trial: Consumer tries new product on a small scale. Adoption: Consumer decides to make regular use of product.

Adopter Categories (Fig. 5.7)

Percentage of Adopters Early Majority Late Majority

Innovators

Early Adopters
13.5%

34%

34% 16%

Laggards

2.5%

Time of Adoption Late

Early

Influence of Product Characteristics on Rate of Adoption

Communicability
Can results be easily observed or described to others?

Relative Advantage
Is the innovation superior to existing products?

Can the innovation be used on a trial basis? Is the innovation difficult to understand or use?

Divisibility

Complexity

Does the innovation fit the values and experience of the target market?

Compatibility

What is a Business Market?

A business market comprises 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 goods than do consumer markets.

Characteristics of Business Markets

Marketing Structure larger buyers and Demand Customers are more
Buyer demand is derived from final consumer demand Demand is often more Contain fewer, but

geographically concentrated

inelastic

Demand often fluctuates more, and more quickly

Characteristics of Business Markets

Nature of the Buying Unit

Business purchases involve more buyers. Business buying involves a more

professional purchasing effort.

Characteristics of Business Markets

Business buyers usually face more complex buying decisions.

Types of Decisions and the Decision Process

Business buying process is more formalized.

In business buying, buyers and sellers work more closely together.

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To develop long-term partnerships, business marketers work closely with their customers.
Fujitsu promises high-end support to go along with its high-tech products.

This Unisys ad offers services from technological consulting to database setup and maintenance.

Model of Business Buyer Behavior (Fig. 6.1)

The Environment
Marketing Stimuli:
Product Price Place Promotion

The Buying Organization

The buying center Buying decision process

Buyer Responses
Product or service choice

Supplier Choice
Order Quantities Delivery terms and times Service terms Payment

Other Stimuli:
Economic Technological Political Cultural Competitive

(Interpersonal and individual influences)

(Organizational Influences)

Organizational Buying
Professional purchasing Fewer buyers Larger purchases Closer, longer relationships/ reciprocity Geographic concentration Derived demand Lower price sensitivity Buying center

Participants in the Business Buying Process

Users Ethical DecisionMaking Unit of a Buying Roles Include Organization is Called Its Attitudes Buying of Center. Others
Unexpected Situational Factors

Influencers

Buyers

Gatekeepers

Deciders