Understanding Consumer Behaviour Patterns

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Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by Rix Slides prepared by Joe Rosagrata Understanding Consumer and Business Markets Chapter 5

Transcript of Understanding Consumer Behaviour Patterns

Page 1: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Understanding Consumer and Business Markets

Chapter 5

Page 2: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

The consumer market Geographic distribution, frequently divided

into rural, urban, and suburban. Demographics, the vital statistics that

describe a population. In particular: Age. Gender. Family life cycle. Education. Income distribution. Ethnicity.

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Page 3: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata 5-2

Page 4: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Family life cycle Family life cycle will determine the purchase

behaviour of individuals and reason for purchase.

Single parent and two-parent family. Young couples no children. Family (usually two adults, two young

children). Family with teenagers. Multi-cultural (or mixed) family.

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Page 5: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Situational influences Situational influences are the temporary

forces associated with the immediate purchase environment that affect behaviour• When consumers buy—the time

influence. (day, week, season).• Where consumers buy—the place a

decision is made (home, point of purchase).

• How consumers buy—the way in which consumers buy (bulk etc).

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Page 6: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

BUYING-DECISION PROCESS

Need recognition

Identification of alternatives

Evaluation of alternatives

Purchase and related decisions

Post-purchase behaviour

INFORMATION

Commercialsources

Social sources

SITUATIONALFACTORSWhen consumers buyWhereconsumers buy

Why consumers buyConditions under whichconsumers buy

PSYCHOLOGICAL FORCES

MotivationPerceptionLearning

PersonalityAttitude

SOCIAL ANDGROUP FORCES

CultureSubcultureSocial class

Reference groupsFamily and households

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Page 7: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Consumer buying behaviour influences

There are five main Buying Behaviour factors which influence consumer’s decision-making. Motivation. Perception. Learning. Personality. Self-concept.

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Page 8: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Consumer buying behaviour influences (cont.)

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Page 9: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Four demand characteristics that differentiate the business market from the consumer market Demand is derived from the demand for the

ultimate consumer products in which the business product is finally used (e.g. steel).

In the short run demand is inelastic, that is, demand for a product responds very little to changes in price when: The cost of a single part or material is a

small portion of the total cost of the finished product.

If the part or material has no substitute.

Copyright © 1997 by The McGraw-Hill Companies, Inc.5-8

Page 10: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Four demand characteristics that differentiate the business market from the consumer market (cont.)

Demand is widely fluctuating, meaning that demand for most classes of business goods fluctuates considerably more than the demand for consumer products.

The buyers are well informed and know the relative merits of alternative sources of supply and competitive products.

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Page 11: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Influences on business-market demand

The number and types of potential business users.

Their buying power, buying motives, and buying habits.

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Page 12: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Key differences between the business market (BM) and consumer (CM) market

Small number of BMs.

BMs have larger purchasing power and buy in quantity.

BMs are concentrated. CMs are not.

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Page 13: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Key differences between the business market (BM) and consumer (CM) market (cont.)

Sellers deal direct with business users. BMs are usually regionally concentrated. BMs can be vertically or horizontally

concentrated. BM’s buying motives are rational and

purchase is methodical and objective.

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Page 14: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

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.

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Page 15: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Types of buying situations (cont.)

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.

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Page 16: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Types of buying situations(cont.)

3. Modified re-buy Situation in which the buyer wants to

change (modify) the product specifications, price, terms, or suppliers.

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Page 17: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

A Buying Centre is all the individuals who play a part in the various buying roles and who influence buying decisions, determine product specification and make the buying decision• Users—people who actually use the

good or service.• Influencers—people who set the

specifications of, and help determine aspects of the buying decision because of their expertise, financial position, or political power.

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The buying centre

Page 18: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Deciders—the people who make the actual buying decision regarding the product and supplier.

Gatekeepers—people who control the flow of purchasing information within the organisation, as well as between the firm and potential vendors.

Buyers—people who select the suppliers, arrange the terms of the sale and process the actual purchase orders.

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Types of buying situations(cont.)

Page 19: Understanding Consumer Behaviour Patterns

Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by RixSlides prepared by Joe Rosagrata

Buying patterns of business users

Direct purchase. Frequency of purchases. Size of order. Length of negotiated period. Reciprocity arrangements. Service expectations. Dependability of supply. Leasing instead of buying.

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