Haas School Of Business

Haas School of Business

ugba 106 Marketing Lecture 6: Buyer Behavior

David Robinson faculty.haas.berkeley.edu/robinson/ugba106

© D. Robinson, 2009

Part 1: Consumer Buyer Behavior • • • • • •

Definitions of the term Different types of customers Model for new product adoption Social Influences on behavior Problem solving Limited problem-solving

“Buyer Behavior” • Refers to the steps purchasers go through before buying • Attempts to understand their thinking (unobservable)

(Editorial Opinion on the A&K Text Ch. 5) 1.

Psychological theories are not very helpful for marketing managers, e.g. Stimulus-response, Freudian, and Maslow (p. 142, 143 etc)

2.

The approach I use could be described as “cognitive”

It’s helpful to remember there are different types of customers Don’t need product class

The key is that each type of customer (and potential customer) is going to need a different Marketing Strategy

Not yet buying

Not yet users

Buy from others

Customer

Occasional

Regular

Loyal

It’s helpful to remember there are different types of customers Conversion of prospects

Brand switching

Don’t need product class Not yet buying

Not yet users

Buy from others

Customer

Occasional

Regular

Loyal

It’s helpful to remember there are different types of customers Even existing customers can be segmented and need a different Marketing Strategy Buy more often!

Customer

Buy more when you buy!

Occasional

Regular Don’t leave me!

Loyal

Consumer Behavior Why some people buy from us. . . and others don’t—even when we think we have a compelling value proposition

Part I: Influences on Buying

Factors Affecting Consumer Buying (A&K Fig 5.2)

Probably more important than most Americans are prepared to admit

Factors Affecting Consumer Buying So-called “Aspirational Group”

Factors Affecting Consumer Buying

Opinion leaders have a social influence

Life stage and cohort more important than age per se

Factors Affecting Consumer Buying

Do you consider yourself “Tech Savvy”? a “Geek”? Fashion-forward or “Classic?

Factors Affecting Consumer Buying “Lifestyle” Marketing

Lifestyle Marketing • “AIO” dimenisions: • Activities • Interests • Opinions

Factors Affecting Consumer Buying Frankly, not very useful

Part II: Models of Buying Behavior

Consumer Buying Behavior Consumer Purchase

Low involvement

Repurchase

Major Purchase

New Product Adoption

Repurchase Behavior for Mature Products

Consumer Buying Behavior Consumer Purchase

Low involvement Habitual Repurchase Variety Seeking

Habitual or Variety Seeking ?

Habitual

Variety Seeking

1. Varies between customers (some seek more thrills) 2. Some products are more likely to be “habitual” 3. No way to predict it—just ask the question and observe it:

Habitual or Variety Seeking ? • Yoghurt

• Deodorant

What Strategy ? 1. Availability 2. Channel relations 3. Ward off competitors

Habitual

Variety Seeking a. Provide variety within the brand (yoghurt), or b. Live with it (restaurants)

Consumer Buying Behavior Consumer Purchase

Low involvement

Repurchase

Major Purchase

New Product Adoption

Model for new product adoption, CPG*s (not “major purchases”)

Awareness

Interest

Trial

* CPGs: Consumer Packaged Goods

Repeat

Making use of the New Product Adoption Model Awareness

Interest

1. No awareness 2. Awareness but no interest 3. Interest but no trial 4. Trial and low repeats

Trial

Repeat

Consumer Buying Behavior Consumer Purchase

Low involvement

Major Purchase

Extensive Search Model

Buyer Decision Process (Applies to major purchases, not routine)

1. Become aware of the problem (ads help!) 2. Gather information - search (shopping?) 3. Evaluate alternatives 4. Make decision 5. Post-purchase behavior (possible dissonance)

Extensive Search Model

See text at p. 146

Total set

Awareness set

Consideration

Choice set

Decision

Extensive Search Model

Availability, price, features

Total set

Critical: Advertising etc.

Awareness set

Consideration

Performance, value proposition

Choice set

Decision

Summary of Consumer Behavior (from a “case” perspective) 1. 2.

Major purchase or “low involvement” ? If low involvement, a. b.

3. 4.

Habitual Variety seeking

If a Major Puchase, get into the consideration set, then have the best value proposition Think, what are the influences here? a. b.

Do product attributes dominate, or social influences (groups), opinion leaders? Are “image” benefits important?

Admin for Week 6

Buyer Behavior in Business Markets

Business vs. Consumer Markets • • • • • • •

Fewer buyers Larger buyers Close supplier-customer relationship Geographically concentrated Derived demand Inelastic demand Fluctuating demand

Business vs. Consumer Markets • Professional purchasing • Gifts and golf trips really don’t work

• • • •

Multiple buying influences Long time frame …multiple sales calls May involve reciprocity or partnership Financing likely to be a “reason to buy”

K&A Fig. 5.7

Three Types of Business Buying Type

Problem/Opportunity

1. Straight re-buy

1. Hard to be even considered

2. Modified re-buy

2. Convince customer there’s a problem and a need to change the specs

What is systems buying?

3. New task buying

3. Reach the influencers

Business Buying Process (Fig 5.9 of the text) How do we get “awareness”?

Note that in B2B, the customer may specify the product

Some “tricks” with Institutional Buyer Behavior 1. Buyer may not be aware of the problem that needs to be solved Important (e.g. Haas networked copiers) 2. Most buyers have budget cycles and “no approval necessary” price points 3. The key is to get on the bid list and provide exactly what the customer wants 4. B2B salespeople work lists (find one good customer, get two more like that)

Summary: Buyer Behavior • Ask the question: “What’s the buyer behavior here?” • Understand that it’ll be different depending on the product class • Believe the new product “Awareness, Interest . . .” model, and do your research