Chapter 7Chapter 7Analyzing Consumer Analyzing Consumer Markets and Buyer BehaviorMarkets and Buyer Behaviorbyby

In this chapter, we focus on two questions:In this chapter, we focus on two questions: How do the buyers’ characteristics – cultural, How do the buyers’ characteristics – cultural,

social, personal, and psychological – influence social, personal, and psychological – influence buying behavior?buying behavior?

How does the buyer make purchasing How does the buyer make purchasing decisions?decisions?

Chapter Objectives

Culture

Cultural Factors

Subculture

Social Class

BuyerBuyer

Social Factors

ReferenceGroups

ReferenceGroups

Roles &Statuses

Roles &StatusesFamilyFamily

Influences on Consumer Behavior

Personal InfluencesPersonal Influences

Age and Family Life Cycle Stage

Age and Family Life Cycle Stage LifestyleLifestyle

Occupation &Economic Circumstances

Occupation &Economic Circumstances

Personality & Self-Concept

Personality & Self-Concept

Psychological Factors

PerceptionPerception LearningLearning

Beliefs &AttitudesBeliefs &Attitudes

MotivationMotivation

Maslow’s Hierarchyof Needs

Psychological needs(food, water, shelter)Psychological needs(food, water, shelter)1

Safety needs(security, protection)

Safety needs(security, protection)

2

Social needs(sense of belonging, love)

Social needs(sense of belonging, love)3

Esteem needs(self-esteem, recognition)

Esteem needs(self-esteem, recognition)

4

Self-actualization

(self-developmentand realization)

Self-actualization

(self-developmentand realization)

5

Buying RolesBuying Roles InitiatorInitiator InfluencerInfluencer DeciderDecider BuyerBuyer UserUser

Buying behaviorBuying behavior

The Buying Decision Process

Types of Buying Behavior

ComplexBuying

Behavior

Dissonance-Reducing Buying

Behavior

Variety-SeekingBehavior

HabitualBuying

Behavior

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

HighInvolvement

LowInvolvement

Consumer Buying Process

ProblemProblemrecognitionrecognition

Informationsearch

Evaluation ofalternatives

Purchasedecision

Post purchasebehavior

Model of Buying Behavior

Buyer’s decisionprocess

Problem recognitionInformation searchEvaluationDecisionPost purchase behavior

Otherstimuli

EconomicTechnologicalPoliticalCultural

Buyer’scharacteristics

CulturalSocialPersonalPsychological

Buyer’s decisions

Product choiceBrand choiceDealer choicePurchase timingPurchase amount

Marketingstimuli

ProductPricePlacePromotion

TotalSet

Decision Making Sets

Aware-nessSet

Consid-eration

SetChoice

Set Decision

Chapter 8Chapter 8Analyzing Business Markets Analyzing Business Markets and Business Buying and Business Buying BehaviorBehaviorbyby

Objectives

How Business & Consumer Markets DifferHow Business & Consumer Markets Differ Organizational Buying SituationsOrganizational Buying Situations Participants in the Business Buying ProcessParticipants in the Business Buying Process Major Influences on Organizational BuyersMajor Influences on Organizational Buyers Business Buyer Decision MakingBusiness Buyer Decision Making Institutional & Government BuyingInstitutional & Government Buying

Business vs. Consumer

Fewer buyersFewer buyers Larger buyersLarger buyers Close supplier-customer relationshipClose supplier-customer relationship Geographically concentratedGeographically concentrated Derived demandDerived demand Inelastic demandInelastic demand Fluctuating demandFluctuating demand

Business vs. Consumer

Professional purchasing Professional purchasing Several buying influencesSeveral buying influences Multiple sales callsMultiple sales calls Direct purchasingDirect purchasing ReciprocityReciprocity LeasingLeasing

Invo

lved

Dec

isio

n M

akin

gIn

volv

ed D

ecis

ion

Mak

ing

Modified RebuyModified RebuyModified RebuyModified Rebuy

New Task BuyingNew Task BuyingNew Task BuyingNew Task Buying

Straight RebuyStraight RebuyStraight RebuyStraight Rebuy

UtilitiesOffice SuppliesBulk chemicals

New vehiclesElec. EquipConsultantsComputer equip.

Custom furnitureInstalled componentsBuildingsWeapon systems

Participants in the Business Buying Process

Gatekeepers

Initiators

Buyers

Influencers

Deciders

Users

Approvers

Major Influences on Industrial Buying Behavior

•Level ofdemand

•Economicoutlook

•Interest rate•Rate of techno-logical change

•Political andregulatorydevelopments

•Competitivedevelopments

•Social responsi-bility concerns

Environmental

•Objectives

•Policies

•Procedures

•Organizationalstructures

•Systems

Organizational

•Interests

•Authority

•Status

•Empathy

•Persuasive-ness

Interpersonal

•Age•Income•Education•Job position•Personality•Risk attitudes•Culture

Individual

BusinessBuyer

Problem RecognitionProblem Recognition

General Need DescriptionGeneral Need Description

Product SpecificationProduct Specification

Supplier SearchSupplier Search

Proposal SolicitationProposal Solicitation

Supplier SelectionSupplier Selection

Order Routine SpecificationOrder Routine Specification

Performance ReviewPerformance ReviewPostPost

PurchasePurchase

PurchasePurchase

InfoInfoSearch/Search/

EvalEval

NeedNeedRecognitionRecognition

Government MarketsGovernment Markets

Domestic SuppliersDomestic Suppliers

Open BidsOpen BidsCost MinimizationCost Minimization

Public ReviewPublic Review

PaperworkPaperwork