1. Consumer and Business Buyer Behavior5
Consumer and Business Buyer Behavior

2. ROAD MAP: Previewing the Concepts
Understand the consumer market and the major factors that influence consumer buyer behavior.
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 behavior.
List and define the steps in the business buying decision process.

3. Consumer Buying Behavior
Refers to the buying behavior of people who buy goods and services for personal use.
These people make up the consumer market.
The central question for marketers is:
“How do consumers respond to various marketing efforts the company might use?”

4. Model of Buyer Behavior

5. Factors Influencing Consumer Behavior
Cultural
Culture
Subculture
Social Class
Social
Reference Groups
Family
Roles & Status
Personal
Age & Life-Cycle Stage
Occupation
Economic Situation
Lifestyle
Personality & Self-Concept
Psychological
Motivation
Perception
Learning
Beliefs & Attitudes

6. Culture is the Most Basic Cause of a Person's Wants and Behavior.
Culture is learned from family, church, school, peers, colleagues.
Culture includes basic values, perceptions, wants, and behaviors.

7. Culture Subculture Major Groups
Groups of people with shared value systems based on common life experiences.
Major Groups
Hispanic Consumers
African-American Consumers
Asian-American Consumers
Mature Consumers

8. Marketing to a Subculture
Sears is widely considered one of the most successful marketers to the U.S. Hispanic population. Its Spanish-language Web site features content and events carefully tailored to Hispanic consumers.

9. Culture
Social Class
Society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors.
Measured by a combination of: occupation, income, education, wealth, and other variables.

10. Major American Social Classes

11. Social Factors Groups Family Roles & Status Membership
Reference (opinion leaders)
Aspirational
Most important consumer
buying organization
Family
Role =Expected activities
Status =
Esteem given to role by society
Roles &
Status

12. Opinion Leaders
Marketers use buzz marketing by enlisting or even creating opinion leaders to spread the word about their brands.

13. Age and Life-Cycle Stage
Personal Factors
Age and Life-Cycle Stage
Occupation
Economic Situation

14. Pattern of Living as Expressed
Personal Factors
Lifestyle
Pattern of Living as Expressed
in Psychographics
Activities
Interests
Opinions

15. Jeep
Shows how a person’s lifestyle can help marketers understand consumer values and their impact on buying behavior.
Ad targets people who want to “leave the civilized world behind.”
Click Here to Visit Jeep's Website

16. Personality & Self-Concept

17. Personality & 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.

18. Maslow’s Hierarchy of Needs

19. Perception Perception Information Inputs Interpretation
Selective Exposure
Selective Distortion
Selective Retention

20. Perception
Information inputs are the sensations received through the sense organs.
Perception is the process of selecting, organizing, and interpreting information inputs to produce meaning.

21. Perception
Selective Attention: the process of selecting some inputs to attend to while ignoring others.
An input is more likely to reach a person’s awareness if it relates to an anticipated event.

22. Perception
Selective distortion is an individual’s changing or twisting of information when it is inconsistent with personal feelings or beliefs.
Selective retention is remembering information that supports personal feelings and beliefs and forgetting inputs that do not.

23. Learning
Learning: a relatively permanent change in behavior due to experience.
Interplay of drives, stimuli, cues, responses, and reinforcement.
Strongly influenced by the consequences of an individual’s behavior
Behaviors with satisfying results tend to be repeated.
Behaviors with unsatisfying results tend not to be repeated.

24. Beliefs & Attitudes
A belief is a descriptive thought that a person holds about something.
Attitude describes a person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

25. Interactive Student Assignment
Choose a partner and talk about some product for which each of you has strong attitudes. These attitudes can be either positive or negative. What led you to have these attitudes toward these products?

26. Buying Decision Process

27. Buying Decision Process
Step #1 = 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.

28. Need Recognition
Need recognition can be triggered by advertising. This ad from America’s Dairy Farmers alerts consumers of their need for more dairy products to build strong bones.

29. Buying Decision Process
Step #2 = 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.

30. Sources of Information
Personal
- Most effective source
- Family, friends, neighbors
- Advertising, salespeople
- Receives the most information
from these sources
Commercial
- Mass Media
- Consumer-rating groups
Public
- Handling the product
- Examining the product
- Using the product
Experiential

31. Buying Decision Process
Consumers May Use Careful Calculations & Logical Thinking
Consumers May Buy on Impulse and Rely on Intuition
Consumers May Make Buying Decisions on Their Own
Consumer May Make Decisions After Talking With Others
Marketers Must Study Buyers to Find Out
How They Evaluate Brand Alternatives

32. Buying Decision Process
Factors That Influence Purchase Decision
Unexpected
Situational
Factors
Attitudes Of
Others

33. Buying Decision Process
Consumer satisfaction is a function of consumer expectations and perceived product performance.
Performance < Expectations Disappointment
Performance = Expectations Satisfaction
Performance > Expectations Delight

34. Buying Decision Process
Cognitive dissonance: a buyer’s doubts shortly after a purchase about whether it was the right decision.

35. Stages in the Adoption Process
Awareness: Consumer becomes aware of the new product, but lacks information about it.
Interest: Consumer seeks information about new product.
Evaluation: Consumer considers whether trying the new product makes sense.
Trial: Consumer tries new product on a small scale to improve his or her estimate of its value.
Adoption: Consumer decides to make full and regular use of the new product.

36. The Adoption Process
This ad encourages trial by offering a coupon.

37. Product Adopter Categories
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.
Adopters are divided into five categories.

38. Product Adopter Categories
2.5% Innovators
16% Laggards
13.5% Early Adopters
34% Late Majority
34% Early Majority

39. Product Adopter Categories
Group #1 - Innovators
Innovators are the first adopters of new products.
They are venturesome – they try new ideas at some risk.

40. Product Adopter Categories
Group #2 – Early Adopters
Early adopters are guided by respect.
They are opinion leaders in their communities and adopt new ideas early but carefully.

41. Product Adopter Categories
Group #3 – Early Majority
Early majority are deliberate.
Although they rarely are leaders, they adopt new ideas before the average person.

42. Product Adopter Categories
Group #4 – Late Majority
Late majority are skeptical.
They adopt an innovation only after a majority of people have tried it.

43. Product Adopter Categories
Group #5 - Laggards
Laggards are tradition bound.
They are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.

44. Interactive Student Assignment
Choose a partner and come up with a list of items for which you fit into each of the product adopter categories. What is it about you that puts you into a different category for each of those products?

45. Influence of Product Characteristics on Rate of Adoption
Relative Advantage: Is the innovation superior to existing products?
Compatibility: Does the innovation fit the values and experience of the target market?
Complexity: Is the innovation difficult to understand or use?
Divisibility: Can the innovation be used on a limited basis?
Communicability: Can results be easily observed or described to others?

46. New Product Adoption Rate
Some products catch on almost overnight. Others, such as HDTV, take a long time to gain acceptance.

47. Business Markets & Business Buyer Behavior
The business market is vast and involves far more dollars and items than do consumer markets.
Business buyer behavior refers to the buying behavior of 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.

48. 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.

49. Types of Decisions and the Decision Process
Business buyers usually face
more complex buying decisions.
Business buying process
tends to be more formalized.
Buyers and sellers are much
more dependent on each other.

50. Business Markets
B2B marketers often roll up their sleeves and partner with customers to jointly create solutions. Here, Fujitsu promises, “Our technology will keep you moving upward, and our people won’t let you down.”

51. Model of Business Buyer Behavior

52. Major Types of Buying Situations
Straight Rebuy
The buyer routinely reorders
something without any
modifications.
The buyer wants to modify
product specifications,
prices, terms, or suppliers.
Modified Rebuy
The buyer purchases a
product or service for the
first time.
New Task

53. Participants in the Business Buying Process
Decision-making unit of a buying organization is called its buying center.
Not a fixed and formally identified unit.
Membership will vary for different products and buying situations.
Buying Center Members:
Users
Deciders
Influencers
Buyers
Gatekeepers

54. Buying Center
Allegiance Healthcare Corporation deals with a wide range of buying influences, from purchasing executives and hospital administrators to the surgeons who actually use its products.

55. Major Influences on Business Buyer Behavior

56. The Business Buying Process

57. e-Procurement Advantages for buyers: Advantages for vendors:
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

58. Click Here to Visit Covisint's Website
e-Procurement
Public trading exchanges like the auto industry’s Covisint exchange offer a “faster, more efficient way to communicate, collaborate, buy, sell, trade, and exchange information—business to business.” The exchange handled more than $50 billion in auto-parts orders last year.
Click Here to Visit Covisint's Website

59. Rest Stop: Reviewing the Concepts
Describe the consumer market and the major factors that influence consumer buyer behavior.
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 behavior.
List and define the steps in the business buying decision process.