Marketing Analysis: Consumer Buyer Behaviour Jonathan Freeman

Buyer Behaviour Goals Buyer Behaviour Goals To understand: Models of consumer purchase decision processes. Influences on purchase decisions: Influences on purchase decisions: What What How How Marketing implications of the models. Marketing implications of the models.

Definitions Dibb, Simkin,Pride and Ferrell Consumer Buyer Behaviour: Consumer Buyer Behaviour: “The decision processes and acts of individuals involved in buying and using products.”

Why do businesses need to know about their customers? Influence purchase probabilities. Influence purchase probabilities. Develop more effective or efficient marketing mixes. Develop more effective or efficient marketing mixes. Identify market segments, emerging markets and competitive threats. Identify market segments, emerging markets and competitive threats.

How do customers decide what to buy? One Relevant Question:

A Model of Consumer Behaviour Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation Internal Search Memory External Search Exposure Attention Comprehension Acceptance Retention Stimuli: Marketer Dominated & Other DissatisfactionSatisfaction Environmental Influences Culture Social Class Personal Family Situation Individual Differences Resources Motivation & Involvement Knowledge Attitudes Personality, Values & Lifestyle INPUTINFORMATION PROCESSING DECISION PROCESSINFLUENCES From: Consumer Behavior (1994). James F. Engel, Roger D. Blackwell & Paul W. Miniard. 7th. Edition. Dryden Press.

A Model of the Buying Decision Process: CONSUMERS Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation

Influences on the PDP Environmental Influences Culture Culture Social Class Social Class Personal Personal Family Family Situation Situation Individual Differences Resources Resources Motivation & Involvement Motivation & Involvement Knowledge Knowledge Attitudes Attitudes Personality, Values Personality, Values & Lifestyle & Lifestyle

Marketing Influences: The Marketing Strategy. 4Ps + TM 4Ps + TM Product Product Price Price Promotion Promotion Place Place integrated to serve a Target Market Target Market

Influences on the Extensiveness of the BDP Riskiness Riskiness Personal relevance Personal relevance Time Time Leads to a BDP Continuum

Buying Decision Process Continuum Extended Problem Solving Mid-Range Problem Solving Limited Problem Solving

The full process may not be followed Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation

First Purchase. Extended Problem Solving Involves all the stages of the PDP Involves all the stages of the PDP Detailed & rigorous Detailed & rigorous Preconditions: Preconditions: Involvement high Involvement high Strong differentiation Strong differentiation Time available Time available

First Purchase. Extended Problem Solving Implications: Implications: In marketing communications argumentation is likely to be more effective than presentation. In marketing communications argumentation is likely to be more effective than presentation. Buyers are more likely to notice brand differences Buyers are more likely to notice brand differences

First Purchase. Limited Problem Solving IS and EA stages limited or missed IS and EA stages limited or missed Preconditions: Preconditions: Constrained resources Constrained resources Low motivation/involvement Low motivation/involvement Limited perceived differentiation Limited perceived differentiation

First Purchase. Limited Problem Solving Implications: Implications: When involvement is low presentation is more effective than argumentation. When involvement is low presentation is more effective than argumentation. Search limited to known brands; unknown brands are doomed. Search limited to known brands; unknown brands are doomed. Distribution and POP advertising crucial. Distribution and POP advertising crucial. Satisfaction leads to habitual purchase out of inertia. Satisfaction leads to habitual purchase out of inertia.

First Purchase. Mid-Range Problem Solving Between EPS and LPS Between EPS and LPS

Buyer Decision Process: Model and Continuum PRISEAPPPE PRiseaPPPE EPS MRPS LPS Habit PRiseaPPPE PRPPPE

Buyer Decision Process: DYNAMICS PRISEAPPPE PRiseaPPPE EPS MRPS LPS Habit PRiseaPPPE PRPPPE All else equal, the tendency is for decision-making to become habituated with repetition.

Buyer Decision Process: Strategic Implication PRISEAPPPE PRiseaPPPE EPS MRPS LPS Habit PRiseaPPPE PRPPPE There’s an advantage to being first in a new market.

Repeated Purchases Repeated purchasing tends to habitual decision-making Repeated purchasing tends to habitual decision-making However, repeated problem-solving can occur e.g. when: However, repeated problem-solving can occur e.g. when: Buyer dissatisfied Buyer dissatisfied Supplier is out of stock Supplier is out of stock

Habitual Decision-Making Reflects either Brand Loyalty or Inertia Brand Loyalty Brand Loyalty Reflects High involvement and perceived differentiation Reflects High involvement and perceived differentiation Highly desired by marketers! Highly desired by marketers! Inertia Inertia Brand switching easily induced by price competition or new claim from competitors Brand switching easily induced by price competition or new claim from competitors

Special Categories of Purchase Decisions Impulse buying Impulse buying Variety-seeking Variety-seeking

Models can be diagnostic. Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation Period 2 Period 1 % of Potential Market at each Stage