Amity School of Business

Amity School of Business

Principles of Marketing - I

Module - IV
Consumer Buying Behavior

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Definition of Consumer buying behavior

• “Consumer buying behavior refers to the buying

behavior of final consumers individuals and
households who buy goods and services for
personal consumption.”

-Kotler & Armstrong

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Consumer Behavior Defined

• The study of individuals, groups, or organizations and
the processes they use to select, secure, use, and
dispose the products, services, experiences, or ideas to
satisfy needs and the impact that these processes have
on the consumer and society
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Consumer Behavior Defined………

Consumer Behavior includes the

“what – where – why – when – and - how”
of the purchase and experience process.
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The study of Consumer Behavior attempts to find the

answers for the following questions:-

1. Who are the Customers?

2. What do they Buy?
3. Where do they Buy?
4. How do they Buy?
5. Why do they Buy?
6. When do they Buy?
7. How often do they Buy ?
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Model of Buyer Behavior

Marketing Other Buyer’s Buyer’s Buyer’s
Stimuli Stimuli Characteristics Decision Decision
Process
Problem
Product Economic Culture Product
Recognition
Choice
Price Tech. Social
Information
Brand
Place Political Personal Search
Choice
Promotion Cultural Psychological Evaluation of
Dealer
Alternatives
Choice
Purchase
Purchase
Decision
Timing
Post purchase
Purchase
Behavior
Amount
 7 0’s Framework
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1. Who constitutes the market?

– Parent, Child, Male, Female - Occupants
2. What does the market buy?
– (Soap) Regular, Medicated, with Glycerin, Herbal what Brand, what size - Objects
3. Who participates in buying?
– Parent, Child, Male, Female - Organizations
4. How does the market buy?
– Cash, Credit, Mail-order etc. - Operations
5. When does the market buy?
– Monthly, Weekly etc. Occasions
6. Where does the market buy?
– Supermarket, Retail store etc. - Outlet
7. Why does the market buy?
– For Cleansing, Bathing, Fresh feeling etc. Prescribed by Doctor (Medicinal) - Objectives
 7 0’s Framework Amity School of Business

1. Occupants
2. Objects
3. Organizations
4. Operations
5. Occasions
6. Outlet
7. Objectives
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Factors Affecting
Consumer Buying Behavior
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7.10
 Factors Influencing Consumer
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Behavior
• Cultural Factors
1. Culture
• Most fundamental determinant of person’s wants and
behavior
• Set of values, perceptions, preferences and behaviors
through his or her family or key institutions

2. Subculture
• Provides more specific identification and socialization for
their members
• Includes religions and geographic regions.
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3. Social Class
• Are relatively homogenous and enduring divisions in a
society, which are hierarchically ordered and whose
members share similar, interests and behavior.
• Each social class tend to behave more alike than persons
from two different social classes.
• Persons are perceived as occupying inferior or superior
positions according to social class
• Social class is indicated by a cluster of variables-income,
wealth, occupation etc
• Individuals can move from one social class to another
during their lifetime
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• Social Factors
1. Reference Groups
• A person’s reference group consists of all those
people that have direct or indirect influence on
person’s attitude or behavior, they are also known as
membership groups.
– Primary reference group consists of family, friends,
neighbors and co-workers with whom the person interacts
fairly continuously and informally.
– Secondary reference group such as religious, professional,
and trade union groups which tend to be more formal and
require less continuous interaction.
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• Aspirational groups are those the person hopes to join

• Dissociative groups are those whose values or behavior

an individual rejects.

• Opinion Leader is the person in informal product related

communications who offers advice or information about
specific product category
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2. Family
• Family members constitute the most
influential primary reference group.
– Family of orientation: parents and siblings
– Family of procreation: spouse and children
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3. Roles and Statuses

• A person participates in many groups namely
family, clubs, organizations etc.
• Persons position can be defined in terms of role
and status

– Role consists of the activities that a person is

expected to perform.
– Each role carries a Status
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• Personal Factors
1. Age and stage in life cycle
• Consumption is shaped by the family life cycle. There
are eight stages present in the family life cycle
1. Bachelor stage : young, single
2. Newly married couple: Young and no children
3. Full Nest I: youngest child under six
4. Full Nest II: youngest child over six
5. Full nest III: older married couple with grown up
dependent children
6. Empty Nest I: older married couple with no children
living with them, head of family earning
7. Empty Nest II: older married couple staying alone
with head of family as retired person
8. Solitary survivor: retired
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2. Occupation & Economic circumstances

• Marketers try to identify the occupational groups that have
above average interest in their products and services.
• Product choice is greatly affected by economic
circumstances: spendable income, savings and assets, debts,
borrowing power and attitude toward spending versus saving.

3. Lifestyle
• A lifestyle is the person’s way of living in the world as
expressed in activities, interests and opinions. Lifestyle
portrays the complete person interacting with his or her
environment.
• Marketers search for relationship between their products and
lifestyle groups.
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4. Personality and Self Concept

– It refers to distinguishing psychological characteristics

that lead to relatively consistent and enduring responses
to environment.
– Personality is usually described in terms of such traits as
self confidence, dominance, autonomy, deference,
sociability, defensiveness and adaptability.
– Related to personality is self concept. Marketers try to
develop brand images that match the target market’s self
concept.
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• Psychological Factors
1. Motivation
“Motive” is a need that is sufficient enough to drive a person
to act.
A Need becomes a motive when evoked to a sufficient level
of intensity.
Consumers have different ‘buying motives’.
Eg. Emotional buying motive
Rational buying motive
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2. Perception
Perception is the process by which an individual selects,
organizes and interprets information inputs to create a
meaningful picture of the world.

Perception depends not only on the physical stimuli but

also on the stimuli’s relation to the surrounding field and
on conditions within the individual
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Three perceptual processes

# Selective Attention
# Selective Distortion
# Selective Retention
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Three perceptual processes

# Selective Attention
* People are more likely to notice stimuli that relate
to a current need
* People are more likely to notice stimuli they
anticipate
* People are more likely to notice stimuli whose
deviations are large in relation to the normal size of the
stimuli.
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# Selective Distortion
It is the tendency to twist information into
personal meanings and interpret information in
a way that will fit our preconceptions.

# Selective Retention
people will forget much that they learn but will
tend to retain information that supports their
attitudes and beliefs.
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• Learning
– It involves changes in an individual’s behavior
arising from experience.
– Learning theory teaches marketers that they can
build up demand for a product by associating it with
strong drives, using motivating cues, and providing
positive reinforcement.
• A drive is a strong internal stimulus impelling action
• Cues are minor stimuli that determine when, where and
how a person responds.
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• Beliefs & Attitudes

– A belief is a descriptive thought that a person holds about
something
• Belief may be based on knowledge, opinion, or faith.
• They may or may not contain emotional charge

– An attitude is a person’s enduring favorable or unfavorable

evaluations, emotional feelings, and action tendencies toward
some object or idea.
• Attitudes lead people to behave in a fairly consistent way towards
similar objects.
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Various Buying Roles

– Initiator: - A person who first suggests the idea of
buying the product or service
– Influencer: - A person whose view or advice influences
the decision
– Decider: - A person who decides on any component of a
buying decision
– Buyer: - The person who makes the actual purchase
– User: - A person who consumes or uses the product or
service
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Stages of
Consumer Buying Decision Process
Problem
Information Search
Recognition

Evaluation of
Alternatives

Post Purchase
Purchase Decision
Behavior
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• Problem Recognition
– Internal or External stimuli

• Information Search
– Heightened attention
– Active information search
• Personal sources
• Commercial sources
• Public sources
• Experiential sources

Total Set Awareness Consideration Choice Set Decision

Set Set
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• Evaluation of Alternatives
– Evaluation is a process of need identification, benefits
sought from the product and thirdly it should portray a
bundle of attributes with varying abilities
– Consumer develops a set of brand beliefs about where
each brand stands on each attribute.
– Set of beliefs make up brand image, these vary
according to experiences and learning.
– Consumer identifies parameters for evaluation and rates
each brand.
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• Size, weight
• Key features like processor, RAM,
keyboard quality, screen resolution
• Price

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• Purchase Decision Amity School of Business
– Consumer forms an intension to buy
the most preferred brand.
– Two factors that intervene in between
purchase decision and purchase
intension are: -
• Attitude of others
• Unanticipated situational factors
• Post Purchase Behavior
– Post purchase satisfaction
– Post purchase action
– Post purchase use & disposal
 2. Buying Behavior
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High Low Involvement
Involvement

Complex Variety
Significant Buying Seeking
Differences between
brands Behavior Buying
Behavior

Dissonance Habitual
Few Differences Reducing Buying
between brands
buying Behavior
Behavior

Henry Assael’s Buying Behavior Model

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• Complex Buying Behavior

– At first the buyer develops belief about the product
– Next develops attitude about the product
– Lastly makes a thoughtful choice
– Product is expensive, bought infrequently, risky and
highly self expressive
• Dissonance Reducing Buyer Behavior
– Buyer looks for information in the market
– Buys quickly responding to good price or to purchase
convenience
– Consumer first buys, then acquires new set of beliefs
and finally ends up with new set of attitude.
– Looks for cues that supports his purchase decision
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• Habitual Buying Behavior

– Consumers have little involvement and they go to
the store and reach for the brand.
– They reach the same brand not due to loyalty but
habit
– Passive recipients of information through ads and
develop brand familiarity rather than brand
conviction
• Variety Seeking Buying Behavior
– Consumer does a lot of brand switching
– Brand switching is done more for variety rather than
dissatisfaction.
 Consumer Adoption Process Amity School of Business

• It focuses on the individual and how fast he moves

through various stages in deciding whether to
adopt new goods, service or ideas.
• Sequence of events beginning with consumer
awareness of a new product leading to trial usage
and culminating in full and regular use of the new
product
• There are five categories of adopters
– Innovators
– Early adopters
– Early majority
– Late majority
– Laggards
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Adoption of Innovations
Percentage of Adopters

Early Majority Late Majority

Innovators

Early
34% 34% Laggards
Adopters

13.5% 16%
2.5% Time of Adoption
Early Late
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B2B Defined
• The management process responsible for
the facilitation of exchange between
producers of goods and services and their
organisational customers.
• B2B marketing and purchasing is a complex
and risky business involving a number of
different parties.
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Nature and Scope of the Business Market

The business market consists of all

individuals and organizations that buy goods
and services for one or more of the following
purposes:
• To make other goods and services
• To resell to other business users or to
consumers
• To conduct the organization’s operations
• Any good or service purchased for a reason
other than personal or householdAmity School of Business

consumption is part of the business

market.
• Each buyer within this market is termed a
business user.
• The activity of marketing goods and services
to business users, rather than to ultimate
users, is business marketing.
• A firm performing the activity is a business
marketer.
• The distinction of whether a good or service
is a consumer or business product depends
on the reason it is purchased, not on the
item itself!
 Characteristics of Business Amity School of Business

Market Demand
Four demand characteristics differentiate the
business market from the consumer market:
• Buyers are well informed
  Typically, business buyers are better
informed about what they are buying than
ultimate consumers.
• Demand is derived
– The demand for business products is generated
from the demand for the consumer products in
which that business product is used.
– Implications are: to estimate the demand for a
product, a business marketer must be very
familiar with how it is used; the producer of a
business product may find it worthwhile to
engage in marketing efforts to encourage the
sale of its buyers’ products.
• Demand is inelastic Amity School of Business
– Elasticity of demand refers to how
responsive demand is to a change in the
price of a product.
– The industry demand for many business
products is relatively inelastic, which
means that the total demand for all
producers of the product responds very
little to changes in its price.
• Demand fluctuates
– Although the demand for many business
goods does not change much in response
to price changes, it does respond to other
factors.
– Market demand for most classes of
business goods fluctuates considerably
more than the demand for consumer
products.
Factors Influencing Business
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Buyer Behavior
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CLASSIFYING BUSINESS BUYING SITUATIONS

• Business buying behavior involves degree of effort involved in the decision
and the levels within the organization in which these decisions are made.
Straight Rebuying
• A recurring purchase decision in which a customer reorders a product that has
satisfied needs in the past.
• Purchaser see little reason to assess competing options.
• Marketers who maintain good relationships with customers can go a long way
toward ensuring straight rebuys.
• High-quality products.
• Superior service.
• Prompt delivery.
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Modified Rebuying
• Purchaser willing to reevaluate available options.
• May occur if supplier has let a rebuy circumstance deteriorate
because of poor service or delivery performance.
New-Task Buying
• First-time or unique purchase situations that require considerable
effort by the decision makers.
• Most complex category of business buying.
• Often requires purchaser to consider alternative offerings and
vendors.
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THE BUYING CENTER CONCEPT

• Buying center Participants in an organizational buying action.

BUYING CENTER ROLES

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The Buying Center

• Initiators (who request the purchase)
• Users (One who will finally use the product)
• Influencers (people who give specifications and help in
evaluation of alternatives)
• Deciders (Decide on product requirements or suppliers)
• Approvers (who authorize the proposed action of
deciders or buyers)
• Buyers (people who formally have the authority to select
the supplier and arrange the purchase terms
• Gatekeepers (people who prevent sellers or information
from reaching the member of buying center)
Business Buying Process
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• Problem Recognition
– Internal or external stimuli
• General Need Description
– Buyer determines the needed item’s characteristics and required
quantity.
• Product Specification
– Development of the items technical specification product value
analysis (PVA) is done.
– PVA is an approach to cost reduction in which components are
carefully studied to determine if they can be redesigned or
standardized or made by cheaper methods of production
• Supplier Search
– Identification of the most appropriate supplier
• Proposal Solicitation
– Buyer invited qualified suppliers to submit proposals
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• Supplier Selection
– Buying center will specify desired supplier attributes and indicate their
relative importance
– It rates each supplier on the identified attributes
• Price
• Supplier reputation
• Product reliability
• Service reliability
• Supplier flexibility
• Order Routine Specification
– Buyer negotiates the final order listing the technical specifications, the
quantity needed, the expected time of delivery, return policies,
warranties etc.
• Performance Review
– Supplier evaluation can be done by
• Contacting the end user and asking for feedback
• Buyer may rate the supplier on various criteria using weighted score
method