Chapter 5 Understanding Consumer and Business Buyer Behavior Consumer Buying Behavior Refers to the buying behavior of people who buy goods and services for personal use The central question for marketers is How do consumers respond to various marketing efforts the company might use Simple Model of Consumer Buyer Behavior Culture Culture is the Most Basic Cause of a Person s Wants and Behavior Culture is learned from etc Culture includes basic values perceptions wants and behaviors Culture Subculture Groups of people with shared value systems based on common life experiences Some U S Subcultures Hispanic Consumers African American Consumers Social Factors Membership Reference opinion leaders Aspirational Most important consumer buying organization Role Expected activities Status Esteem given to role by society Groups Family Roles Status Personal Factors Age and Life Cycle Stage Occupation Economic Situation Remember Why These Are Important to Marketers They Want to Understand how these characteristics affect the buyers responses They Want to Understand how these characteristics affect the buyers responses Buyer Decision Process Buying Decision Process Step 1 Need Recognition Buyer becomes aware of a difference between a desired state and an actual condition Marketers may use sales personnel and packaging to trigger recognition of needs or problems Buyer Decision Process Buying Decision Process Step 2 Information Search This stage begins after the consumer becomes aware of the problem or need There are various sources of information Sources of Information Personal Commercial Public Most effective source Family friends neighbors Advertising salespeople Mass Media Handling the product Buyer Decision Process Buying Decision Process Consumers May Use Careful Calculations Logical Thinking Consumers May Make Buying Decisions on Their Own Marketers must study buyers to find out how they evaluate brand alternatives Buyer Decision Process Buying Decision Process Consumer satisfaction is a function of consumer expectations and perceived product performance Performance Expectations Performance Expectations Performance Expectations So how can marketers improve customer satisfaction 1 2 Cognitive Dissonance A buyer s doubts shortly after a purchase about whether it was the right decision Buyer Decision Process Don t forget Marketers want to INFLUENCE each of these steps to the extent they can Adoption Process The mental process through which an individual passes from first hearing about an innovation to final adoption Stages in the Adoption Process 1 Awareness passive Consumer becomes aware of the new product but lacks information about it 2 Interest Consumer seeks information about new product 3 Evaluation Consumer considers whether trying the new product makes sense 4 Trial Consumer tries new product on a small scale to improve his or her estimate of its value 5 Adoption Consumer decides to make full and regular use of the new product New Product Adoption Rate Some new products are adopted quickly Others take a long time Land line Phone Mobile Phone Smart Phone 0 5 10 15 20 25 30 35 40 45 50 of years to get from 5 to 50 penetration in the U S How might you explain this difference Infrastructure Outside realm of thinking Have to have someone else to talk to Influence of Product Characteristics on Rate of Adoption Relative Advantage Is the innovation superior to existing products DVD vs VCR Compatibility Does the innovation fit the values and experience of the target market confused about phones in past Complexity Is the innovation difficult to understand or use NASA computer for everyday people Divisibility Can the innovation be used on a limited basis Apple letting you test phones Communicability Can results be easily observed or described to others Apple Watch Example Relative advantage Better than just carrying a phone Compatibility Works with everyday life Complexity Not complex like an iPhone Divisibility You can try it in Apple store Communicability Communicates benefits Business Markets Business Buyer Behavior 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 Business to business sales Just as is the case with consumer buyer behavior marketers want to know how business buyers behave Business Markets Market Structure and Demand Contains far fewer but larger buyers Customers are more geographically concentrated Business demand is derived from consumer demand Nature of the Buying Unit Business purchases involve more decision participants Business buying involves a more professional purchasing profit Types of Decisions and the Decision Process Business buyers usually face more complex buying decisions Business buying process tends to be more formalized Buyers and sellers are much more dependent on each other Model of Business Buyer Behavior Major Types of Buying Situations Straight Rebuy Modified Rebuy New Task The buyer routinely reorders something without considering alternative suppliers The buyer wants to modify product specifications prices terms or suppliers The buyer purchases a product or service for the first time Participants in the Business Buying Process Decision making unit of a buying organization is called its buying center Not a fixed and formally identified unit Membership will vary for different products and buying situations Buying Center Members Users for industrial robots assembly line workers are users Deciders Decide what to buy Influencers Influence deciders VP of engineering influences purchaser Buyers Found in procurement purchasing organization Gatekeepers Controls access to important people The Business Buying Process Bottom Line Marketers need to understand customers Whether the customers are end consumers or business to business customers marketers want to know What the factors are that influence their choices How do they make decisions Marketers want to know how customers are likely to respond to their marketing actions