Download Buyer Behaviour Slides File

NZDB541 – Fundamentals of Marketing
Students will understand factors affecting
buyer behaviour.
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The consumer market consists of all the
individuals and households who buy or acquire
goods and services for personal consumption.
Consumers vary tremendously in age, income,
education level, and tastes. And they buy an
incredible variety of goods and services.
How consumers make their choices among these
products takes us into a fascinating field
comprised of personal, cultural, and social
influences.
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Consumers make buying decisions every day.
And they make many different types of
purchases.
Most marketers undertake consumer research to
try to learn more about: what consumers buy,
who buys, how they buy, when they buy, where
they buy and, most importantly, why they buy.
The central question is:
How do consumers respond to the various
marketing stimuli the marketing organisation
might use?
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Internal:
Psychological
External:
Social
Behavioural
Characteristics
External:
Cultural
Internal:
Personal
1.
Complex Behaviour
2.
Dissonance Reducing Behaviour
3.
Habitual Behaviour
4.
Variety Seeking Behaviour
Need Recognition
Information Search
Evaluation of Alternative
Purchase Decision
Post Purchase Behaviour
Cognitive Dissonance
Satisfaction or Dissatisfaction
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A complex array of “unknowables” which can only be
inferred from visible behaviour:
Attitude
Motivation
Personality
Learning
Memory
Information Processing
Involvement
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Sigmund Freud assumes that people are largely
unconscious about the real psychological forces
shaping their behaviour.
He sees the person as growing up and repressing
many urges.
Abraham Maslow sought to explain why people are
driven by particular needs at particular times. Why
does one person spend much time and energy on
personal safety and another on gaining the esteem of
others?
 Maslow's answer is that human needs are
arranged in a hierarchy, from the most pressing to
the least pressing.
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When consumers express interest in buying a
product there are a number of questions we
might ask.
Why?
What is the person really seeking?
What needs is he or she trying to satisfy?
What is the person trying to achieve?
A person has many needs at any given time.
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A motivated person is ready to act. How the
person acts is influenced by his or her
perception of the situation. Two people with
similar motivation and in the same situation
might act quite differently because they
perceive the situation differently.
Perceptual Processes:
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Selective Exposure.
Selective Distortion.
Selective Retention.
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When people act, they learn. Learning describes
changes in an individual's behaviour arising from
experience.
Learning occurs through the interplay of drives,
stimuli, cues, responses and reinforcement.
The significance of learning theory to marketers
is that they can build demand for a product by
associating it with strong drives, using
motivating
cues and providing positive reinforcement.
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People acquire their beliefs and attitudes
through acting and learning.
A belief is a descriptive thought or conviction
that a person holds about something, and
involves holding an opinion.
Incorrect beliefs about product features or
brand image can block sales.
A buyer's decisions are also influenced by
personal characteristics such as:
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Age and life‐cycle stage
Occupation
Education
Economic situation
Personality & Self‐Concept
Consumer lifestyle
Cultural factors exert the broadest and deepest
influence on consumer behaviour. Marketers
need to understand the role played by:
◦ Culture.
◦ Cultural Diversity.
◦ Social Class.
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A consumer's behaviour is also influenced by
social factors, such as the consumer's
household type and reference groups, as well
as social roles and status.
These social factors can strongly affect
consumer responses, companies must take
them into account when designing their
marketing strategies.
Household types: changing lifestyles and
buying roles affect marketing decisions.
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Groups
◦ Membership groups.
◦ Reference groups.
◦ Opinion leaders
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Roles and Status
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Those people with whom we would like to
compare ourselves to.
◦ Examples popular sports personalities as David
Beckham and inspirational leaders like Barak
Obama.
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There is little chance of membership, but
nevertheless a strong affiliation with the
group’s norms and behaviours. Comparative
relevant!
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Those people who more realistically represent
our current equals or near equals.
Examples include our friends, neighbours and
co-workers. Parents, teachers and peers
provide us with norms, attitudes and values
through direct interaction.
These are called normative referents, in
comparison to comparative referents that
provide us with standards of achievement to
which we aspire e.g. sports heroes
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Those people that we would not like to be
like. Examples include famous celebrities
having a bad public image i.e. Tiger Woods
having an affair.
Initiator
User
Influencer
Buying
Decision
Buyer
Decider
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Awareness: the consumer is aware of the new product,
but lacks information about it.
Interest: the consumer seeks information about the new
product.
Evaluation: the consumer considers whether trying the new
product makes sense.
Trial: the consumer tries the new product on a small scale
to improve their estimate of its value.
Adoption: the consumer decides to make full and regular
use of the new product.
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Innovators
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Early Adopters
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Early Majority
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Late Majority
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Laggards
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Consumers in different countries may have some things in
common but their values, attitudes and behaviours may
vary a lot.
Marketers often adjust their products and communications
to reflect the differences.
Differences are often subtle and may result from physical
differences in consumers and their environment.
Other differences may include gestures, body
posture and manners.
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Business markets
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Business buyer behaviour
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Institutional and Government markets
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Business markets are all the
organisations that buy goods and
services to use in the production of
other products and services or for the
purpose of renting them to others at a
profit.
Business products may be described in three broad
groups:
1. Materials and parts: raw materials and manufactured
materials and parts, e.g. gold, car parts.
2. Capital items: items used in the production or
operations processes of firms consist of installations and
accessory equipment, e.g. buildings, plant, computers
and software.
3. Consumables: supplies required by organisations for
their day to day operations.
Market structure and demand is characterised
by factors such as:
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Fewer buyers
Larger buyers
Close supplier‐customer relationships
Geographically concentrated buyers
Derived demand
Inelastic demand
Fluctuating demand
More complex and formalised decisions – many
more things to consider and chains of
authority involved.
◦ Direct purchasing – buying from the original source
and not a reseller.
◦ Reciprocity – you buy from me and I’ll buy from
you.
◦ Leasing – for financial and operation reasons
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Of course marketers use the 7 P’s to create
stimuli.
However there is also other stimuli include
major forces in the environment:
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Economic
Technological
Political
Cultural
Competitive
Straight rebuy:
where the buyer reorders items without any
modifications. It is usually handled on a routine basis by
procurement officers.
Modified rebuy:
where the buyer wants to modify product
specifications, prices, terms or suppliers. It usually involves
more decision participants than the straight rebuy.
New task situation:
where a buyer purchases a product or service for the first
time.
Systems buying:
buying a packaged solution to a problem, thus avoiding all
the separate decisions involved in buying each item or
service separately. A Key Turn solution.
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Users are members of the organisation who will use
the product or service.
Influencers affect the buying decision. They often
help to define specifications and also provide
information for evaluating alternatives.
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Buyers have formal authority to select the supplier
and arrange terms of purchase.
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Deciders have formal or informal power to select or
approve the final suppliers.
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Gatekeepers control the flow of information to
others.
Environmental
Level of Primary
Demand
Organisational
Objectives
Economic Outlook Policies
Supply Conditions Organisational
Rates of
Technological
change
Political and
Regulatory
developments
Competitive
developments
Structure
Systems
Interpersonal
Authority
Status
Empathy
Persuasiveness
Individual
Age
Education
Job Position
Personality
Risk
Attitudes
Buyers
1.
Problem Recognition: The first stage, the
consumer recognises a problem or need.
2. General Need Description: Describes the
characteristics and quantity of the needed item.
3. Product Specification: The decision and
specification around the best technical product
characteristics for a needed item.
4. Supplier Search: The search to find the best
vendors.
5. Proposal Solicitation: The stage of the industrial buying
process in which the p buyer invites qualified suppliers to
submit proposals.
6. Supplier Selection: The review of proposals and
selection of a supplier/s
7. Order‐Routine Specification:
The buyer writes the final order with the chosen suppliers.
8. Performance Review: Satisfaction rating.
Note: E‐procurement, online purchasing, buying via the
internet is becoming the norm.
Institutional markets consist of institutions that
provide goods and services to people in their care,
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e.g. schools, TAFE colleges, polytechnics, universities,
hospitals, nursing homes, prisons etc
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The government market offers large
opportunities for many companies.
Government contain many separate buying units,
e.g. National and local government, and different
departments.
Government makes use of e‐procurement to gain
efficiencies.
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Government buyers are also affected by environmental,
organisational, interpersonal and individual factors.
Government is watched by outside publics that are
interested in how government spends tax payers’ money.
Governments usually require suppliers to submit bids or
tenders which are evaluated.
Governments tend to favour domestic suppliers.
Government buying decisions seem complex to suppliers
but government is generally helpful in providing
information about its buying needs and procedures.