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Chapter 5

Understanding Consumer and


Business Buyer Behavior

Learning Objectives
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. Define the business market and
identify the major factors that
influence business buyer behavior
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Chapter Overview
In this chapter, we continue our marketing

journey with a closer look at the most important


element of the marketplacecustomers.
The aim of marketing is to affect how
customers think about and behave toward the
organization and its market offerings.
But to affect the whats, whens, and hows of
buying behavior, marketers must first
understand the whys.
We look first at final consumer buying
influences and processes and then at the
buying behavior of business customers.
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Introduction to Chapter 5
Definition of Consumer Buyer Behavior
Characteristic Affecting Consumer Behavior

1. Cultural (Culture, Subculture, & Social Class)


2. Social (Reference Groups, Family, and Role &
Status)
3. Personal (Age & Lifecycle, Occupation, Economic,
Lifestyle, Personality & Self Concept)
4. Psychological (Motivation, Perception, Learning,
Belief and Attitudes)
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Introduction to Chapter 5
Buyer Decision Process

Definition of Business Markets


Factors that influence business buyer behavior

1. Environmental factors
2. Organizational factors
3. Interpersonal factors
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4. Individual factors

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

Consumer Markets and


Consumer Buyer Behavior
Consumer buyer behavior refers to the

buying behavior of final consumers.


Individuals and households who buy goods

and services for personal consumption.


All of these consumers combine to make

up the consumer market.


E.g.: The American consumer market
consists of more than 300 million people.
The world consumer market consists of
more than 6.6 billion people.
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Learning Objective 2
Identify and discuss the stages in the buyer
decision process

Characteristics Affecting
Consumer Behavior

Cultural factors
a) Culture
Set of basic values, perceptions, wants
& behaviors learned by a member of
society from family & other important
institutions.
Marketers are always trying to spot cultural
shifts.
E.g.: Increasing concern about health &
fitness has created huge industry for health
& fitness services, exercise equipments,
more natural foods & variety of diet.
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Cultural factors
b) Subculture
Subcultures are groups of people with
shared value systems based on common life
experiences and situations.
Each culture contains smaller subcultures.
Subcultures include nationalities, religions,
racial groups and geographic regions.
E.g.: Mature consumersMatured
are becoming
a are
consumers
very attractive market. becoming very attractive

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market. They desire to


look as young as they
feel. So, marketers grab
the opportunity by
producing skin care
products and health

Cultural factors
c) Social Class

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Social Classes are


societys relatively
permanent and ordered
divisions whose members
share similar values,
interests, and
behaviors.
Social class is not
determined by a single
factor, but is measured as
a combination of
occupation, income,
education, wealth, and
other variables.

Social factors
a) Groups:
Reference group: serve as direct / indirect

points of reference in forming persons


behavior.
Product/brand tend to be strongest when its
visible to others whom the buyers respects.

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Social factors
b) Family:
Family members can strongly
influence buyer behavior

c)Roles and Status:

Role: Expected activities to perform according


to
the person around them. Role will carry status.
(e.g.: Role as CEO)
Status: Esteem given to role by society
(e.g.: as a manager, they will buy the clothing
that reflects their role & status)
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Personal factors
a) Age and Life-cycle Stage:
People change the goods and services they buy
over their lifetimes.
Marketers are increasingly catering to a
growing number of alternative, nontraditional
stages such as unmarried couples, singles
marrying later in life, childless couples, samesex couples, single parents, extended parents
(those with young adult children returning
home), and others.
Taste in food, clothes are often age related.

b)Occupation:
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A persons occupation affects the goods and

Personal factors
c) Economic Situation:
A persons economic situation will affect
product choice.
E.g.: Car
Toyota
Alphard

Nissan
Serena

d)Lifestyle:

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A persons pattern of living as expressed in his


or her psychographics
Pattern of living as expressed via a persons
activities (hobby/sport/social event), interests
(food/fashion), and opinions (about

Example:
Age & Life cycle

babies
Kids

Lifestyle

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beginners

older
teenagers

e) Personality & Self-concept


Personality refers to the unique psychological
characteristics that lead to relatively
consistent and lasting responses to ones
own environment.
Generally defined in terms of traits such as Sincerity
(down-to-earth, honest, wholesome, and cheerful)
Excitement (daring, spirited, imaginative, and up-todate)
Competence (reliable, intelligent, and successful)
Sophistication (upper class and charming)
Ruggedness (outdoorsy and tough)

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Personality & Self-concept


Self-concept (self image) suggests that peoples
possessions contribute to and reflect their
identities.
We are what we have
E.g.: The new Nescafe Gold is for those who
appreciate finer things in life

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Psychological factors
a) Motivation

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A motive (or drive) is a need that is


sufficiently pressing to direct the person to
seek satisfaction.
Maslow sought to explain why people are
driven by particular needs at particular times.
Person has many needs at given time such as
hunger; esteem; belonging.

Psychological factors
b) Perception

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Process by which people select, organize,


and interpret information to form a
meaningful picture of the world
People learn by the flow of information
through our
senses (sight; smell; taste;
hearing; touch)
Each of us receive, organize, & interpret
this information in different way

Psychological factors
c) Learning
When people act, they learn.
Changes in individuals behavior arising from

experience.
Strongly influenced by the consequences of
an individuals behavior
o Behaviors with satisfying results tend to be
repeated.
o Behaviors with unsatisfying results tend not to
be repeated.

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Psychological factors
d) Belief and Attitudes
A belief is a descriptive thought that a person

has about something.


May be based on real knowledge.
If some beliefs are wrong, marketer need to have
a campaign to correct them.
An attitude describes a persons relatively

consistent evaluations, feelings toward an object.


Eg : digital camera buyers will have the attitude
of Buy the Best.
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Consumer Decision-Making
Process
Need
Need Recognition
Recognition
Cultural,
Cultural, Social,
Social,
Personal
Personal and
and
Psychological
Psychological
Factors
Factors
affect
affect
all
all steps
steps

Information
Information Search
Search
Evaluation
Evaluation
of
of Alternatives
Alternatives
Purchase
Purchase
Postpurchase
Postpurchase
Behavior
Behavior

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Buyer Decision Process

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1) Need Recognition

Buyers recognize a need or problem

The NEED can be triggered by either:


a) Internal stimuli
b) External stimuli

As a result of internal (hunger/thirst)


or external stimuli
(advertisement/friend) & might you
thinking about buying a new product.
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1) Need Recognition
Int
e
Sti rnal
mu
li

al
n
r li
e
t
Ex timu
S

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Present
Present
Status
Status

Preferre
Preferre
ddState
State

Marketing helps consumers recognize


an imbalance between
present status and preferred state.

2) Information Search
Information search may or may not occur.
Consumers can obtain information from any of several sources.

Information
Sources
Personal Sources
(evaluates products
for buyers)

Description
Family, friends, neighbors,
contacts

Commercial Sources
(inform buyers)

Advertising, salespeople,
dealers, Web sites, packaging,
and displays

Public Sources

Mass media articles or news


programs, Internet searches,
consumer rating organizations

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Experiential Sources

Using, handling, or examining

3) Evaluation of
Alternatives
Alternative evaluation:
How the consumer processes information to

arrive at brand choices.

How consumers go about evaluating purchase

alternatives depends on the individual


consumer and the specific buying situation.
Some decisions involve a careful, logical, and
systematic evaluation by the consumer.
Some do little analysis, and rely on impulse
and intuition

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4) Purchase Decision
Generally, the consumers purchase decision will be to

buy the most preferred brand.


Two factors can come between the purchase
intention and the purchase decision.
Factors that influence the purchase decision:
Attitudes of others:

* If someone important to you thinks that you should


buy the lowest-priced product, the chances of your
buying a more
expensive product are reduced.
Unexpected situational factors :

* Unexpected events may change the purchase


intention.
* E.g.: Close competitors drop its price
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5) Postpurchase Behavior
The difference between the consumers

expectations and the perceived


performance of the good purchased
determines how satisfied the consumer is.
Example:
Performance BELOW Expectation =
Disappointment
Performance EQUALS Expectation =
Satisfaction

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Performance ABOVE Expectation =


Happy & Delightful

Lets Discuss This


Think of the last time you were unhappy

with a purchase or with a company.


How many people did you tell?
Did you let the company know about it?
Why or why not?
Have you ever returned to that store or
brand?

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Involvement in Purchase
Decision
High involvement purchase decisions
High level of potential social or economic

consequences.
Low involvement purchase decisions
Routine purchases

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Mini Discussion
Categorize each of the following as a high

or low involvement product:


Shampoo
Computer
Popcorn
Apartment
Cell phone

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Discussion - Scenario

Assume the your current small television set


(for which you paid RM 69.99 several years
ago) has developed wavy lines across the
screen and makes the people in your favorite
programs sound as though they are using
cheap walkie-talkie radios. Therefore, you
have decided to work during your holiday to
save money for the ultimate RM1,200 highdefinition television with surround sound.
Trace the steps of your decision process for
purchasing your new television.
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Answers
1.
NEED RECOGNITION: Your present television has wavy
lines and poor sound quality, and you desire a new
television set.
2.
INFORMATION SEARCH: You check both internal and
external sources of information such as your own
knowledge, opinions of peers, information from magazines,
and the advice of television sales personnel.
3. EVALUATION OF ALTERNATIVES: You consider product
attributes of various television brands and models in an
evoked set. These attributes might include sound quality,
looks, price, warranty, brand name reputation, components,
and so on.
4.PURCHASE: You buy the hi-def television after judging
alternatives.
5.POSTPURCHASE BEHAVIOR: You are satisfied with your
purchase, which was the result of extensive decision
making. Alternatively, you are dissatisfied with your
purchase, return the television, and begin the process
36 again.

Business Markets
Business buyer behavior refers to the

buying behavior of the organizations that buy


goods and services for use in the production
of other products and services that are sold,
rented, or supplied to others.
In the business buying process, business
buyers determine which products and
services their organizations need to purchase,
and then find, evaluate, and choose among
alternative suppliers and brands.
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Learning Objective 3
Define the business market and identify the
major factors that influence business buyer
behavior

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Business Markets
Business markets involve far more dollars

and items than do consumer markets.


The main differences between business

markets and consumer markets are in :


1. Market structure and demand,
2. Nature of the buying unit,
3. Types of decisions and the decision process

involved.

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Business Markets
1. Market Structure and Demand
The business marketer normally deals with far
fewer but far larger buyers than the
consumer marketer does.
Business demand is derived demand - it
ultimately derives from the demand for
consumer goods.
2. Nature of the Buying Unit:
Business purchases involve more decision
participants.
Business buying involves a more professional
purchasing effort.
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Business Markets
3. Types of Decisions and the Decision
Process:
Business buyers usually face more complex
buying decisions. Involve large sums of
money, interaction with many people at
many level of org
Business buying process tends to be more
formalized.
Need
detailed
product
specifications, written order, formal approval.
Buyers and sellers are much more dependent
on each other.

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Major Types of Buying


Situation
1. Straight re-buy
The buyer reorders something without any
modifications.

2. Modified re-buy
The buyer wants to modify product
specifications, prices, terms, or suppliers.
Better offer and new business

3. New task
The company is buying a product or
service for the first time.
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Involvement in Purchase

INVOLVEMENT

New Task Buying

Modified Re buy

Straight Re buy
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Involvement in Purchase

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Chapter 5
The End

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