ins ppt ch06

Copyright © 2012 Pearson Canada Inc.6 - 1

Understanding Consumer and Business

Buyer Behaviour

Chapter 6


Previewing the Concepts

1. Understand the consumer market and the major factors that influence consumer buyer behavior

2. Identify and discuss the stages in the buyer decision process

3. Describe the adoption and diffusion process for new products

4. Define the business market and identify the major factors that influence business buyer behavior

5. List and define the steps in the business buying decision process


Consumer Buying Behavior

• Consumer buying behavior:– The buying behavior of individuals and

households who buy goods and services for personal use

– These people make up the consumer market

• The central question for marketers is:– How do consumers respond to various

marketing efforts the company might use?

Copyright © 2012 Pearson Canada Inc.6 - 4 Copyright © 2010 Pearson Education Canada

Influences on Consumer Behaviour

4

Psychological

Personal

Social

Cultural

Consumer

Marketing Mix• Product• Price• Marketing Communications• Distribution

Company• Image• Reputation


Consumer Buying Behavior

• Factors influencing consumer behavior:


Culture

• Culture is the most basic cause of a person’s wants and behavior– It is learned from family, church, school,

peers, colleagues– Culture reflects basic values, perceptions,

wants, and behaviors– Cultural shifts create opportunities for new

products or may otherwise influence consumer behavior


Subculture

• Subculture:– Groups of people with shared value systems

based on common life experiences

• Major subculture groups:– Regional subcultures– Founding nations– Ethnic subcultures– Mature consumers


Social Class

• Social class:– Society’s relatively permanent and ordered

divisions whose members share similar values, interests, and behaviors

– Measured by a combination of occupation, income, education, wealth, and other variables

– People within a given social class tend to exhibit similar buying behaviour


Social Factors

• Groups and social networks:– Membership, reference, and aspirational

groups• Marketers attempt to reach opinion leaders, people

who exert social influence on others• Opinion leaders are recruited as brand

ambassadors or for buzz marketing

– Online social networks allow marketers to interact with consumers

• IKEA and Buzz Marketing• http://www.youtube.com/watch?v=zdd7-kHrvps


Reference Groups

12

“A group of people with a common interest that influences its members’ attitudes and behaviour.”

Reference groups (peers) are a strong influence among young people.

The hip hop community (hip hop musicians) is one of the biggest brand building communities in the world.


Characteristics Affecting Consumer behaviour

Groups and Social Networks


Social Influences on Consumer Decisions

• Green Marketing– Growing -70% of

Canadians buying more environmentally friendly products than they did one year ago

– Becoming mainstream


Social Factors

• Family:– Strongly influences buying behavior– Gender stereotypes for certain types of

purchases are changing– Children have strong influence on family

buying decisions

• Roles and status:– Role = Expected activities– Status = Esteem given to role by society


Family

16

The changing roles of adults means marketers can no longer make assumptions about who the primary buyer is.

1. Major decisions are shared decisions.

2. Major retailers are reconfiguring to appeal more to women.

3. Wal-Mart Supercentres are specifically designed for women 30 to 45 with 2 or 3 children, a husband and a career.

4. Children influence $20 billion in family spending each year in Canada.


Cultural Influences

17

Culture refers to “behaviour learned from external sources such as family, the workplace, and education—that help form the value systems an individual lives by.

Gen X, Gen Y, Boomers

Ethnic Groups

French Quebec Marketing strategies must be tailored to the unique needs of different groups.


Personal Factors

• Age/life-cycle stage:– People change the goods they buy over their

lifetimes

• Occupation:– Occupation affects the goods and services

bought

• Economic situation:– A person’s economic situation affects store

and product choices


Personal Factors

• People within the same subculture, social class, and occupation may have different lifestyles

• Lifestyle:– Pattern of living as expressed in his or her

activities, interests, opinions

• People buy the values and lifestyles products represent


Lifestyle

20

A person’s pattern of living expressed in terms of activities, interests, opinions and values.

Independent research companies conduct surveys and place people in lifestyle segments.

• Protective Providers• Up an Comers• Les “Petite Vie”• Mavericks• Contented Traditionalists• Joiner Activists• Passive Malcontents• Tie-Dyed Greys

Each segment is motivated by a unique set of attitudes and beliefs.

Source: Millward Brown Goldfarb


Personal Factors

• Personality: – The unique psychological characteristics that

distinguish a person or group– Generally defined in terms of traits– Self-concept theory suggests that people’s

possessions contribute to and reflect their identities

– Brands may also have personalities


Psychological Factors

• Motivation: – A motive (or drive) is a need that is sufficiently

pressing to direct the person to seek satisfaction

– Maslow’s hierarchy of needs explains why people are driven by needs at particular times



• Maslow’s hierarchy of needs:– Physiological needs– Safety needs– Social needs– Esteem needs– Self-actualization

• Hierarchy implies that lower level needs (physiological) must be satisfied first


Maslow’s Hierarchy of Needs


Psychological Factors• Perception:

– Process by which people select, organize, and interpret information to form a meaningful picture of the world

– Perception can be influenced by:• Selective attention is the tendency for people to

screen out most of the information to which they are exposed

• Selective distortion is the tendency for people to interpret information in a way that will support what they already believe

• Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands



• Learning:– Changes in an individual’s behavior arising

from experience– Occurs due to an interplay of drives, stimuli,

cues, responses, and reinforcement– Behaviors with rewarding results tend to be

repeated


Beliefs and Attitudes

• Belief: – A descriptive thought that a person holds

about something

• Attitude:– A person’s consistently favorable or

unfavorable evaluations, feelings, and tendencies toward an object or idea


Buyer Decision Process

• There are five stages in the buyer decision process:1. Need recognition

2. Information search

3. Evaluation of alternatives

4. Purchase decision

5. Postpurchase behavior


Need Recognition/Information Search

• Need recognition can be triggered by internal or external stimuli

• Several sources of information may be used during information search:– Personal sources– Commercial sources– Public sources– Experiential sources


• Physical environment dimensions such as décor, smells, and lighting

• Arousal and pleasure determine consumers’ reaction to store environment

• Time

Situational Influences on Consumer Decisions


Evaluation of Alternatives / Purchase Decision

• Evaluation of alternatives depends upon the specific buying situation and the individual consumer

• Two factors may come between the purchase intention and purchase decision: – Attitudes of others– Unexpected situational factors


Post Purchase Behavior

• Consumer satisfaction is a function of consumer expectations and perceived product performance– Performance < Expectations = Disappointment– Performance = Expectations = Satisfaction– Performance > Expectations = Delight

• Cognitive dissonance: – Discomfort caused by postpurchase conflict


Stages in the Adoption Process

• Awareness: Consumer becomes aware of the new product, but lacks information

• Interest: Consumer seeks information about new product

• Evaluation: Consumer considers whether trying the new product makes sense

• Trial: Consumer tries new product on a small scale to determine its value

• Adoption: Consumer decides to make regular use of the new product


Adopter Categorization

• Individual differences influence the speed people will try new products, yielding five adopter categories:– Innovators– Early adopters– Early majority– Late majority– Laggards


Rate of Adoption

• Relative advantage: Is the innovation superior to existing products?

• Compatibility: Does the innovation fit the values and experience of the target market?

• Complexity: Is the innovation difficult to understand or use?

• Divisibility: Can the innovation be used on a limited basis?

• Communicability: Can results be easily observed or described to others?


Business Markets and Buyer Behavior

• Business buyer behavior:– The buying behavior of organizations that buy

goods and services for the production of other products/services or to resell or rent them to others for a profit

• Business market is huge and involves far more dollars and items than consumer markets


Business Markets

• Market structure and demand:– Contains far fewer but larger buyers– Business demand is derived from consumer

demand– Business markets have more fluctuating

demand

• Nature of the buying unit:– Business purchases involve more decision

participants and a more professional purchasing effort


Business Markets

• Key differences exist between business and consumer buying situations:– Business buyers usually face more complex

buying decisions– The business buying process tends to be

more formalized– Buyers and sellers are much more dependent

on each other in business markets


Types of Buying Situations

• Straight rebuy: Buyer routinely reorders something without any modifications

• Modified rebuy: Buyer modifies product specifications, prices, terms, or suppliers

• New task: Buyer purchases a product or service for the first time

• Systems (solution) selling is becoming more common


Participants in the Business Buying Process

• A buying center is all the individuals and units that participate in the purchase decision-making process– The buying center is not a fixed or formally

identified unit– The size and makeup will vary for different

products and different situations


Influences on Business Buyers

• Major influences on business buyer behaviour:


The Business Buying Process

• Stages of the business buying process:


E-procurement

• Online purchasing (e-procurement) can be implemented in many ways:– Reverse auctions– Trading exchanges– Company buying sites– Extranet links with key suppliers

• E-procurement presents several benefits and problems


Reviewing the Concepts

1. Understand the consumer market and the major factors that influence consumer buyer behavior

2. Identify and discuss the stages in the buyer decision process

3. Describe the adoption and diffusion process for new products

4. Define the business market and identify the major factors that influence business buyer behavior

5. List and define the steps in the business buying decision process

ins ppt ch06

Technology

behavior consumer

consumer behavior

groups of people

consumer behaviour groups

social factors groups

consumer buyer behavior

behavior factors

social factors family