Lecture 7 Buyer Behaviour1

8/12/2019 Lecture 7 Buyer Behaviour1

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Warwick Business School

Professor Lloyd C. Harris


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Objectives for this Session

1. Construct model of both consumer and business buyerbehavior

2. Identify the major factors that influence consumer buyerbehavior

3. List and understand the major types of buying decisionbehavior and the stages in the consumer buyer decisionprocess

4. Identify the major factors that influence business buyer

behavior5. List and define the steps in the business buying-decision

process6. Explain how business markets differ from consumer markets


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Stimuli

Marketing stimuli consists ofthe 4 Ps

Product

Price

Place

Promotion

Other stimuli include:

Economic forces

Technological forces Political forces

Cultural forces


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The Consumer Black Box

Needrecognition

Information Search

Evaluationof alternatives

Purchasedecision

Post purchasebehaviour

Feedback

CulturalInfluences

SocialInfluences

PersonalInfluences

PsychologicalInfluences

Possible Influences on the Decision Process

Consumer Buyer Decision Process


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Characteristics Affecting Consumer Behavior I

1. Cultural factorsCulture is the learned values, perceptions, wants, and

behavior from family and other important institutions.

Subculture are groups of people within a culture with sharedvalue systems based on common life experiences andsituations

E.g. Gamers


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Characteristics Affecting Consumer Behavior II

1. Cultural factors (continued)Social Class



Characteristics Affecting Consumer Behavior III

2. Social Factors/Influences

Group memberships

Family

Roles

Initiators

Influencers

Deciders Buyers

User



Characteristics Affecting Consumer Behavior IV

3. Personal Factors/Influences

Age and life-cycle stage

Occupation

Economic situationLifestyle (psychographics AIO)Personality and self-concept (actual, ideal andothers)


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Characteristics Affecting Consumer Behavior V

4. Psychological Factors/Influences

Learning

Beliefs and attitudes

Motivation


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Abraham Maslows Hierarchy of Needs

Physiological needs

Social needs

Safety needs

Esteem needs

Selfactualization needs

Cognitive needsAesthetic needs


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Characteristics Affecting Consumer Behavior VI

Psychological Factors/Influences (continued)

Perception Selective attention is the tendency for people to

screen out most of the information to which theyare exposed Selective distortion is the tendency for people to

interpret information in a way that will supportwhat they already believe

Selective retention is the tendency to remembergood points made about a brand they favor and toforget good points about competing brands


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Types of Buying Decision Behaviour

Involvement

D i f f e r e n t i a t i o n

b e t w e e n

b r a n

d s

Low

Differentiation

HighDifferentiation

Variety SeekingBuying Behaviour

ComplexBuying Behaviour

HabitualBuying Behaviour

Low InvolvementHigh Involvement

Dissonance ReducingBuying Behaviour


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The Consumer Buyer Decision Process I

Five stages in the buyer decision process:

1. Need recognition

2. Information search3. Evaluation of alternatives

4. Purchase decision5. Post-purchase behavior


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The Consumer Buyer Decision Process II

Needrecognition

Information Search

Evaluationof alternatives

Purchasedecision

Post purchasebehaviour

Feedback


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The Consumer Buyer Decision Process III

1. Need Recognition

Need recognition occurs when the buyer recognizesa problem or need triggered by:

Internal stimuli

External stimuli


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The Consumer Buyer Decision Process IV

2. Information Search

Sources of information: Personal sources Commercial sources Public sources Experiential sources


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The Consumer Buyer Decision Process V

3. Evaluation of Alternatives

Evaluation of alternatives is how theconsumer processes information toarrive at brand choices


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The Consumer Buyer Decision Process VII

4. Purchase Decision

The purchase decision is the act by the consumer

to buy the most preferred brand

The purchase decision can be affected by: Attitudes of others Unexpected situational factors


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The Consumer Buyer Decision Process VIII

5. Post-Purchase Evaluation

The post-purchase evaluation is the satisfaction or

dissatisfaction the consumer feels about thepurchase

Relationship between:

Consumers expectations Products perceived performance


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Stimulus-Response Model of Consumer Behavior

Marketing andother stimuli

Marketing Mix Marketing

Environment

Buyer's BlackBox

Buyerscharacteristics

Buyer's decision process

Buyer Responses Product choice Brand choice Dealer choice Purchase timing Purchase amount


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Stimulus-Response Model of Business Buyer Behavior



Environment

BuyingOrganization


BuyingDecisionProcess

Buying Centre


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Stimulus-Response Model of Business Buyer Behavior



Environment

Buyer's BlackBox

Buyerscharacteristics

Buyer's decision process



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Business Buyer Behavior I

Marketing Stimuli

Product Price Place Promotion

Other Stimuli:

Political Economic Technological Cultural Competitive


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Business Buyer Behavior II

Buyer Responses to Marketing Stimuli

Product or service choice

Supplier choice

Order quantities

Delivery

Service Payment terms


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The Business Buyer Black Box

Problemrecognition

General NeedDescription

ProductSpecification

SupplierSearch

SupplierSelection

EnvironmentalInfluences

OrganizationalInfluences

InterpersonalInfluences

IndividualInfluences


Business Buyer Decision Process

Order-RoutineSpecification

PerformanceReview

ProposalSolicitation


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Business Buyer Behavior IV

Participants in the Business Buying Process

Buying center is all of the individuals and units that

participate in the business decision-making process Users Influencers Buyers

Deciders Gatekeepers


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Major Influences on Business Buyers I

Demand for product

Economic outlook

Cost of money

Resource availability

Technology

Culture

Politics

Competition

1. Environmental Factors


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Major Influences on Business Buyers II

2. Organizational Factors Objectives

Policies Procedures

Structure

Systems

3. Interpersonal factors Influence

Expertise Authority

Dynamicss


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Major Influences on Business Buyers III

4. Individual Factors

Age/Education

Job positionMotives

Personality

Buying style


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The Business Buyer Decision-making Process II

1. Problem recognition occurs when someone in the companyrecognizes a problem or need

Internal stimuli

Need for new product or production equipment

External stimuli

Idea from a trade show or advertising

2. General need description describes the characteristics andquantity of the needed item


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The Business Buyer Decision-making Process IV

6. Supplier selection is the process when the buying centercreates a list of desired supplier attributes and negotiateswith preferred suppliers for favorable terms and conditions

7. Order-routine specifications is the final order with the chosensupplier and lists all of the specifications and terms of thepurchase

8. Performance review involves a critique of supplierperformance to the purchase terms


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The Business Buyer Black Box

Problemrecognition

General NeedDescription

ProductSpecification

SupplierSearch

SupplierSelection

EnvironmentalInfluences

OrganizationalInfluences

InterpersonalInfluences

IndividualInfluences


Business Buyer Decision Process

Order-RoutineSpecification

PerformanceReview

ProposalSolicitation


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Key Differences between B2C and B2B Marketing I

Key characteristics

Consumer markets B2B Markets

Nature of relationship Transactional(?)/Tactical Dependent/Strategic

Geographic concentration Low High*

Number of decisionmakers

Small Large

Length of decision time Short and simple* Long and complex

Size of purchase Small quantities Large in value and volume

Nature of Demand Fluctuating Inelastic


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Lecture 7 Buyer Behaviour1

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