UNDERSTANDING INDUSTRIAL

AND INDIVIDUAL BUYER BEHAVIOR

UNIT 4
 Model of Buying Behavior

Marketing Other Buyers Buyers decision

Stimuli stimuli characteristics Process

Product Economic Cultural Problem recognition

Price Technological Social Information search
Place Political Personal Evaluation
Promotion Cultural Psychological Decision
Post-purchase
behavior

Buyers decisions
Product choice
Brand choice
Dealer choice
Purchase timing
Purchase amount
 Characteristics of Business
Markets
Market
Market Structure
Structure and
and Demand
Demand
Fewer,
Fewer,larger
largerbuyers
buyers
Geographically
Geographicallyconcentrated
concentrated
Demand
Demand derivedfrom
derived fromconsumers
consumers
Inelastic demand
Inelastic demand
Fluctuating
Fluctuatingdemand
demand
Nature
Nature of
of the
the Buying
Buying Unit
Unit
More
Morebuyers
buyers
More
More professionalpurchasing
professional purchasing
effort
effort
Types
Types of
of Decisions
Decisions &
& the
the
Decision Process
Decision Process
More
Morecomplex
complexdecisions
decisions
Process
Process is moreformalized
is more formalized
Buyer
Buyer and seller aremore
and seller are more
dependent on each other
dependent on each other
Build
Buildclose
closelong-term
long-termrelationships
relationships
with customers
with customers
7-3
 Types of Business Buying

Custom furniture
Installed components
New
NewTask
TaskBuying
Buying Buildings
Weapon systems
Involved Decision Making

New vehicles
Electrical
equipment
Modified
ModifiedRebuy
Rebuy Consultants
Computer
equipment

Utilities
Office
Straight
StraightRebuy
Rebuy Supplies
Bulk
chemicals
 Participants in the
Business Buying
Process

Users

Initiators Influencers

Gatekeepers

Buyers Deciders

Approvers
 Organizational Factors

Decentralized
Purchasing- Cross-
Centralized Purchasing
Department Functional
Purchasing of Small
Upgrading Roles
Ticket Items

Purchasing-
Internet Long-Term Performance Lean
Purchasing Contracts Evaluation & Production
Pro. Buyers
 Performance
Performance Review
Review Post Purchase
Order
Order Routine
Routine Specification
Specification Purchase
Supplier
Supplier Selection
Selection
Proposal
Proposal Solicitation
Solicitation
Evaluation
Supplier
Supplier Search
Search Search &
Information
Product
Product Specification
Specification
General
General Need
Need Description
Description Need Recognition
Problem
Problem Recognition
Recognition
Process
Stages in the Business Buying
 Buyer
Buyer
Psychological
Psychological
Family
Family &
& Lifestyle
Lifestyle
Social
Social
Cultural
Cultural
Consumer Behavior
Characteristics Affecting
Cultural Factors

Culture
Subcultur
e
Social Class

Buyer
Buyer
 Social Factors

Reference
Groups

Roles &
Family
Statuses
 Interests
Opinions Activities
Lifestyle Identification
Economic Situation
Occupation Age and Life Cycle Stage
Family Infuences
Family and Lifestyle Infuences
 Psychological Factors

Motivation
Motivation

Beliefs &
Beliefs &
Perception
Perception Learning
Learning
Attitudes
Attitudes
Consumer Buying Roles

User
User Initiator
Initiator

Key
Family
Decision
Buyer
Buyer Roles Infuencer
Infuencer

Decider
Decider
Four Types of Buying
Behavior
High Low
Involvement Involvement

Significant
differences
Behavior Behavior
between Buying Seeking
brands Complex Variety-

Few Behavior Behavior

differences Reducing Buying Buying
between Dissonance- Habitual
brands
Consumer Buying Process
Problem
recognition

Information
search

Evaluation of
alternatives

Purchase
decision

Post-purchase
behavior
CONSUMER BEHAVIOR
MODELS
Stimuli Buyers Black Box and
Buyer Response
Marketing stimuli consists of the marketing
mix products, price, place & promotion and
other stimuli include other forces in the
buyers environment: economic,
technological, political and cultural.
All these inputs enter the buyers black
box, where they are turned into a set of
observable buyer responses, i.e. product
choice, brand choice, dealer choice,
purchase timing and purchase amount.
A MODEL OF ORGANIZATIONAL
BUYER BEHAVIOR
The basic difference between the two
models is in the middle segment:
a black box in the case of consumers,
an organization in the case of business
markets.
There are two main components of the
middle segment:
the buying centre and
the buying decision process.
The buying centre concept is useful in
understanding the various influences on
the business buying process. The
business marketer, such as a port,
terminal or shipping service, needs to be
aware that in any purchasing situation
there is not only the buyer, but users,
influencers, deciders and information
gatekeepers as well. All these roles
comprise the buying centre, and its size
and composition vary depending on the
nature of the purchase as well as the
type of business.
 The buying decision process has a number of
major steps :
Anticipate or recognize a
problem/need/opportunity and a general solution
Determine the characteristics and quantity of a
needed good or service
Describe precise product specifications and
critical needs
Search for and qualification of potential sources
Acquisition and analysis of proposals
Evaluation of proposals and selection of
suppliers
Selection of an order routine
Performance feedback and evaluation
 Types of buying situations
1.New task
New purchase or product category.
More people involved in new purchase.
Extensive information must be collected and evaluated
on alternative products.
Seller displays creative selling ability in satisfying buyer
needs.
2. Straight re-buy
Information needs are minimal
There is no great consideration of alternatives.
Buying decision made in the purchasing department
e.g. purchasing of office supplies.
3. Modified re-buy
Situation in which the buyer wants to change (modify)
the product specifications, price, terms, or suppliers.
HOWARD- SHETH MODEL OF CONSUMER BEHAVIOR
it attempts to explain the complexity of the consumer decision making process
in case of incomplete information.
ENGEL, KOLLAT & BLACKWELL, 1969
MODEL OF CONSUMER BEHAVIOR
It attempts to understand the buyer decision making
process, both individually and in groups.
 WEBSTER AND WIND
MODEL OF CONSUMER DECISION PROCESS
 INITIATOR first identifies the need to buy a
particular product or service to solve an
organizational problem;
INFLUENCER (their) views influence the
buying centre's buyers and deciders;
DECIDER ultimately approves all or any part of
the entire buying decision -- whether to buy,
what to buy, how to buy, and where to buy;
BUYER holds the formal authority to select the
supplier and to arrange terms of condition;
USER consumes or uses the product or service;
GATEKEEPER controls information or access or
both, to decision makers and influencers.