Chapter5: Understanding Consumer And Business Buyer Behaviour

Question 1

Consumer buyer behaviour

Answer 1

Buying behaviour of final comsumers

Question 2

Consumer market

Answer 2

All the individuals and households that buy or acquire goods and services for personal consumption.

Question 3

Factors influencing consumer behaviour

Answer 3

Cultural, social, personal, psychological.

Question 4

Cultural factors

Answer 4

Culture: set of basic values, perceptions, wants, and behaviours learned by an individual from family and other important institutions.

Subculture: group of people with shared value systems based on common life experiences and situations.

Social class: relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviours.

Question 5

Social factors

Answer 5

Groups, word-of-mouth influence, opinion leaders and influencer marketing, online social networks, family, roles and status.

Question 6

Personal factors

Answer 6

Occupation, age and family life-cycle, economic situation, lifestyle, personality and self-concept.

Question 7

Psychological factors

Answer 7

Motivation, perception, learning, beliefs and attitudes.

Question 8

Maslow’s hierarchy of needs

Answer 8

Physiological needs: hunger, thirst, shelter.
Safety needs: security, protection.
Social needs: sense of belonging, love.
Esteem needs: self-esteem, recognition, status.
Self-actualization needs: self-development and realization.

Question 9

Buyer decision process

Answer 9

The buying process starts long before the actual purchase and continues long after. In fact, it might result in a decision not to buy. Therefore, marketers must focus on the entire buying process, not just the purchase decision.

Need recognition —> information search —> evaluation of alternatives —> purchase decision —> post purchase behaviour.

Question 10

The buyer decision process for new products

Answer 10

Stages in the adoption process…

Consumer orientation —> consumer action:
Awareness —> becomes aware, but lacks information.
Interest —> seeks information about the product .
Evaluation —> considers whether to try the product.
Trial —> tries new product in small sample.
Adoption —> decides to use product regularly.

Question 11

Adopter categories based on relative time of adoption of innovations

Answer 11

New product marketers often target innovators and early adopters, who in turn influence later adopters.
Innovators —> early adopters —> early mainstream —> late mainstream —> lagging adopters

Question 12

The adoption process: characteristics influencing rate of adoption

Answer 12

Relative advantage: superior to existing products?
Compatibility: aligned with values of the market?
Complexity: degree of difficulty to use?
Divisibility: integrated into regular use?
Communicability: benefits easily described?

Question 13

Business buyer behaviour

Answer 13

Purchasing goods and services are used in the production of other products and services.

Question 14

Business-to-business (B-to-B) marketers

Answer 14

B2B marketers must understand business markets and business buyer behaviour.

Question 15

Business buying process

Answer 15

Determining which products and services to purchase:
Finding, evaluating, and choosing among alternative suppliers and brands.

Question 16

Business markets

Answer 16

Business markets are huge and involve more money and items than consumer markets.
Differ from consumer markets in terms of:
- market structure and demand
- nature of the buying unit
- types of decisions and the decision process.

Question 17

Market structure and demand

Answer 17

Business market structure and demand
- fewer but larger buyers
- derived demand: business demand that comes from the demand for consumer goods
- inelastic and fluctuating demand

Question 18

Nature of the buying unit

Answer 18

Nature of the business market buying unit
- more decision participants
- more professional purchasing effort

Question 19

Types of decisions

Answer 19

Business purchases
- more complex buying decisions
- large sums of money
- complex technical and economic considerations
- interactions among people at many levels of the buyer’s organization.

Question 20

Decision process

Answer 20

Buying processes
- longer and more formalized procedures
- buyer and seller more dependent on each other

Supplier development: systematic development of networks of supplier-partners to ensure a dependable supply of products and materials.

Question 21

A model of business buyer behaviour

Answer 21

1. The environment
   Marketing stimuli: product, price, place, promotion.
   Other stimuli: economic, technological, political, cultural, competitive.
2. Buying decision process (interpersonal and individual influences)
3. Buyer responses
   Product or service choice, supplier choice, order quantities, delivery terms and times, service terms, payment.

Question 22

Types of buying situations

Answer 22

Straight rebuy: buyer routinely reorders something without any modifications.
Modified rebuy: buyer wants to modify product specifications, prices, terms, or suppliers.
New task: buyer purchases a product or service for the first time.
Systems selling (or solutions selling): buying a packaged solution to a problem from a single seller & avoids the separate decisions involved in a complex buying situation.

Question 23

Participants in the business buying process

Answer 23

Buying centre: all the individuals and units that play a role in the purchase decision-making process.
- actual users of the product or service
- people who make the buying decision
- people and units influencing the buying decision
- people who do the actual buying
- individuals and units controlling the buying information

Question 24

Major influences on business buying behaviour

Answer 24

Environmental: the economy, supply conditions, technology, politics/regulation, competition, culture and customs.
Organizational: objectives, strategies, structure, systems, procedures.
Interpersonal: influence, expertise, authority, dynamics.
Individual: age/education, job position, motives, personality, preferences, buying style.

Question 25

Stages of the business buyer decision process

Answer 25

Buyers facing new, complex buying decisions usually go through all of these stages. Those making rebuys often skip some of the stages. Either way, the business buyer decision process is usually much more complicated than this simple flow diagram suggest.

Problem recognition —> general need description —> product specification —> supplier search —> proposal solicitation —> supplier selection —> order-routine specification —> performance review.

Question 26

E-procurement and online purchasing

Answer 26

Purchasing through electronic connections between buyers and sellers — usually online.

E-procurement occurs through:
- reverse auctions
- online trading exchanges
- company buying sites
- extranet links with key suppliers.

Question 27

Benefits and problems of E-procurement

Answer 27

Benefits:
- cuts transaction costs
- results in efficient purchasing for both buyers and suppliers
- reduces the time between order and delivery
- helps an organization keep better track of all purchases
- frees buyers from a lot of paperwork

Problems:
- can affect the customer-supplier relationship
- pits suppliers against one another