1. Chapter Six Consumer and Business Buyer Behaviour
Marketing: An Introduction Second Canadian Edition Armstrong, Kotler, Cunningham, Mitchell and Buchwitz
Chapter Six
Consumer and Business Buyer Behaviour
Copyright © 2007 Pearson Education Canada

2. Copyright © 2007 Pearson Education Canada
Looking Ahead
Understand the consumer market and the major factors that influence consumer buyer behaviour.
Identify and discuss the stages in the buyer decision process.
Describe the adoption and diffusion process for new products.
Define the business market and identify the major factors that influence business buyer behaviour.
List and define the steps in the business buying decision process.
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3. Consumer Buying Behaviour
Refers to the buying behaviour of people who buy goods and services for personal use.
The central question for marketers is:
“How do consumers respond to various marketing efforts the company might use?”
Chapter 6, page 204
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4. Model of Buyer Behaviour
Marketing and environmental stimuli enter the buyer’s Black Box.
Black Box consists of the buyer’s characteristics and buying processes.
Black Box in turn prompts buyers responses.
Product and brand choice.
Dealer choice.
Payment timing and amount.
Chapter 6, page 204
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5. Consumer Buyer Influences
Cultural factors.
Culture, subculture, social class.
Social factors.
Reference groups, family, roles, status.
Personal factors.
Age, lifecycle, occupation, income.
Psychological factors.
Motivation, perception, learning, beliefs, attitudes.
Chapter 6, page 205
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6. Copyright © 2007 Pearson Education Canada
Culture
Cultural is the most basic cause of a person's wants and behaviour.
Culture is learned from family, church, school, peers, colleagues.
Culture includes basic values, perceptions, wants and behaviours.
Chapter 6, page 204
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7. Copyright © 2007 Pearson Education Canada
Sub-Culture
Groups of people with shared value systems based on common life experiences.
Major groups:
Native Canadians.
French-Canadians.
Ethnic consumers.
Internet users.
Chapter 6, page
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8. Copyright © 2007 Pearson Education Canada
Social Class
Relatively permanent, ordered divisions.
Members share similar values, interests and behaviours.
Determined by a combination of:
Occupation.
Income.
Education.
Wealth.
Other variables.
Chapter 6, page
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9. Major Canadian Classes
Upper Class (3% - 5%).
Upper Uppers (< 1%).
Lower Uppers (2%- 4%).
Middle Class (40% - 50%).
Upper Middles.
Average Middles
Working Class (33%).
Lower Class (20%).
Upper Lowers.
Lower Lowers.
Chapter 6, page 208
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10. Copyright © 2007 Pearson Education Canada
Social Factors
Groups.
Reference groups, aspirational groups.
Importance of opinion leader.
Family.
Most important consumer buying organization.
Roles and status.
Expect activities and esteem given by society to those roles.
Chapter 6, page 212
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11. Copyright © 2007 Pearson Education Canada
Personal Factors
Occupation.
What we do affects what we need and how much we have to spend.
Trend towards more part-time employment and multiple jobs.
Economic situation.
Affects real spending and consumer confidence in borrowing.
Chapter 6, page 212
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12. Copyright © 2007 Pearson Education Canada
Personal Factors
Age and family life-cycle stage.
Consumer needs change over time.
Difference between chronological and perceived age.
Lifestyle.
a person’s pattern of living as expressed in his or her activities, interests and opinions.
Also known as psychographics, can capture more detail than personality or social class.
Chapter 6, page
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13. Lifestyle and Psychographics
SRI Consulting Values and Lifestyles typology (VALS) can be to classify people into one of eight groups.
Forrester’s Technographics scheme segments people into ten groups.
Chapter 6, page 213
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14. Personality and Self-Concept
Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment.
Generally defined in terms of traits.
Self-concept suggests that people’s possessions contribute to and reflect their identities.
Chapter 6, page 213
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15. Psychological Factors
Motivation.
Perception.
Learning.
Beliefs.
Attitudes.
Chapter 6, page 215
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16. Maslow’s Hierarchy of Needs
Physiological needs most important.
Safety needs – protection, security.
Social needs – sense of belonging, love
Esteem needs – status, recognition
Self-actualization needs – self-development
Chapter 6, page 215
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Perception
Information inputs.
The sensations received through the sense organs.
Perception.
The process of selecting, organizing and interpreting information inputs to produce meaning.
Chapter 6, page
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Perception
Selective attention.
selecting some inputs to attend to while ignoring others.
Selective distortion.
changing or twisting of information when it is inconsistent with personal feelings or beliefs.
Selective retention.
remembering information that supports personal feelings and beliefs and forgetting inputs that do not.
Chapter 6, page 218
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Learning
A relatively permanent change in behaviour due to experience.
Interplay of drives, stimuli, cues, responses and reinforcement.
Strongly influenced by the consequences of an individual’s behaviour.
Behaviours with satisfying results tend to be repeated.
Behaviours with unsatisfying results tend not to be repeated.
Chapter 6, page 218
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20. Copyright © 2007 Pearson Education Canada
Beliefs and Attitudes
Belief
descriptive thought that a person holds about something.
Attitude
describes a person’s consistently favourable or unfavourable evaluations, feelings and tendencies toward an object or idea.
Chapter 6, page
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21. Consumer Buyer Decisions
Need recognition -- Realize requirement.
Information search -- Assess various products.
Evaluation of alternatives -- Determine relative value of each.
Purchase decision -- Select best value.
Post purchase behaviour – Assess degree of satisfaction.
Chapter 6, page 219
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22. Copyright © 2007 Pearson Education Canada
Need Recognition
Buyer becomes aware of a difference between a desired state and an actual condition.
Individual may be unaware of the problem or need.
Marketers may use sales personnel, advertising and packaging to trigger recognition of needs or problems.
Recognition speed can be slow or fast.
Chapter 6, page
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23. Copyright © 2007 Pearson Education Canada
Information Search
This stage begins after the consumer becomes aware of the problem or need.
The search for information about products will help resolve the problem or satisfy the need.
There are various sources of information.
Chapter 6, page
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24. Sources of Information
Personal – most effective.
Family, neighbours, friends.
Commercial – most information.
Advertising, salespeople.
Public
Mass media, consumer rating groups.
Experiential.
Handling, examining, using the product.
Chapter 6, page
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25. Evaluate Alternatives
The consumer compares different brands or choices.
May use specific buying criteria, ranked according to importance.
May use objective or subjective measures to evaluate.
May be logical or emotional, depending on the situation.
Chapter 6, page
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26. Post Purchase Behaviour
Consumer satisfaction is a function of consumer expectations and perceived product performance.
If performance is below expectation, dissatisfaction results.
If performance meets expectations, satisfaction results.
If performance exceeds expectations, delight results.
Chapter 6, page
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27. Post Purchase Behaviour
The consumer compares performance against expectations for the product.
Level of satisfaction will influence repeat purchase.
Is it better to over-promise and under-deliver, or under-promise and over- deliver?
Chapter 6, page
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28. Copyright © 2007 Pearson Education Canada
Cognitive Dissonance
Buyer discomfort caused by post-purchase conflict.
Affects major purchases; anxiety of not knowing if the right choice was made.
Customer follow-up programs help to reduce this problem.
Chapter 6, page
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29. Copyright © 2007 Pearson Education Canada
New Product Adoption
When an organization introduces a new product, people do not begin the adoption process at the same time, nor do they move through it at the same speed.
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30. New Product Adoption Stages
Awareness – become aware of new product.
Interest – seek information about product.
Evaluation – decide whether trial makes sense.
Trial – try product on small scale.
Adoption – decide to purchase product.
Chapter 6, page
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31. Product Adopter Categories
Innovators are the first adopters of new products (2.5% of buyers).
They are venturesome – they try new ideas at some risk.
Early adopters are guided by respect (13.5%).
They are opinion leaders in their communities and adopt new ideas early but carefully.
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32. Product Adopter Categories
Early majority are deliberate (34%).
Although they rarely are leaders, they adopt new ideas before the average person.
Late majority are skeptical (34%).
They adopt an innovation only after a majority of people have tried it.
Laggards are tradition bound (16%).
They are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.
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33. Adoption Rate Influences
Relative advantage -- Compared to existing alternatives.
Compatibility -- Fit with current values and experiences.
Complexity -- Ease of understanding.
Divisibility -- Ability to trial on limited basis.
Communicability – Ability to communicate benefits.
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34. Copyright © 2007 Pearson Education Canada
Business Markets
Vast and involves far more dollars and items than do consumer markets.
Business buyers are organizations that buy goods and services for use in the production of other products and services that are sold, rented or supplied to others.
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35. Copyright © 2007 Pearson Education Canada
Business Markets
Market structure.
Fewer but larger buyers, concentrated.
Derived demand.
Based on purchases by consumers.
Nature of the buying unit.
Multiple decision-makers, rational.
The decision process.
More complex, formalized, dependent.
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36. Copyright © 2007 Pearson Education Canada
Business Markets
Market structure and demand:
Contains far fewer but larger buyers.
Customers are more geographically concentrated.
Business demand is derived from consumer demand.
Nature of the buying unit:
Business purchases involve more decision participants.
Business buying involves a more professional purchasing effort.
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37. Buyer Business Behaviour
Marketing and environmental stimuli enter the organization’s Black Box.
Black Box consists of the buying center and organizational buying processes,
Black Box prompts buyer responses.
Product, brand choice, supplier choice.
Order quantity, delivery terms.
Payment and service terms.
Chapter 6, page 204
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38. Copyright © 2007 Pearson Education Canada
Buying Situations
Straight rebuy.
The buyer routinely reorders something without any modifications.
Modified rebuy.
The buyer on reorder want to modify specifications, price, terms or suppliers.
New task buy.
The buyer purchases a product or service for the first time.
Chapter 6, page 204
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39. Business Buying Process
New or first-time purchase – new task.
Problem recognition.
General need description.
Product specification.
Supplier search.
Proposal solicitation.
Supplier selection.
Order-routine specification.
Performance review.
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40. Business Buying Centre
Decision-making unit of a buying organization is called its buying centre.
Buying centre members:
Users.
Deciders.
Influencers.
Buyers.
Gatekeepers.
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41. Business Buying Centre
Larger risk requires more decision participants.
More professional rational, structured process.
More formalized routines.
May use multiple buying criteria with higher weights on non-price factors.
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42. Business Buying Influences
Environmental-- primary demand, economics, supply conditions, laws, etc.
Organizational -- Objectives, policies, procedures, organizational structure and systems.
Interpersonal -- Authority, status, empathy and persuasiveness.
Individual -- Age, education, job position, personality and risk attitudes.
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e-Procurement
Advantages for buyers.
Access to new suppliers.
Lowers purchasing costs.
Hastens order processing and delivery.
Advantages for vendors.
Share information with customers.
Sell products and services.
Provide customer support services.
Maintain ongoing customer relationships.
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44. Copyright © 2007 Pearson Education Canada
Looking Back
Describe the consumer market and the major factors that influence consumer buyer behaviour.
Identify and discuss the stages in the buyer decision process.
Describe the adoption and diffusion process for new products.
Define the business market and identify the major factors that influence business buyer behaviour.
List and define the steps in the business buying decision process.
Copyright © 2007 Pearson Education Canada