Chapter 5: Understanding Consumer and Business buyer Behaviour Flashcards
The aim of marketing is to
engage customers and affect how they think and act.
Consumer buyer behaviour
refers to the buying behaviour of final consumers—individuals and households that buy goods and services for personal consumption.
The consumer market
All of these final consumers combine to make up this
Most large companies research consumer buying decisions in great detail to answer questions about:
what consumers buy, where they buy, how and how much they buy, when they buy, and why they buy.
Characteristics Affecting Consumer Behaviour
cultural, social, personal, and psychological characteristics
Cultural Factors
Cultural factors exert a broad and deep influence on consumer behaviour. Marketers need to understand the role played by the buyer’s culture, subculture, and social class.
Culture
is the most basic cause of a person’s wants and behaviour.
Growing up in a society, a child learns basic values, perceptions, wants, and behaviours from his or her family and other important institutions.
A child in the United States normally is exposed to the following values
achievement and success, freedom, individualism, hard work, activity and involvement, efficiency and practicality, material comfort, youthfulness, and fitness and health.
In contrast, Canadians value
freedom; the beauty of our natural landscape; our belief in respect, equality, and fair treatment; family life; and being Canadian
Subculture
groups of people with shared value systems based on common life experiences and situations.
Subcultures include
nationalities, religions, racial groups, and geographic regions.
Examples of three such important subculture groups in Canada include
regional subcultures, founding nations, and ethnic subcultures.
Total Market Strategy
the practice of integrating ethnic themes and cross-cultural perspectives within their mainstream marketing.
An example is general-market commercials for brands such as Cheerios and IKEA that feature interracial and blended families and couples.
Social Classes
are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviours.
Social scientists have identified seven American social classes:
upper-upper class, lower-upper class, upper-middle class, middle class, working class, upper-lower class, and lower-lower class
Social class is not determined by a single factor, such as income, but is measured as a combination of
occupation, income, education, wealth, and other variables.
membership groups
Groups that have a direct influence and to which a person belongs
Reference groups
serve as direct (face-to-face interactions) or indirect points of comparison or reference in forming a person’s attitudes or behaviour.
opinion leaders
people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others
Word-of-mouth influence
The personal words and recommendations of trusted friends, family, associates, and other consumers tend to be more credible than those coming from commercial sources, such as advertisements or salespeople
Influencer marketing
involves enlisting established influencers or creating new influencers to spread the word about a company’s brands.
online social networks
online communities where people socialize or exchange information and opinions
range from blogs (Mashable, Engadget, Gizmodo) and message boards (Craigslist) to social media sites (Facebook, Twitter, YouTube, Instagram, Snapchat, LinkedIn) and even communal shopping sites
The family
is the most important membership reference group and consumer buying organization in society.
Personal Factors
personal characteristics such as the buyer’s occupation, age and life stage, economic situation, lifestyle, and personality and self-concept.
Lifestyle
is a person’s pattern of living as expressed in his or her psychographics.
It involves measuring consumers’ major AIO dimensions—activities (work, hobbies, shopping, sports, social events), interests (food, fashion, family, recreation), and opinions (about themselves, social issues, business, products).
Personality
refers to the unique psychological characteristics that distinguish a person or group. Personality is usually described in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness.
Brand personality
is the specific mix of human traits that may be attributed to a particular brand.
Psychological Factors
A person’s buying choices are further influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes.
A motive (or drive)
is a need that is sufficiently pressing to direct the person to seek satisfaction
interpretive consumer research,
to dig deeper into consumer psyches and develop better marketing strategies
Maslow’s hierarchy of needs
They include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs.
Perception
is the process by which people select, organize, and interpret information to form a meaningful picture of the world.
People can form different perceptions of the same stimulus because of three perceptual processes:
selective attention, selective distortion, and selective retention
Selective attention
the tendency for people to screen out most of the information to which they are exposed—means that marketers must work especially hard to attract the consumer’s attention.
Selective distortion
describes the tendency of people to interpret information in a way that supports what they already believe
Selective retention
means that consumers are likely to remember good points made about a brand they favour and forget good points made about competing brands
Learning
describes changes in an individual’s behaviour arising from experience. Learning theorists say that most human behaviour is learned. Learning occurs through the interplay of drives, stimuli, cues, responses, and reinforcement.
Cues
are minor stimuli that determine when, where, and how the person responds.
A drive
is a strong internal stimulus that calls for action
A belief
is a descriptive thought that a person holds about something.
Beliefs may be based on real knowledge, opinion, or faith and may or may not carry an emotional charge.
Attitude
describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea.
the buyer decision process consists of five stages:
1) need recognition,
2) information search,
3) evaluation of alternatives,
4) the purchase decision,
5) and postpurchase behaviour
Need Recognition
the buyer recognizes a problem or need.
The need can be triggered by internal stimuli when one of the person’s normal needs—for example, hunger or thirst—rises to a level high enough to become a drive.
A need can also be triggered by external stimuli. For example, an advertisement or a chat with a friend might get you thinking about buying a new car
Information Search
An interested consumer may or may not search for more information. If the consumer’s drive is strong and a satisfying product is near at hand, he or she is likely to buy it then.
If not, the consumer may store the need in memory or undertake an information search related to the need.
personal sources
family, friends, neighbours, acquaintances
commercial sources
advertising, salespeople, dealer and manufacturer web and mobile sites, packaging, displays)
public sources
mass media, consumer rating organizations, social media, online searches, and peer review
experiential sources
examining and using the product
Traditionally, consumers have received the most information about a product from
commercial sources
Evaluation of Alternatives
Next, marketers need to know about alternative evaluation, that is, how consumers process information to choose among alternative brands
How consumers go about evaluating purchase alternatives depends on the individual consumer and the specific buying situation
Purchase Decision
In the evaluation stage, the consumer ranks brands and forms purchase intentions. Generally, the consumer’s purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision.
Postpurchase Behaviour
After purchasing the product, the consumer will either be satisfied or dissatisfied and will engage in postpurchase behaviour of interest to the marketer
What determines whether the buyer is satisfied or dissatisfied with a purchase?
The answer lies in the relationship between the consumer’s expectations and the product’s perceived performance
Cognitive dissonance
or discomfort caused by postpurchase conflict. After the purchase, consumers are satisfied with the benefits of the chosen brand and are glad to avoid the drawbacks of the brands not bought. However, every purchase involves compromise.
new product
is a good, service, or idea that is perceived by some potential customers as new. It may have been around for a while, but our interest is in how consumers learn about products for the first time and make decisions on whether to adopt them.
adoption process
as the mental process through which an individual passes from first learning about an innovation to final adoption. Adoption is the decision by an individual to become a regular user of the product
Consumers go through five stages in the process of adopting a new product:
Awareness Interest Evaluation Trail Adoption
Awareness
The consumer becomes 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.
Trail
The consumer tries the new product on a small scale to improve his or her estimate of its value.
Adoption
The consumer decides to make full and regular use of the new product.
Early adopters
are guided by respect—they are opinion leaders in their communities and adopt new ideas early but carefully
Early mainstream
adopters are deliberate—although they rarely are leaders, they adopt new ideas before the average person
Late mainstream
adopters are skeptical—they adopt an innovation only after a majority of people have tried it.
lagging adopters
tradition bound—they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.
Five characteristics are especially important in influencing an innovation’s rate of adoption:
1) Relative advantage
2) Compatibility
3) Complexity
4) Divisibility.
5) Communicability
1) Relative advantage
The degree to which the innovation appears superior to existing products.
2) Compatibility
The degree to which the innovation fits the values and experiences of potential consumers
3) Complexity
The degree to which the innovation is difficult to understand or use
4) Divisibility.
The degree to which the innovation may be tried on a limited basis.
5) Communicability
The degree to which the results of using the innovation can be observed or described to others
Business buyer behaviour
refers to the buying behaviour of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others
business buying process
business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands.
Business-to-business (B-to-B) marketers
must do their best to understand business markets and business buyer behaviour
However, business markets differ in many ways from consumer markets.
The main differences are in market structure and demand, the nature of the buying unit, and the types of decisions and the decision process involved.
derived demand
it ultimately derives from the demand for consumer goods
supplier development
systematically developing networks of supplier-partners to ensure a dependable supply of the products and materials that they use in making their own products or reselling to others
There are three major types of buying situations
1) straight rebuy
2) modified rebuy
3) new task
straight rebuy
the buyer reorders something without any modifications. It is usually handled on a routine basis by the purchasing department.
modified rebuy
the buyer wants to modify product specifications, prices, terms, or suppliers.
new task
In such cases, the greater the cost or risk, the larger the number of decision participants and the greater the company’s efforts to collect information.
systems selling (or solutions selling)
often a key business marketing strategy for winning and holding accounts.
buying centre
consists of all the individuals and units that play a role in the business purchase decision-making process.
The Business Buyer Decision Process
1) Problem Recognition
2) General Need Description
3) Product Specification
4) Supplier Search
5) Proposal Solicitation
6) Supplier Selection
7) Order-Routine Specification
8) Performance Review
e-procurement
Online purchasing, often called e-procurement, has grown rapidly in recent years
