Chapter 5: Understanding Consumer and Business Buyer Behavior Flashcards
Define consumer buyer behavior.
It is the buying behavior of individuals whose purpose of buying these goods and services is for personal use.
Discuss buyer’s black box.
Buyer’s black box is the step that changes stimuli into buying responses of customers. This step is made at an unconscious level. Marketers are trying to study this step in order to get a better clear of customer buying behavior.
Discuss the factors influencing consumer behavior.
There are 4 main factors influencing consumer behavior:
1) Cultural -> culture (most basic cause*; reflects basic values, perceptions, wants and behaviors), subculture (shared value systems based on common life experiences: nationalities, religions, racial groups and geographic regions) and social class (wealth, income, education, etc.)
2) Social -> reference groups (opinion leaders, word-of-mouth influence, influencer marketing; goal: to make the brand a part of consumer’s conversations and lives), family (strong influence; stereotypes are relaxing) and roles and status (each person can have many roles and statuses in society).
3) Personal -> age and life cycle stage (single x= parents), occupation (e.g. clothings), economic situation (may be value conscious; solved by creating more value), lifestyle (aka psychographics; same subculture, social class, occupation but may different lifestyles; people also buy the values and lifestyles those products represent; “this product is more reflective of who I am”) and personality (self-concept; choose brands that match personality; “we are what we have”).
4) Psychological -> motivation (need to seek satisfaction; boomers want to feel young), perception (how people select, organize and interpret information; selective attention - screen out, selective distortion - interpret, what they already believe, selective retention - remember a brand they favor, forget competing brands; use lots of drama and repetition), learning (behaviors with satisfying results tend to be repeated) and beliefs and attitudes (e.g. Japan good product + good attitude)
Discuss total marketing strategy and how it contrasts subcultures.
Total marketing strategy is a technique in which marketers try to appeal to the similarities between each subculture rather than the differences between them.
However, it is extremely hard to execute since you also have to consider political/cultural issues and so on.
A prominent example of a company doing this would be IKEA whereas their commercial features interracial and blended families and couples.
Discuss cultural shifts and its potential for marketers.
Cultural shifts is when another market or time has a different culture compared to a starting point. This could potentially create new marketing opportunities since a new product could be missing in the new market. Example = Starbucks’ tea in China.
Discuss the buyer decision process.
There are five steps in the buyer decision process:
1) Need recognition - when a consumer is aware of a need; can be triggered by internal or external stimuli (e.g. ads)
2) Information search - consumers find more information from several sources e.g. personal, commercial, public, experiential
3) Evaluation of alternatives - depends on the specific buying situation and individual consumers
4) Purchase decision - attitudes of others and unexpected situational factors may interfere with buying decision
5) Post-purchase behavior - how satisfied the customer is of the product; can have cognitive dissonance - limit by offering memberships
Step 2 and 3 could be skipped if consumer has bought that product before.
Discuss the adoption process.
The adoption process involves 5 steps:
1) awareness - consumer becomes aware of the new product, but lacks information about it
2) interest - consumer seeks information about the new product
3) evaluation - consumer considers whether trying the new product makes sense.
4) trial - consumer tries new product on a small scale to improve their estimate of its value
5) adoption - consumer decides to make full and regular use of the product
How are adopters categorized?
Adopters are categorized into 5 groups:
1) Innovators (the first 2.5%)
2) Early adopters (the next 13.5%)
3) Early majority (the next 34%)
4) Late majority (the latter 34%)
5) Laggards (the last 16%)
State some product characteristics that influence rate of adoption.
Relative advantage, compatibility, complexity, divisibility, communicability
Define the business market and identify the major factors that influence business buyer behavior.
The business market is a market whereas it is composed of business entities.
It is different from consumer markets in that it contains fewer but larger buyer, business demand is derived from consumer demand and it has more fluctuating demand.
For the buying behavior of business markets, business buyers usually face more complex buying decisions, buying process tends to be more formalized and buyers and sellers are more dependent on each other in business markets.
Major factors include environmental, organizational, interpersonal and individual factors.
Elaborate on the types of buying decisions (business markets).
Buying decisions can be divided into:
1) Straight rebuy - buyers routinely reorders sth. without changing anything
2) Modified rebuy
3) New task - buyers buy sth. new for the first time
4) Systems (solution) selling - buying a complete solution to a problem
Discuss buying center.
Buying center is all the individuals and units that participate in business buying-decision process. It is not fixed or formally identified, making membership vary for different tasks.
List and define the steps in the business buying decision process.
1) Problem recognition - when businesses become aware that there is a problem
2) General need description - when businesses find the main idea on how to fix that problem
3) Product specification - when businesses dig into more details about what is specifically needed to fix that problem
4) Supplier research - when businesses find suppliers who could provide products that could fix that problem
5) Proposal solicitation - when businesses propose a proposition to the suppliers for that product
6) Supplier selection - when businesses select a supplier
7) Order-routine specification - when businesses actually order that product to fix the problem
8) Performance review - when businesses review how good that product is in fixing the problem
