MKTG 311 1st Edition Lecture 10 Outline of Last Lecture I. 3 Types of Buying Decision Behavior1. Extended Problem Solving2. Limited Problem Solving3. Routine Problem SolvingII. 2 Major Influences on Consumer Purchases1. Socio-Cultural factors2. Psychological factorsOutline of Current Lecture I. Influences on Consumer Purchases- Psychological InfluencesII. Classifying Business MarketsIII. Business Market CharacteristicsIV. The Buying SituationCurrent LectureI. Influences on Consumer Purchases- Psychological Influences- Beliefs and Attitudeso Beliefs- Knowledge or opinion about a product or a company. Easily changed.o Attitudes- Deep ceded beliefs, not so easily changed.- Lifestyle- Goes beyond age and income, looks at consumer’s activities, interest, and opinions.o Tool- VALS (Values and Lifestyle Segmentation)- Uses psychology to segment consumers in 1 of 8 consumer segments. Horizontal axis deals with primary motivation. Ideals (knowledge and principles) Achievement (social status prestige) Self-Expression: Physical and social activity, creativity Vertical Axis- Level of Resources: High, Average, Low*Strategic Business InsightsChapter 6: Understanding Organizations as Customer*Business to Business Marketing: It is the marketing of goods and services that businesses and other organization purchase for purposes other than personal consumption.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.II. Classifying Business Markets- Producers: Purchase goods/services for production of other goods/services that they sell to make a profit. 7.5 million. *Service- ¾ of producer market- Reseller Market: Purchase the finished products from the producer market and resell, rent, and lease to other businesses. 1.5 million Business, wholesalers, distributers, and retailers.- Organization Market: Government- 100,000 + nonprofitsIII. Business Market Characteristics (Comparison of the Consumer Market)1. Fewer customers, but size of the purchases is larger (US consumer households approximately 132 million compared to 10 million businesses)2. More geographic concentration- Businesses tend to be concentrated: Certain parts of the country, cities.3. Derived Demand- Business demand for goods and services is directly or indirectly related to consumer demand for goods and services.- Consumer Demand- Price, availability of the good, changing consumer tastes, discretionary income.- Business Demand for pulp and paper products: Examples: Pizza to go boxes, textbooks, FedEx packages, etc.4. Inelastic Demand- It doesn’t matter whether the price of the product goes upor down, businesses will still purchase about the same amount.5. Fluctuating Demand- Business Market is subject to greater fluctuations than the consumer market. Small changes in the consumer market can result in large increases or decreases in business market, Infrequency with which certain products are bought. Example: School bus6. Multiple Buyers- The product has to satisfy multiple needs. Example: Printer7. More professional purchasing effort. (Multiple people involved in the purchasing decision)8. Buying process is more formalized (Specifications that are developed, bids, contracts)9. Buyer and seller relationship is different (A working partnership vs. a transaction)IV. The Buying Situation- Examines the degree of time and effort to make a business decision.1. Straight Rebuy- Requires the least amount of time and effort. Routine purchase of goods and service, low on item reorder.2. Modified Rebuy- More time and effort. When the firm has new needs for products it purchases (Better price, quality, delivery time) Example: Alumni Magazines3. New Buy- New purchase, requires most time and effort. Risk and uncertainty. Example: Leo/