Chapter Three

Buying Behavior

3.1 Consumer Buying Behavior

Consumer Market: constitutes all the individuals and hh who buy or acquire goods & services for personal or family consumption. Consumer buyer behavior: the buying behavior of final consumers individuals & hh who buy goods & services for personal or family use.
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Consumers tremendously vary in: - age, income, education, motivation, tastes etc which all affect consumer behavior 3.1.1 The Buyer Decision process i. Need recognition: need can be triggered by both internal drive such as hunger, thirst, sex etc and external stimuli such as ad, wom etc ii. Information search:- source (personal, commercial, public, experience)
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iii. Alternatives evaluation:- rational consumers evaluate on performance, price, quality, reliability etc - emotional consumers evaluate on product style, fashion, outlook etc iv. Purchase decision v. Post purchase decision: cognitive dissonance

3.1.2 Major factors influencing buying behavior Consumer bhr is influenced by:- culture - social - personal - psychological 1)Culture include values, perceptions, wants, and bhr learned from d/t social institutions: schools, peers, media, religious institutions, social institutions etc
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Is the most basic cause of a persons wants and behavior learned behavior: children inherit values from their ancestors. Is classified into: i) Core culture enduring/permanent, lasts long for generation, dont change at least in the short run ii) secondary culture liable to change even in the short - run

culture is born, grows & dies Marketers need to monitor cultural shifts to discover new products that goes with the emerging change Subculture Each culture contains smaller subculture; or group of people with shared value systems based on common life experience & institutions. It includes:- nationality - religion - racial group and - geographic region
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Subcultures make up important market segments and thus marketers often design products and marketing programs tailored their needs Social class Societys relatively permanent and ordered divisions whose members share similar values, interests, and behaviuors.

Social class is determined by a combined effect of occupation, income, education, wealth and other variables but not determined by a single variable (income or education) - Upper class - Middle class - Lower class white collar vs blue collar working group

Consider the ff statements that show how culture brings differences in peoples view: - USA: time is money; - Spain: those who arrive at the grave first; - Nigeria: the clock did not invent man; - France: before the time, it isnt yet the time after the time, it is too late; - Ethiopia: If you wait long even an egg will walk;

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2)Social factors Social factors constitute consumer groups, family, pears, social roles and status. Groups: i) Membership groups: that have direct influence & to which a person belongs, ii) Reference group: serves as point of comparison ( directly or indirectly), iii) Aspiration groups: to which the individual wants to belong in the future, iv) Opinion leaders: people within the reference group who because of special skill, knowledge, personality or other characteristics exert influence on others.
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NB: group influence varies across products and brands Family Is the most important consumer buying organization in a society the roles and influences of the husband, wife and children on purchas of d/t pdts

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Roles & status Role: activities people are expected to perform in a social setting Status: the position that each role carries an individual may play different roles in different social group Ex: an individual can hold paternal role in his family, manager in his organization, chairman in a social club etc
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3)Personal Factor: Age & life cycle stage:- young single - married couples with no children - married with children Occupation:- blue collar workers - Managers - diplomats - white collar workers - laborers
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Income: the economic situation, as income increase, individual needs and wants will suit at least to some extent. Lifestyle: patterns of living expressed in ones activities, interests, and opinions activities expressed through work, hobbies, shopping, sports, social events preferences interest exhibited through food, fashion, recreation selections
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opinion about oneself, social issues, business, products etc Personality: unique psychological characteristics that leads to relatively consistent and lasting responses to the environment Self-concept: self-image, the view towards ones own

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4) Psychological factor: The variables we have here are: motivation, perception, learning, beliefs and attitude i) Motivation: motive (or drive)- it is a need that is sufficiently pressing to direct a person to seek satisfaction theories of human motivation: Sigmund freud: Urges, ego, Id, superego Abraham Maslow: hierarchy of needs
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Abraham Maslows hierarchy of needs

Self actualization
(self-development & realization)

Status, recognition

Esteem Social

Love, belongingness

Security, protection

Safety

Psychological
Hunger, thirst, sex

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Perception: the process by which people select, organize, and interpret information to form a meaningful picture of the world. individuals can form d/t perceptions due to d/cs in: - selective attention - selective distortion - selective retention Learning: changes in an individuals bhr arising from experience; it doesnt happen by accident
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Beliefs and attitudes: - Belief a descriptive thought that a person holds about sth - Attitude a persons consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

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Model of buyer behaviour

Marketing & other stimuli Marketing others Product economic Price technology Place political Promotion culture

Buyers black box Buyer buyer Charact decision eristics process

Buyer response Product choice Brand choice Dealer choice Purchase time Purchase amount

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Participants of consumer purchase decision i) Initiator: who produces the purchase idea ii) Influencer: who has better knowledge or experience about the purchase iii) Decider: who authorizes the purchase decision iv) Buyer: who goes out for purchase v) User: who finally uses the product NB: a single individual can act for all the roles of the participants
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Types of buying decision behaviour Buying behaviour varies from product-toproduct (buying salt from a nearby shop to buying a new car) Complex decisions usually involve more buying participants and more buying procedure There are four basic buying decision behaviour
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A. Complex buying behaviour Characteristics there exists significant brand differences among brands; - high consumer mental involvement - for expensive product - for risky product - for infrequent purchase - for highly self-expressive product
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Thus, buyers will pass through a learning process: developing belief, attitude formation, purchase choice Marketers should help buyers by providing the necessary information

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B. Dissonance-reducing buying behaviour characteristics:- high consumer involvement - expensive, infrequent, or risky purchase little difference among brands buyers go around to learn what is available not to experience dissonance (after-purchase discomfort) marketers should teach their customers on their post purchase satisfaction not to form negative attitude based on wrong attitude.
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C. Habitual buying behaviour Characteristics:- low consumer involvement - little significant brand d/c - low cost, frequently purchased product Buyers dont search extensively for information, they dont pass through usual belief attitude behaviour sequence they passively receive information about it Marketers need to advertise & use sales promotion technique to habituate the product
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D. Variety seeking buying behaviuor Characteristics:- low consumer involvement - significant brand d/c buyers switch brand simply to test new brand but not for they are dissatisfied marketing strategies i) Market leaders:- encourage the habit by dominating shelf space - design reminding ad
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ii) challengers:- offer lower price, special deals, free samples, - ad advantages of trying something new exercise (replace the letters for the behaviors)
High involvement Significant brand d/c Low involvement

A B

C D
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Few brand d/c

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3.2 Business Market

Def. business market consists of the organization that buy goods and services to use in the production process of other goods or for the purpose of reselling or renting for others at a profit Characteristics of business market 1. Market structure and dd - contains few but large buyers - geographically concentrated in urban & cities
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- the dd for business purchase is derived from final consumers dd - dd is more inelastic (not affected as much in the short run by price changes) - dd fluctuates more & more quickly 2. Nature of the buying unit - involves more buyers (individual decision) participants - involves more professional purchase effort
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3. Types of decision and the decision process - complex buying decision - formalized (publication, proforma collection, purchase approval) - buyers and sellers work closely Other characteristics i) Direct purchase (no intermediaries) ii) Reciprocity (a relationship between people involving the
exchange of goods, services, favors, or obligations, especially a mutual exchange of privileges between trading nations or recognition of licenses between states)

iii) leasing

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Major types of Business buyer behaviour i. Straight rebuy - no modification - routine basis Marketing strategies for suppliers in suppliers try to maintain product and service quality - encourage automatic reorder system

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out suppliers try to cause dissatisfaction b/n the buyer and in supplier - try to offer sth new to get first trial ii. Modified rebuy when the buyer plans to change: - product specification - price - terms - suppliers Involves more decision participants
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This situation is threat to in suppliers but opportunity to out suppliers iii. New task: - first time purchase - greater the cost or risk of purchase, more people will participate - more information is required

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Participants in the business buying process The buying center includes people who plays different roles in the purchase process i. Users ii. Influencers: experts about the purchase iii. Buyers iv. Deciders/approvers v. Gate keepers: who controls the smooth flow of info from the suppliers to the buyers
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Factors influencing business buyer behaviour i) Environmental factors - economic development (level of primary dd; cost of money) - supply condition ( shortage Vs surplus) - technological change - political & regulatory developments - business culture and customs
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ii) Organizational (own) factors - objectives - policies - procedures - organizational structure - systems iii) Interpersonal factors: - authority of buying center members - their status, empathy, persuasiveness
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iv) Individual factors: Personal motives, perceptions and preferences determined by:- age - education - job position - personality - risk attitude

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The business buying process 1. Problem recognition - idea generation internal sources ( machine break down, plan to launch new product etc) - external source ( trade show, ad, sales person call) 2. General need description: description of- quality - quantity - brand - price etc
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3. Product specification: - what is the product that satisfies the described need - Value analysis 4. Supplier search list of venders can be obtained from - trade directories - internet - other companies recommendation etc - publication of the proposal of the offer
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5. Proposal solicitation: invite qualified suppliers to submit proposals 6. Supplier selection: reviews the submitted proposals & select a supplier 7. Order routine specification: writes the final order with the selected supplier by listing the technical specifications 8. Performance review: assess the performance & decide to continue, modify, or drop the arrangement
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Thank you

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