Consumer & Business Buyer Behaviour

Consumer & Business Buyer Behaviour

Chapter 6

Agenda 

Consumer Market and Major Factors that Influence Consumer Buying Behavior – –



Business Market and Major Factors that Influence Business Buyer Behavior –

 

Consumer Buying Decision Process Adoption and Diffusion Process for New Products

Business Buying Decision Process

Term Project and Term Project Proposal Next Class

Two Types of Markets:  Consumer  Business

Think about Starbucks 

 



Why are consumers willing to pay $2.00 for a cup of coffee? Who are Starbucks’ target markets? What is the marketing communication message Starbucks wants to convey? Why has Starbucks been successful?

Understanding the Consumer Market

Product Price Place Promotion Marketing and other stimuli Economic Technological Political Cultural

Buyer’s Black Box Buyer Characteristics Buying Decision Process

Buyer’s Responses

Product choice Brand choice Dealer choice Purchase timing Purchase amount

Figure 6-1

Traditional factors affecting consumer purchasing behaviors        

Demographics (age, gender, income, etc.) Heredity and home environment Family life cycle Life changing events Cultural environment Social environment Situational environment Psychological Factors

Maslow’s Hierarchy of Needs Different

types of needs drive behaviour to satisfy those needs in an order of precedence Most basic needs fulfilled first

SelfActualization Esteem Social Safety Physiological

Please refer to Question #3 on Page 250 of your Text  Think

about a specific major purchase you’ve made recently.  What buying process did you follow?  What major factors influenced your decision?

Consumer Decision-Making Process Problem Recognition Information Search Evaluation of Alternatives

Purchase Decision Postpurchase Evaluation

Information Search

Two ways of gathering information: 1. Internally 2. Externally 

Types of info sources:    

Commercial Public Personal Experiential

The Purchase Decision Decision to purchase a particular product may be based on several factors: Attitudes of Others Unexpected Situational Factors What

other factors influence the Purchase Decision?

Postpurchase Evaluation



Evaluation of product performance.



Cognitive dissonance.



Impacts future purchases.



Impacts word-of-mouth communications.

Stages in the New Product Adoption Process  Adoption –

process:

the mental process through which an individual passes from first hearing about an innovation to final adoption

 Consists

of 5 Stages (These are exactly as they indicate): – – – – –

Awareness Interest Evaluation Trial Adoption

New Product Adoption RatesFigure 6-5

13.5% 2.5% Innovators

Early adopters

34% 34% Early majority

Late majority

16% Laggards

Time of adoption of innovations Source: reprinted with permission of the Free Press, a Division of Simon & Schuster, from Diffusion of Innovations, Fourth Edition, by E.M. Rugers, 1983.

Influences on the Rate of Adoption 

Relative advantage –



Compatibility –



Ease of understanding?

Divisibility –



Fit current values and experiences?

Complexity –



How much better than existing alternatives?

Can it be tried on a limited basis?

Communicability –

Can the innovation be observed and communicated?

Two Types of Markets:  Consumer  Business

Distinguishing Characteristics of Business Markets     

Concentrated Demand Derived Demand Purchasing Professionals Multiple Buying Influences Close Buyer-Seller Relationships

Business-to-Business Buying Process  Identification

of a need  Establishment of specifications.  Identification of alternatives.  Identification of vendors.  Evaluation of vendors.  Selection of vendors.  Negotiate purchase terms.

Influences on the Business Buying  Organization –

Buying centre, structure and systems, resources, goals, environment and policies

 Individual –

Position, age, education, social situation, attitude about risk, etc.

 Environmental –

Demand for the product, other external environmental factors (i.e., regulatory, technology, competition)

Types of Purchasing Decisions 

Straight Rebuy Buying Situation –



Modified Rebuy Buying Situation –



Routine Response Behavior

Limited Problem Solving

New Task Buying Situation –

Extensive Problem Solving

Characteristics of the Three Types of Buying Decisions Straight Modified Rebuy Rebuy Newness of Problem or Need Low Information Requirements Minimal Information Search Minimal Consideration of New Alternatives None Multiple Buying Influence Very Small Financial Risks Low Routine response

New Task

Medium Moderate Limited Limited Moderate Moderate

High Maximum Extensive Extensive Large High

Limited prob. solving

Extended prob solving

Multi-Attribute Model The base score

The weight

Assessment of Product or Supplier Performance (P)

Assessing the Relative Importance of Each Characteristic (I)

Example of the Multi-Attribute Model Process Vinyl Fabric

Nylon Velvet Fabric

Characteristi Performa Importanc PxI c nce e Score Weight

Performa Importanc PxI nce e Score Weight

Comfort

5

9

45

8

9

72

Durability

7

8

56

8

8

64

Guarantee

7

8

56

8

8

64

10

6

60

1

6

6

Price Evaluation Score

217

206

Next Class  Read

Chapter 7: Market Segmentation, Targeting, and Positioning  Complete Exercises 1,2,and 3 on page 295