Customer & Buyer Behaviour Stage 6 Business Studies

At a glance Different types of customers Buying processes for consumers Buying processes for businesses Factors affecting consumer choice

Different types of customers People and households provide the consumption spending in the economy. i.e. spending on rent, food, clothing, entertainment etc. different groups of consumers exhibit buying behaviour depending on such things as income levels, age, gender and lifestyle Firms Buy goods for the purpose of manufacturing other goods and services. Key concern is the development of long-term relationships with suppliers. long-term relationship= focus on improving quality

Customers cont. Educational Institutions universities, state and private schools and colleges Are motivated more by price than the development of long-term relationships. Products can be developed specifically for the market. E.g. Apple eMac computer. Government federal * state * local E.g. office space, business furniture, office supplies and large amounts of highly specialist equipment such as hospital supplies, guns for the police, tanks for the army etc. emphasis on government buying = development of long-term relationships and high levels of quality.

Customers cont. Religious organisations Consists not only of churches and church schools but also charities. Significant buyers of business products. Charities such as St. Vincent de Paul & Salvation Army are extremely large and have a wide variety of activities. Price and heavy discounting are significant features when dealing with these customers.

Buying processes for consumers Part 1 Instant gratification approach I see it I like it I buy it

Buying processes for consumers Part 2 A dog has fleas Recognise a need Word of mouth, magazines, specialists etc Brand, price and availability considered Can I buy it at a reasonable shop at a shop near me? Search for information What best meets the need? How quickly will it work? Evaluate alternatives Purchase the chosen item Apply the flea treatment Buy the product Did it meet the need? Does the dog still have fleas? For how long did it work? Evaluate the product

Buying processes for businesses Organisations = fewer and larger buyers Results in closer buyer-seller relationships Depends more significantly on one another for supply and revenue. Demand for business goods is derived demand i.e. it is driven by a demand for consumer goods,therefore, demand for business goods is more volatile, Variations in consumer demand can have a significant impact on business-goods demand. Buyers are professional purchasers who are highly skilled in negotiating contracts and maximizing efficiency. Several individuals within the business usually have direct or indirect influence on the purchasing process.

Factors affecting consumer choice Psychological factors Motivation is the reason a customer wants to satisfy a need. Understanding motivation allows the marketing department to directly address the particular motivations that relate to the product. Perception is important. Perception is reality. Socio-cultural factors The influences of people and groups with whom the customer interacts. These groups strongly influence customer choice.

Factors (cont) Economic factors Relates mainly to the disposable income of the customer. Disposable income is the money left after taxes have been paid. Many families, for example, purchase their groceries from Aldi. Aldi have fewer products on the shelves, but those that are there are at significantly cheaper prices.

Factors (cont) Government factors These are an important influence on customer choice because governments tax some products (such as the GST and petrol excise), subsidise others (pharmaceuticals, for example) and ban others (such as illegal drugs).