Consumer buyer behavior

Buying behavior of final consumers

Consumer market

All the individuals and households that buy or acquire goods and services for personal consumption

Culture

Set of basic values, perceptions, wants, and behaviors learned by an individual from family and other important institution

Subculture

Group of people with shared value systems based on common life experiences and situations • Total market strategy integrates ethnic themes and cross- cultural perspectives within a brand’s mainstream marketing

Social class

Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behavior

Social Factors

• Groups • Word-of-mouth influence • Opinion leaders • Online social networks • Family • Roles and status

Personal Factors (1 of 2)

• Occupation • Age and family life-cycle • Economic situation • Lifestyle • Personality and self-concept

Psychological Factors

• Motivation • Perception • Learning • Beliefs and Attitude

Stages in the buyer decision process

– Need recognition – Information search – Alternative evaluation – Purchase decision – Postpurchase behavior

Stages in the Adoption Process

• Awareness • Interest • Evaluation • Trial • Adoption

Characteristics Influencing an Innovation’s Rate of Adoption

• Relative advantage • Compatibility • Complexity • Divisibility • Communicability

The diffusion process for new products

Innovators, early adopters, early mainstream, late mainstream, or lagging adopters

Business buyer behavior

Purchasing goods and services are used in the production of other products and services

Business-to-business (B-to-B) marketers

must understand business markets and business buyer behavior

Business buying process

Determining which products and services to purchase – Finding, evaluating, and choosing among alternative suppliers and brand

Business Markets

• Business markets are huge and involve more money and items than consumer markets. • Differ from consumer markets in terms of – Market structure and demand – Nature of the buying unit – Types of decisions and the decision process

Business market structure and demand

– Fewer but larger buyers – Derived demand: Business demand that comes from the demand for consumer goods – Inelastic and fluctuating demand

Nature of the Buying Unit

• Nature of the business market buying unit – More decision participants – More professional purchasing effor

Types of Decisions

• Business purchases – More complex buying decisions – Large sums of money – Complex technical and economic considerations – Interactions among people at many levels of the buyer’s organization

Decision Process

• Buying processes – Longer and more formalized procedures – Buyer and seller more dependent on each other • Supplier development: Systematic development of networks of supplier-partners to ensure a dependable supply of products and materials

Types of Buying Situations

Straight rebuy • Buyer routinely reorders something without any modifications Modified rebuy • Buyer wants to modify product specifications, prices, terms, or suppliers New task • Buyer purchases a product or service for the first time Systems selling (or solutions selling) • Buying a packaged solution to a problem from a single seller • Avoids the separate decisions involved in a complex buying situation

Participants in the Business Buying Process

• Buying center: All the individuals and units that play a role in the purchase decision-making process – Actual users of the product or service – People who make the buying decision – People and units influencing the buying decision – People who do the actual buying – Individuals and units controlling the buying information

E-Procurement and Online Purchasing

• Purchasing through electronic connections between buyers and sellers—usually online • E-procurement occurs through – Reverse auctions – Online trading exchanges – Company buying sites – Extranet links with key suppliers

Benefits and Problems of E- Procurement

• Benefits – Cuts transaction costs – Results in efficient purchasing for both buyers and suppliers – Reduces the time between order and delivery – Helps an organization keep better track of all purchases – Frees buyers from a lot of paperwork • Problems – Can affect the customer-supplier relationship – Pits suppliers against one another