(3) Consumer and Business Buyer Behavior Instructor: Amir Ekhlassi

گر به ظاهر آن پری پنهان بود آدمی پنهان تر از پریان بود گر به ظاهر آن پری پنهان بود آدمی پنهان تر از پریان بود نزد عاقل زان پری مضمرست آدمی خود صدبار پنهان تراست ©Compiled by: Amir Ekhlassi

Consumer Buyer Behavior Consumer buyer behavior refers to the buying behavior of final consumers, individuals and households who buy goods and services for personal consumption. These final consumers make up the consumer market. The central question for marketers is: “How do consumers respond to various marketing efforts the company might use?” ©Compiled by: Amir Ekhlassi

Model of Buyer Behavior Consumer psychology Motivation Perception Learning memory Marketing stimuli Products &services Price Distribution Communication Other stimuli Economic Technological Political Cultural Buying decision process Problem recognition Information search Evaluation of alternatives Purchase decision Post-purchase behavior Purchase decision Product choice Brand choice Dealer choice Purchase amount Purchase timing Payment method Consumer characteristics Cultural Social personal ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior cultural Culture Subculture Social class social Reference groups Family Roles and status personal Age & life cycle stage Occupation Economic situation Lifestyle Personality and self-concept psychological Motivation Perception Learning Beliefs and attitudes Buyer ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (cultural factors) Culture: is the most basic cause of a person’s wants and behavior. Every group or society has a culture, and cultural influences on buying behavior may vary greatly from country to country. Marketers are always trying to spot cultural shifts in order to discover new products that might be wanted. ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (cultural factors) Subculture: each culture contains smaller subculture, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, racial groups, and geographic regions. Many subcultures make up important market segments, and marketers often design products and marketing programs tailored to their needs. ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (cultural factors) Social classes: are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Social class is not determined by single factor, such as income, but is measured as a combination of occupation, income, education, wealth, and other variables. Social classes show distinct product and brand preferences in areas such as clothing, home furnishing, leisure activity, and automobiles. ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (cultural factors) Social class is also affected by: Social skills Status aspirations Community participation Family history Cultural level Recreational habits Physical appearance Social acceptance by a particular class ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (social factors) Groups: a person’s behavior is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups. In contrast, reference groups serve as direct or indirect points of comparison or reference in forming a person’s attitudes or behavior. People often are influenced by reference groups to which they do not belong. Opinion leader: person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts influence on others. ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (social factors) Family: the family is the most important consumer buying organization in society, and it has been researched extensively. Roles and status: a person belongs to many groups- family, clubs, organizations. The person’s position in each group can be defined in terms of both role and status. People often choose products that show their status in society. ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (personal factors) Age & life cycle stage: tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle. Traditional family life cycle: young singles and married couples with children. Nontraditional stages: unmarried couples, singles marrying later in life, childless couples, same-sex couples, single parents, extended parents, and etc. ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (personal factors) Occupation: a person’s occupation affects the goods and services bought. Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can even specialize in making products needed by a given occupational group. Economic situation: marketers of income- sensitive goods watch trends in personal income, savings, and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and reprice their products closely. ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (personal factors) Lifestyle: is a person’s pattern of living as expressed in his/her psychographics. It involves measuring consumers’ major AIO dimensions (activities, interests, and opinions) life style captures more than the person’s social class or personality. Personality and self-concept: personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (psychological factors) Motivation: a need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to direct the person to seek satisfaction. Perception: is the process by which people select, organize, and interpret information to form a meaningful picture of the world. People can form different perceptions of the same stimulus because of three perceptual processes: Selective attention selective distortion Selective retention ©Compiled by: Amir Ekhlassi

Factors influencing consumer behavior (psychological factors) Learning: describes changes in an individual’s behavior arising from experience. learning theorists say that most human behavior is learned. Classical conditioning (the behaviors are assumed to be involuntary and not under the conscious control of the individual) Operant conditioning Beliefs and attitudes: a belief is a descriptive thought that a person has about something. Attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. ©Compiled by: Amir Ekhlassi

The buyer decision process Need Recognition Information Search Evaluation of Alternatives Purchase Decision Postpurchase Behavior ©Compiled by: Amir Ekhlassi

The buyer decision process 1. Need recognition: the buying process starts with need recognition-the buyer recognizes a problem or need. The need can be triggered by internal or external stimuli. at this stage, the marketer should research consumers to find out what kinds of needs or problems arise, what brought them about, and how they led the consumer to this particular product. ©Compiled by: Amir Ekhlassi

The buyer decision process 2. Information search: of the consumer’s drive is strong and a satisfying product is near at hand, the consumer is likely to buy it then. If not, the consumer may store the need in memory or undertake an information search related to the need. The consumer can obtain information from the following sources: Personal sources (family, friends, neighbors) Commercial sources (advertising, salespeople, dealers) Public sources (mass media, consumer rating orgs) Experiential sources (handling, examining, using the product) ©Compiled by: Amir Ekhlassi

The buyer decision process 3. Evaluation of alternatives: unfortunately, consumers do not use a simple and single evaluation process in all buying situations. Instead, several evaluation processes are at work. How consumers go about evaluating purchase alternatives depends on the individual consumer and the specific buying situation. ©Compiled by: Amir Ekhlassi

The buyer decision process 4. Purchase decision: generally, the consumer’s purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision. The first factor is the attitudes of others. The second factor is unexpected situational factors. ©Compiled by: Amir Ekhlassi

The buyer decision process 5. Postpurchase behavior: the larger the gap between expectations and performance, the greater the consumer’s dissatisfaction. Almost all major purchase result in cognitive dissonance. A company would be wise to measure customer satisfaction regularly. It cannot simply rely on dissatisfied customers to volunteer their complaints when they are dissatisfied. Companies should set up systems that encourage customers to complain. ©Compiled by: Amir Ekhlassi

The buyer decision process for new products A new product is a good, service, or idea that is perceived by some potential customers as new. Adoption process: the mental process through which an individual passes from first hearing about an innovation to final adoption. Stages in the adoption process are: Awareness Interest Evaluation Trial Adoption ©Compiled by: Amir Ekhlassi

Individual differences in innovativeness Early Majority Late Majority Innovators Early Adopters Laggards 34% 34% Percentage of Adopters 2.5% 16% 13.5% Time of Adoption Early Late ©Compiled by: Amir Ekhlassi

Influence of product characteristics on rate of adoption Five characteristics are especially important in influencing an innovation’s rate of adoption: Relative advantage Compatibility Complexity divisibility Communicability Other characteristics influence the rate of adoption, such as: Initial and ongoing costs Risk and uncertainty Social approval ©Compiled by: Amir Ekhlassi

Business buyer behavior Business Buyer Behavior refers to the buying behavior of all 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. The business market is huge and involves many more dollars and items do consumer markets. ©Compiled by: Amir Ekhlassi

Characteristics of business markets Market Structure and Demand Fewer, larger buyers Geographically concentrated Demand derived from consumers Fluctuating demand Nature of the Buying Unit More buyers More professional purchasing effort Types of Decisions & the Decision Process More complex decisions Process is more formalized Buyer and seller are more dependent on each other Build close long-term relationships with customers ©Compiled by: Amir Ekhlassi

Business buying situations Straight Re-buy New Task Buying Modified Re-buy Involved Decision Making ©Compiled by: Amir Ekhlassi

Participants in the Business Buying Process: The Buying Center Users Gatekeepers Buyers Deciders Influencers ©Compiled by: Amir Ekhlassi

Major Influences on Business Buyer Behavior Environmental Economic, Technological, Political, Competitive Organizational Objectives, Policies, Procedures, Structure, & Systems Interpersonal Authority, Status, Empathy & Persuasiveness Individual Age, Education, Job Position, Personality & Risk Attitudes Buyers ©Compiled by: Amir Ekhlassi

Stages of the Business Buying Process Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review ©Compiled by: Amir Ekhlassi

Thank You For Your Patience & Attention