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MKTM028 Strategic Marketing
Week 4 : Buying Behaviour Dr Stephen Castle Dr Elizabth Kim Iain Bromley
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Learning Objectives Today we will:
Consider human needs and the complexity of people Look at major factors affecting buyer/consumer behaviour Understand the buying process Highlight the difference between consumer and organisational buying
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Customer Behaviour “It has long been recognised that marketing planning is ultimately driven by the marketing strategist’s perception of how and why customers behave as they do” Wilson et al (1992)
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Human needs…. Food…. Clothes……… Shelter Maslow’s hierarchy of needs
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The Complexity of People
“The things people buy now have personal and social meanings, in addition to their functional attributes. Products are recognised as: Symbolic of personal attributes and goals. Symbolic of social patterns and strivings.” S.J.Levy.
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Marketing as a “Synthetic” Discipline
Sociology MARKETING Geography Law Anthropology Economics History Psychology Philosophy? Politics?
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Who is the customer? Hooley et al. (2012)
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Understanding customers – the key questions
Hooley et al. (2012)
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Major Factors in Buyer Behaviour
Cultural Culture Subculture Social Class Social Reference groups Family Roles and status Personal Age Occupation Economic Lifestyle Personality Psychological Motivation Perception Learning Beliefs and Attitudes
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Culture Influences Buyer Behavior
Culture is the most fundamental determinant of a person’s wants and behaviors
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Characteristics of Social Classes
Within a class people tend to behave alike Social class conveys perceptions of inferior or superior position Class may be indicated by a cluster of variables (occupation, income, wealth) Class designation is mobile over time
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Major Factors in Buyer Behaviour
Cultural Culture Subculture Social Class Social Reference groups Family Roles and status
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Reference Groups Membership groups Primary groups Secondary groups
Aspirational groups Dissociative groups
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Major Factors in Buyer Behaviour
Cultural Culture Subculture Social Class Social Reference groups Family Roles and status Personal Age Occupation Economic Lifestyle Personality
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Lifestyle influences Multitasking Time-starved Money-constrained
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Major Factors in Buyer Behaviour
Cultural Culture Subculture Social Class Social Reference groups Family Roles and status Personal Age Occupation Economic Lifestyle Personality Psychological Motivation Perception Learning Beliefs and Attitudes
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Motivation Freud’s Theory Behavior is guided by subconscious
motivations Maslow’s Hierarchy of Needs Behavior is driven by lowest, unmet need Herzberg’s Two-Factor Theory Behavior is guided by motivating and hygiene factors
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Perception Selective attention Selective retention
Selective distortion
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Decision-making Processes
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Level of Perceived Risk
Risk - the uncertainty associated with consumer decisions and the outcomes of consumer decisions. Performance risk Financial risk Physical risk Social risk Psychological risk
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Level of involvement The degree of personal relevance and risk perceived by members of the target audience in a particular purchase situation. (Rossiter et al, 1991) High involvement consumer decisions expensive, unfamiliar, infrequent, high in effort and risk. Low involvement consumer decisions low cost, familiar, frequently purchased, low in effort and risk.
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Types of Buyer Behaviour
High Involvement Low Involvement Significant Differences Variety Seeking Complex Few Differences Dissonance-reducing Habitual
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Complex Buyer Decision-Making
Need Recognition Information Search Evaluation of Alternatives Purchase Decision Postpurchase Behaviour
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The Marketing Challenge
Outside Stimuli Marketing: value offerings Environmental: economic social cultural Buyer’s Black Box Buyer characteristics psychology decision processes Buyer’s Purchase Decisions Product Brand Dealer Timing Amount
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The Customer Dimension Organisational Buying
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Business-to-Business Marketing: main characteristics
Derived/inelastic demand Fewer, larger buyers/orders Decisions more complex – risk Customisation/negotiation Buying process formalised Mutual loyalties Distribution channels short More complex DMUs…………………...
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The Decision-making Unit
Influencer: “But it should be……..” The Purchase Decision Initiator: “We need……..” Buyer: “Please supply……..” User: “Put it here……..” Decider: “We’ll get……..” Gatekeeper: “You need to know..”
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Factors in Organisational Buying
Environmental Demand Economic outlook Interest rate Technology Political Competition Organisational Objectives Policies Procedures Structure, Systems Resources Interpersonal Individual Authority Status Empathy Persuasiveness Age Income Education Job position Personality Risk attitude
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Three types of purchase decision:
Routine purchase – items are familiar, frequently bought, low risk, from preferred suppliers, at a junior level or automatic re-ordering. Example – office stationery Implications for suppliers – existing: maintain product/service quality, close relationship, avoid complacency. New: break inertia. Participants Information Time/Risk Lo Hi
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Three types of purchase decision:
Limited problem-solving – rebuy with some change to spec, price, delivery, or supplier, product class familiar, quotations sought. Example – cars Implications for suppliers – existing: protect business, gear for competition. New: negotiate hard. Participants Information Time/Risk Lo Hi
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Three types of purchase decision:
Extensive problem-solving – no past experience, unfamiliar product, unfamiliar suppliers, high risk. Example – new machinery, buildings Implications for suppliers – new: identify members of DMU, criteria used. Participants Information Time/Risk Lo Hi
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Purchase Decision- making Process
Need recognition Product specification Supplier search Order Placed! Evaluation of proposals Supplier selection
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Purchase Decision- making Process
Need recognition Product specification Supplier search Order Placed! Evaluation of proposals Supplier selection Post-purchase evaluation
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Learning Objectives Today we will:
Consider human needs and the complexity of people Look at major factors affecting buyer/consumer behaviour Understand the buying process Highlight the difference between consumer and organisational buying
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