Essentials of Health Care Marketing 2 nd Ed. Eric Berkowitz Chapter 4 Buyer Behavior

Chapter 4 Objectives 1.Understand the process of consumer and industrial decision making 2.Recognize the internal and external factors that influence consumer decision making 3.Identify alternative strategies to affect consumer decision making 4.Appreciate the different nature of organizational buying and its implication for marketing strategy

Learning Objective 1 Decision-Making Model –Consumer decision-making process 1.Problem recognition 2.Internal search 3.External search 4.Alternative evaluation Evaluative criteria 5.Purchase 6.Post-purchase evaluation

Learning Objective 2 Alternative Decision-making sequences –High vs. low involvement Level of consumer’s personal investment of purchase Consider risk, cost, social implications –Degree of effort expended in moving from internal to external search, & extensiveness of external search

Learning Objective 2 Alternative Decision-making sequences –Routine Decision-making Brand loyalty –Complex Decision-making High involvement, extended search –Limited Decision-making Low involvement over-the counter pharmaceutical purchases

Learning Objective 3 Psychological influences –Motivation –Attitudes –Lifestyles VALS, PRIZM –Learning –Perception Perceived Risk

Learning Objective 3 Sociocultural influences –Family life cycle Modified life cycle Family decision making See exhibit 4-6. Pp. 117 –Social class See exhibit 4-7, p. 120 for Social Class Distinctions. –Reference Group –Culture & Subculture

Learning Objective 4 Industrial Buyer Behavior –Employers are huge customers Occupational medicine Benefits purchasing Physician services

Learning Objective 4 Industrial Buyer Behavior –Organizational Differences Number of Organizations Demand variations –Derived demand Greater total sales volume Geographical concentration Professional buying

Learning Objective 4 Industrial Buyer Behavior –Organizational Differences continued Buying center Negotiation variations Vendor solicitation Close buyer-seller relationships

Learning Objective 4 Industrial Buyer Behavior –Buying process New task buying Modified rebuy Straight rebuy

Learning Objective 4 Industrial Buyer Behavior –Buying process The buying center –Users –Influencers –Gatekeepers –Deciders –Buyers

Summary Buyer behavior that results in purchase is a multistage process involving problem recognition, search, evaluation, purchase, and post-purchase evaluation. Post-purchase evaluation is a critical component of buyer behavior. Organizations should assess whether customer expectations are confirmed or disconfirmed by their interactions with the service or use of the product.

Summary continued Consumer decision making depends to a large degree on the amount of consumer involvement in the purchase. The level of involvement is related to the degree of risk and the extent of search behavior. The consumer decision-making process is affected by several influences: motivation, attitudes, lifestyles, learning, and perception.

Summary continued Individual behavior is related to the stage a person is in his or her life cycle. As the composition of the typical family has changed, so have the traditional stages of the life cycle been modified. Within the United States, there are several distinct social classes, each of which reflects norms of behavior, attitudes, and values.

Summary continued Culture is recognized as the transmission of attitudes, values, and norms from one generation to the next. Within the United States there is the growing emergence of several distinct subcultures that influence buying behavior. Organizational buying behavior is characterized by the number of companies, demand variations, sales volume, professionalism of the buyer, and geographic concentration.

Summary continued A major defining characteristic of organizational buying behavior is the buying center, which involves many individuals at different levels and positions within the firm. There are three variations of industrial buying: new task, modified rebuy, and straight rebuy.