consumer buying process & organizational buying behavior

Consumer Buying Process & Organizational buying

behavior

Marketing ManagementA South Asian Perspective, 13th ed

Marketing Management By: Rafana. Kazi

What Influences Consumer Behavior?

Cultural FactorsCultural Factors

Social FactorsSocial Factors

Personal FactorsPersonal Factors


What is Culture?

Culture is the fundamental determinant of a person’s wants and behaviors

acquired through socialization processes with family and other key

institutions.


Subcultures

Nationalities Nationalities

ReligionsReligions

Racial groupsRacial groups

Geographic regionsGeographic regions


Social Classes

Upper uppersLower uppersUpper middlesMiddle class

Working classUpper lowersLower lowers


Characteristics of Social Classes

• Within a class, people tend to behave alike

• Social class conveys perceptions of inferior or superior position

• Class may be indicated by a cluster of variables (occupation, income, wealth)

• Class designation is mobile over time


Social Factors

Referencegroups

Social roles

Statuses

Family


Reference Groups

Membership groupsMembership groups

Primary groupsPrimary groups

Secondary groupsSecondary groups

Aspirational groupsAspirational groups

Dissociative groupsDissociative groups


Roles and Status

What degree of status is associated with various occupational roles?


Personal Factors

Age

Values

Life cyclestage

Occupation

Personality

Self-concept

Wealth

Lifestyle


The Family Life Cycle


Brand Personality

SinceritySincerity

ExcitementExcitement

CompetenceCompetence

SophisticationSophistication

RuggednessRuggedness


Lifestyle Influences

Multi-tasking

Time-starved

Money-constrained


(Lifestyles of Health and Sustainability) Market Segments

• Sustainable Economy

• Healthy Lifestyles

• Ecological Lifestyles

• Alternative Health Care

• Personal Development


Model of Consumer Behavior


Key Psychological Processes

Motivation

MemoryLearning

Perception


Motivation

Freud’sTheory

Behavioris guided by subconsciousmotivations

Maslow’sHierarchyof Needs

Behavioris driven by the lowest, unmet need

Herzberg’sTwo-Factor

Theory

Behavior isguided by motivating

and hygienefactors


Perception

Selective Attention

Subliminal Perception

Selective Retention

Selective Distortion


State Farm Mental Map


Consumer Buying Process

Problem Recognition

Information Search

Evaluation

Purchase Decision

PostpurchaseBehavior


Problem Recognition


Sources of Information

Personal

ExperientialPublic

Commercial


Successive Sets Involved in Consumer Decision Making


Sales and ProductLife Cycle


Stages between Evaluation of Alternatives and Purchase


Non-Compensatory Models of Choice

• Conjunctive

• Lexicographic

• Elimination-by-aspects


Perceived Risk

FunctionalFunctional

PhysicalPhysical

FinancialFinancial

SocialSocial

PsychologicalPsychological

TimeTime


How Customers Use and Dispose of Products


Rural Consumer Behaviour

• Rural consumers are more brand loyal• Restrictions on consumption• Collective consumption behaviour: for

family rather than individual• Seasonality of consumption based on

seasonality of agricultural production/income

• Specific patterns in the five-stage buying decision process


Mental Accounting

• Consumers tend to…

• Segregate gains

• Integrate losses

• Integrate smaller losses with larger gains

• Segregate small gains from large losses


What is Organizational Buying?

Organizational buying refers to the decision-making process by which formal organizations establish the need for purchased products and services, and identify, evaluate, and

choose among alternative brands and suppliers.


Top Business Marketing Challenges

• Expand understanding of customer needs• Compete globally as China and India

reshape markets• Master analytical tools and improve

quantitative skills• Reinstate innovation as an engine of growth• Create new organizational models and

linkages


Characteristics of Business Markets

• Fewer, larger buyers

• Close supplier-customer relationships

• Professional purchasing

• Many buying influences

• Multiple sales calls• Derived demand• Inelastic demand• Fluctuating demand• Geographically

concentrated buyers• Direct purchasing


Buying Situation

Straight rebuyStraight rebuy

Modified rebuyModified rebuy

New taskNew task


Systems Buying and Selling

Turnkey solution desired;

bids solicited

Primecontractors

Second-tiercontractors

System subcomponents

assembled


The Buying Center

InitiatorsInitiators

UsersUsers

InfluencersInfluencers

DecidersDeciders

ApproversApprovers

BuyersBuyers

GatekeepersGatekeepers


Of Concern to Business Marketers

• Who are the major decision participants?

• What decisions do they influence?

• What is their level of influence?

• What evaluation criteria do they use?


Sales Strategies

Small Sellers

Large Sellers

Key Buying Influencers

MultilevelIn-depthSelling


Stages in the Buying Process: Buyphases

• Problem recognition• General need description• Product specification• Supplier search• Proposal solicitation• Supplier selection• Order-routine specification• Performance review


Methods of e-Procurement

• Websites organized using vertical hubs

• Websites organized using functional hubs

• Direct extranet links to major suppliers

• Buying alliances

• Company buying sites


Vendor Analysis


Handling Price-Oriented Customers

Limit quantity purchasedLimit quantity purchased

Allow no refundsAllow no refunds

Make no adjustmentsMake no adjustments

Provide no servicesProvide no services


Methods for Researching Customer Value

• Internal engineering assessment

• Field value-in-use assessment

• Focus-group value assessment

• Direct survey questions

• Conjoint analysis• Benchmarks• Compositional

approach• Importance ratings


Order Routine Specification

Stockless purchase plans

Vendor-managedinventory

Continuous replenishment


Establishing Corporate Trust and Credibility

Expertise

LikeabilityTrustworthiness


Trust Dimensions

Transparent

Product/ServiceQuality

Incentive

Partnering

Cooperating Design

Product Comparison

Supply Chain

Pervasive Advocacy


Factors Affecting Buyer-Supplier Relationships

Availability of alternatives

Supply marketdynamism

Complexity ofsupply

Importance ofsupply


Categories of Buyer-Seller Relationships

• Basic buying and selling

• Bare bones• Contractual

transaction• Customer supply

• Cooperative systems

• Collaborative• Mutually adaptive• Customer is king

consumer buying process & organizational buying behavior

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