Revel Flashcards - Chapter 3 Buyer behaviour.
What are the 4 influencing factors on the consumer decision buying process…
- Individual influences (personality, attitude)
- Group influences (sociocultural/ethical)
- Marketing Mix (4p’s)
- Situational influences (social class, family)
Problem recognition?
- Realising the current position or feeling is not a desired one, so decide to do something to change this through purchases.
Willingness and ability to fulfill emerging need?
- If problem recognition is to lead anywhere it requires both willingness and the ability to fulfil the emerging need.
Information search?
- What kind of purchase will solve the problem?
To find this out consumers will actively search relevant information which will be used to aid their decision making.
Time pressure can interfere with information search.
Information evaluation (how marketers can affect it?)
- Use communication campaigns (implant images of products in the consumer’s mind so they seem familiar.
- Stress a particular product attribute in the consumers mind and to ensure that the consumer believes that a particular brand is unsurpassed in terms of that attribute.
- reinforce through displays, leaflets
Decision:
- Suppliers can make it difficult or easy for potential customers to make their purchases.
Post purchase evaluation:
- Where consumers are trying to balance out the choice made against the doubts they still held about it.
- To reduce the consumer’s psychological discomfort marketers can respond to the need for post-purchase reassurance which may be done through advertising.
What is a routine problem solving?
Is a purchasing situation that the consumer is likely to experience on a regular basis.
What is impulse purchasing?
An impulse may be triggered by the realisation of a need or by external stimuli.
There is no conscious pre planning or information searches for these products.
How do retailers encourage unplanned purchase?
- The rise of internet shopping/ads online.
- Much promotion is based on buying on impulse.
What is limited problem solving?
- A buying situation which occurs less frequently.
- It is likely to occur in the choice of service products, e.g. holidays/dentists where the consumer has the opportunity to make the right choice.
- Necessity is to get it right the first time.
Extended problem solving?
- Represents a very serious investment of money, time and effort. So therefore the purchases are much higher risk. e.g. houses and cars.
- These purchases occur infrequently, the purchaser is motivated to gather as much information as possible.
what does STEEPLE stand for?
- Social
- Technological
- Economic
- Environmental
- Political
- Legal
- Ethical
7 external factors that businesses consider when analysing their external environment.
What are the influences on consumer buying behaviour:
- Family
- Sociocultural influences
- Social class
- Culture
- Subculture
- Perception
Sociocultural influences may help an individual to …
- Differentiate between essential and non-essential purchases.
- Prioritise purchases where resources are limited.
- Define the meaning of a product and its benefits in the context of their own lives.
Social class influences:
- Social class is a form of stratification that attempts to structure and divide a society.
However linking consumer behaviour with social class has limited usefulness. They rely on the main income earner but fail to put that into context of the rest of the household.
Culture influencing consumer buyer behaviour:
Culture = the personality of the society within which an individual lives. It manifests itself through the built environment, art, language, literature, music and the products that society consumes.
3 influences on culture are the individual, institutions and societal environment.
Marketers therefore have to understand culture so they have to allow it and support it and the marketing has to act within boundaries set by society and culture.
Subcultures influencing consumer buyer behaviour:
- Language may be an important determinant of subculture.
Reference groups influencing consumer buying behaviour:
- Reference groups are any groups to which an individual either belongs or aspires to belong e.g. professional bodies.
Different types of reference groups: Membership groups, aspirant groups and dissociative groups.
Membership: individual already belongs
Aspirant: desire to be in group, may make purchases to get into group.
Dissociative: move further away from groups they don’t want to be a part of.
Psychological influences on the individual:
Personality: marketers try to define particular personality traits within the target market and then base the marketing around these traits.
Perception (represents the way in which individuals analyse and interpret and make sense of info): unconscious filtering of info, perception may be coloured by previous experience and existing attitudes. Advertising is key for selective retention.
Learning: Marketers want consumers to learn why a consumer is buying a product.
Motivation: Maslows hierarchy of needs.
Attitudes ( is a stance an individual takes on a subject): Attitude affects consumer judgement. 3 components of attitude are cognitive (beliefs), affective (feelings) and conative (relates to the link with behaviour).
What are the 3 main classes of B2B customers:
- commercial enterprises (profit organisations which produce and re-sell goods and services.
- government bodies (local and national governments purchase a lot e.g. army)
- institutions (largely non-profit making organisations such as universities, churches and independent schools.
Characteristics of B2B markets: demand and derived demand.
- Difference between consumer and B2B markets lies in the marketing mix and interaction between the buyer and seller.
- All demand in B2B markets is derived demand (derived from some kind of consumer demand)
Boeing aircrafts in China:
- Boeing aircrafts account for more than 50% of China’s commercial fleet.
- Boeing has the largest share of this market.
What is joint demand:
- B2B is often joint demand. As it is often closely linked with demand for other B2B products.
Example: demand for casings for computers is linked with demand for disk drives.
What is inelastic demand and elastic demand:
- Extent to which quantity of a product demanded changes when its price changes.
- Elastic demand means the product has a great deal of price sensitivity in the market.
- Inelastic demand means an increase in price will have little affect on quantity demanded.
Industrial concentration and the structure of demand:
- B2B markets have a smaller number of easily identifiable customers compared to consumer markets.
Geographic concentration:
- Some industries have a strong geographic bias. This may be due to resource availability, available infrastructure or government laws/incentives.
Buying-process complexity in B2B markets.
- B2B purchasers are always buying on behalf of other people, which implies certain differences from the consumer situation.
The marketer must appreciate these differences when designing strategies for encouraging trial and reordering.
Various dimensions of complexity:
B2B purchasing policy:
- Guidelines on favoured suppliers.
- How much can be spent on certain budgets.
- Ethical codes of practice
Professional purchasing:
- Risk and accountability of B2B purchasing means it has to be done professionally.
-
Purchase significance:
Routine re-buy: low risk, buying process quick involving few people
Modified re-buy
New task purchasing
2 models of organisational buying decision making are by …
Robinson eta al (1967).
Hilla nd Hillier (1977).
Robinson et al (1967) model of organisational buying decision making:
1) Anticipation of need
2) Determination of quality of required item.
3) Specification of quality of required item
4) Search for and qualification of potential suppliers.
5) Analysis proposals
6) Evaluation proposals and supplier selection.
7) Selection of order routine
8) Performance feedback and evaluation.
Hill and Hillier (1977) model of organisation buyer decision making.
1) Precipitation
2) Product specification
3) Supplier selection
4) Commitment
Precipitation (Hill and Hillier 1977):
- start of the process is the realisation that there is a need and a purchase can solve that problem. May be driven by internal or external influences.
Product specification (Hill and Hillier, 1977)
- Firms need to identify precisely what is required.
- Supplier evaluation looking at quality.
Supplier selection (Hill and Hillier 1977):
- Finding a supplier who can best meet specified criteria.
- If existing suppliers can do the job they are likely to be favoured as they are usually known and trusted.
- Depends on the nature of the purchasing task. As low risk purchasing may not warrant extensive supplier research, but for high risk purchasing as they are infrequent more lengthy procedures will be inplace to make sure the suppliers can deliver within strict time limits.
Commitment (Hill and Hillier 1977):
- Some buyers adopt formal appraisal procedures for their suppliers, covering key elements of performance, results will be discussed with suppliers concerned in the interests of improving their performance and maintaining relationship.
Evaluation of Hill and Hillier model (1977):
+ useful framework for discussing complexities in B2B buying.
- Difficult to generalise, stages may be merged together and the process may end at any stage.
Roles within the buying centre:
- Buying centre can be formally constituted (major capital project) or loosely informal.
- The roles in the B2B buying centre cover users.
