Chapter 8: The buying process and buyer behaviour

Question 1

1. Discuss the meaning of customer strategy.

Answer 1

▸Customer Strategy: Plan that will result in maximum customer responsiveness.

Question 2

2. Explain the difference between consumer and business buyer.

Answer 2

▸Consumer Buyer Behaviour: Buying behaviour of individuals and households who buy goods and services for personal consumption.
▸Business Buyer Behaviour: Buying behaviour of organizations that buy goods and services for use in the production of other products and services or for the purpose of reselling or renting them to others at a profit.
▸Buying Centre: Cross-functional team of decision makers who often represent several departments.
▸Types of business buying situations:
1. New-task buy: A first time purchase of a product.
2. Straight rebuy: A routine purchase of previously purchased goods or services.
3. Modified rebuy: Purchasing when the buyer wants to reconsider product specifications, prices, or suppliers.
4. Systems selling: Type of selling that appeals to buyers who prefer a packed solution to a problem from a single seller, thereby avoiding all separate decisions involved in a complex buying situation.
▸Types of consumer buying situations:
1. Habitual buying decision: Requires very little involvement and in which brand differences are significant.
2. Variety-seeking buying decision: Decision motivated by desire for variety rather than by product dissatisfaction.
3. Complex buying decision: An often lengthy consumer decision characterized by a high degree of involvement.

Question 3

3. Understand the importance of alignment between the selling process and the customer’s buying process.

Answer 3

▸Buying process: Stages a buyer goes through when making a buying decision.

Question 4

4. Understand the buying process of the transactional, consultative, and strategic alliance buyer.

Answer 4

▸Transactional Process Buyer: Buyer is aware of the needs, become frustrated with salespeople who use needs assessment, problem solving, or relationship building. They facilitate a convenient hassle free purchase.
▸Consultative Process Buyer: Need help evaluating solution (lack of need awareness). Can be complex and/or expensive. Add value: conduct a systematic assessment of situation, help customer evaluate solutions, help resolve problems prior/after purchase.
▸Strategic Alliance Process Buyer: Requires careful study of the proposed partner. Both parties must be prepared to explain how they will add value and commit resources to establish and maintain the relationship.
▸Buyer Resolution Theory: Selling theory that a purchase will be made only after the prospect has made 5 buying decisions about the need, product, source, price, and time.

Question 5

5. Discuss the various influences that shape customer buying decisions.

Answer 5

*Marslow’s hierarchy of needs: basic human needs are arranged in a hierarchy according to their strength. As lower-level need is satisfied, the need at the next level demands attention.
▸Physiological needs: Primary or physical needs, including food, water, air warmth, and sleep.
▸Security Needs: Desire for protection from the elements and to be free from danger and uncertainty; buying decisions to support these needs could include clothing, shelter, and insurance.
▸Social Needs: A person’s desire for affection, identification with a group, and approval from others.
▸Esteem Needs: Desire to feel worthy in the eyes of others, to develop a sense of personal worth and adequacy or a feeling of competence and importance.
▸Self-Actualization: Need for self-fulfilment; a tapping of one’s full potential to meet a goal; the need to be everything one is capable of being.
▸Group influences: Forces that other people exert on customers’ buying behaviour. 4 major areas:
1. Role: set of characteristics and expected social behaviours based on the expectation of others. All the roles we assume may influence our buying behaviour.
2. Reference group: 2 or more people who have well-established interpersonal communications and tend to influence the values, attitudes, and buying behaviours, of one another. They act as a point of comparison and a source of information for a prospective buyer.
3. Social class: Group of people who share similar values, interests, and behaviours.
4. Culture and micro-culture: The values, beliefs, institutions, transmitted, behaviour patterns, and thoughts of a people and society.
▸Perception: Process through which sensations are interpreted using knowledge and experience.
▸Buying motive: An aroused need, drive, or desire that initiates the buying-decision process.
*Dominant buying motive: Motive that has the greatest influence on a customer’s buying decision.
▸Emotional buying motive: Motive that prompts the prospect to act as a result of an appeal to some sentiment or passion.
▸Rational buying motive: Motive that prompts the prospect to act because of an appeal to the prospect’s reason or better judgement such as price, quality, and availability of technical assistance. Generally these result from an objective review of available information.
▸Patronage buying motive: Motive that causes the prospect to buy a product from one particular company rather than another. Typical patronage buying motives include superior service, attractive decor, product selection, and competence of salesperson.
▸Product buying motive: motive that causes the prospect to buy one particular product brand or label over another. Typical product buying motives include brand, quality, price, and design or engineering preference.