B2B Marketing, Buying Process, Consumer Behaviour, Service Marketing, Retailing Flashcards
How does the business market differ from the consumer market?
Fewer and larger buyers
Closer customer supplier relationship
Professional purchasing: trained agents who follow organisation’s policies, constraints, and requirements
Multiple buying influences
More geographically concentrated buyers
Demand in the business market is derived from demand in the consumer market
Quite price elastic; inelastic demand; fluctuating demand
Who participates in the B2B buying process?
Initiators: request the purchase
Users: help to define the product requirements
Influencers: provide information for evaluating alternatives; e.g. technical personnel
Deciders
Approvers
Buyers: formal authority
Gatekeepers: e.g., purchasing agents, receptionists, telephone operators
How do consumer characteristics influence buyer behaviour?
- Cultural = fundamental determinant of a person’s wants and behaviours – culture (values), subculture (nationalities, religions, racial groups, and geographic region), and social class
- Social: reference groups (primary and secondary groups, aspirational groups), family, and social roles and statuses
- Personal: age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality, and self-concept (brand personality)
Individual characteristics like demographics and psychographics AND environmental influences like cultures and subcultures or group and personal influence
Define some social influence techniques.
- Heuristics: people more likely to comply if you give them a reason, even a placebic reason
- Foot-in-the-Door-Technique: complying with a small request makes people more likely to continue to be helpful/comply with a larger request, so resistcance decreases
- Door-in-the-Face-Technique: increasing compliance by an extreme request first and then a smaller, more moderate request
> reciprocity principle: reasonability of one person makes other person to reciprocate - That-is-not-all-Technique: offering a deal, then improving it by free items or reduction in the price > reciprocity principle: customer feels obligation to reciprocate to the “better deal” by accepting it
- Low-Ball-Technique: people more likely to comply with a request after they were not allowed to perform another request (even if the deal is no longer attractive) initional comitment: people feel obliged towards the requester
What major psychological processes influence consumer responses to a marketing program?
Motivation: biogenic and psychogenic needs
Freud, Maslow (Hierarchy of needs), and Herzberg theories of motivation
Perception = process by which we select, organise and interpret information
Selective distortion = tendency to interpret information in a way that fits our preconceptions consumers often distort information to be consistent with prior brand and product beliefs and expectations
Learning = changes in behaviour arising from experience; marketers build demand with strong drives, using motivating cues, and providing positive reinforcement
Emotions
Memory: short-term and long-term memory; brand associations (=all brand related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, etc.); SUCCES (simple, unexpected, concrete, credibility, emotion, stories)
Who is involved in the consumer decision process? (Decision making unit)
- Initiators
- Influencers
- Deciders
- Buyers
- Users
What are the steps in the consumer decision making process?
1) Problem recognition: triggered by internal or external stimuli
2) Information search: information sources (personal, commercial, public, experiential)
3) Evaluation of alternatives: evaluation process includes 1) try to satisfy a need, 2) looking for benefits from the product solution, 3) consumer sees each product as a bundle of attributes with varying abilities to deliver the benefits; influenced by beliefs and attitudes
4) Purchase decision: five subdecisions (brand, dealer, quantity, timing, payment method)
5) Post-purchase behaviour: dissonance from noticing certain disquieting features or hearing favourable things about other brands; communications should supply beliefs and evaluations that reinforce the consumer’s choice and help him feel good about the brand
What are factors affecting the decision to buy a product/service?
- Attitudes of others
- Unanticipated situational factors
- Perceived risk: functional, physical, financial, social, psychological, time
- Consumer’s level of post-purchase satisfaction: consumers could quit using the product or warn friends
- Use and disposal: product consumption rate as key driver of sales frequency
- The company’s actions
What are the strategies of companies in the problem recognition phase of the consumer decision process?
Companies can: change the actual state; change the desired state; or identify unfulfilled needs
What is the relevance of store atmospherics?
Store atmospherics > emotional response > behaviour
Vision and colour
Smell and fragrances
Music and hearing
Phonetics
Touch
Personal interaction
Waiting lines
Architecture and merchandising
Define experiential marketing.
- Assumes that consumers are emotional and impulsive
- Believes that functional benefits of products are the same for competitor products, so experience counts
- Focuses on consumption as a holistic experience
- Enriches consumer’s sensory, emotional, relational and intellectual experiences
What is post-purchase dissonance?
= Feeling of uncertainty and regret that customer experiences after buying a product
Results from cognitive dissonance = period of mental discomfort caused by conflicting beliefs and attitudes
Reasons for conflict:
* Customers feel the quality does not match expectations
* Customers buy impulsively without doing any research
* Buyers find another product having seemingly better features and pricing
* Competitor promises better after-sales service
* Customers find a review that makes them doubt the credibility of your business
How can companies reduce post-purchase dissonance?
Reduce PPD
* Display return policy, be transparent about shipping/package status, provide information, find out the reason behind the dissonance, take good post-sales service and care of customers, quality control; warranty, exchanges, and service
* Thank-your
* Complaint management
* Make returns easier
* Proactive PR
Explain the Elaboration likelihood model.
= model of attitude formation and change, describes how consumers make evaluations in both low- and high-involvement circumstances
dependent on ability and motivation of consumers
Central route =attitude formation or change stimulates much thought and is based on the consumer’s diligent, rational consideration of the most important product information
* High elaboration, requires effort, form an opinion based on central cues like information
Peripheral route = attitude formation or change provokes much less thought and results from the consumer’s association of a brand with either positive or negative peripheral cues; including celebrity endorsement, a credible source, or objects that generate positive feeling
* Low elaboration, little effort, form an opinion based on peripheral cues like feelings, moods, etc.
Differentiate low involvement from high involvement products.
High involvement products
* Extensive thought process involved and multiple variables considered
* Car purchase: involve friends and family, do internet research involved the public perception of the product, brand, external (influencers, peer group)
* Characteristics: high price, differentiation important, brand recall and valuation, higher customer perceived risk, available information and company communications, after sales services
* Decision influenced by: price, brand recall, wom, product features, differentiation, value, marketing, after sales service
Low involvement products
* Consumer does not think much before purchasing, low risk, faster decision making
* Most FMCG
* Characteristics: low price, low risk, not much differentiation, brand switching, availability and distribution, repeat purchase, impulse buying
