Managerial Marketing

Consumer and Organisational Buyer Behaviour

Simple Response Model

Stimulus

Organism

Response

Consumers
Individuals or households that obtain products for the the satisfaction of their own needs

Model of Buying Behavior

Marketing Other stimuli stimuli
Product Price Place Promotion Economic Technological Political Cultural

Buyers Buyers decision characteristics process

Cultural Social Personal Psychological Problem recognition Information search Evaluation Decision Postpurchase behavior

Buyers decisions
Product choice Brand choice Dealer choice Purchase timing Purchase amount

Cultural Factors
Culture Subculture Social Class

Buyer

Social Factors

Reference Groups

Family

Roles & Statuses

Social Factors
Group Influence on Product Choice

Group Influence on Brand Choice

Strong

Weak Private Luxuries

Strong

Public Luxuries

Weak

Public Necessities

Private Necessities

Family Influences
Age and Life Cycle Stage Economic Situation Occupation

Lifestyle Identification
Activities Interests Opinions

Lifestyle - VALS 2
Abundant Resources Actualisers Status Principle Oriented Fulfilleds Achievers Oriented Action Oriented

Experiencers

Believers

Strivers

Makers

Strugglers Minimal Resources

Reference Groups For University

Camera club Athletic club Classmates Employees at job

Membership groups

Reference groups

Friends Family Dorm or roommates

Successful young businesspeople Professional athletes and entertainers

Spectators at various events

Psychological Factors

Motivation Beliefs & Attitudes Perception Learning

Psychology
The science of the mind, or of mental states and processes Influencing factors that originate from within the consumer Three Theories
Freud, Herzberg & Maslow

Beliefs and Attitudes

Certainty of outcome Evaluation of outcome

Attitude towards behaviour

Intention Evaluation by referents Motivation to comply Subjective norm Behaviour

Ajzen & Fishbein, 1980

Maslows Hierarchy of Needs

Self
Actualisation

Self-Esteem

Belongingness
Safety

Physiological

Perceptual Selectivity

All Stimuli

Selective Exposure

Selective Attention

Selective Interpretation

Retention

Discarded

Four Types of Buying Behavior

High Involvement Low Involvement

Significant differences between brands Few differences between brands

Complex Buying Behavior

VarietySeeking Behavior

DissonanceReducing Buying Behavior

Habitual Buying Behavior

Consumer Buying Roles

User Initiator

Buyer

Key Family Decision Roles

Influencer

Decider

The Buyer Decision Process

Need Recognition Information Search
Consumer recognizes that he needs to upgrade his computer. searches through PC World selects several different brands and models

Evaluation of Alternatives
Purchase Decision Post-purchase Behaviour

buy a Dell Computer by mail.

brand was a good choice.

Steps Between Evaluation of Alternatives and a Purchase Decision

Evaluation of alternatives Attitude of others Purchase intention Unanticipated situational factors Purchase decision

Stages in the Adoption Process

Awareness
Interest

Evaluation
Trial Adoption

Adoption of Innovations

Frequency of Adoption

Early Majority Innovators

Late Majority

Early Adopters

34%

34%

Laggards

13.5% 2.5%

16%

Early

Time of Adoption

Late

Influences on Rate of Adoption

Communicability Relative Advantage

Divisibility

Influences

Compatibility

Complexity

A Model of Business Buying Behaviour

The Environment

The Buying Organisation

The Buying Centre Buying Decision Process

Buyers Response

Organisational Buying
Institutional buying: buying products on behalf of an organization to be consumed in the course of the organizations business Buying for resale: buying of products to be resold unchanged as part of the organizations business Industrial buying: buying of raw materials and other inputs to be substantially changed in the course of the organizations business Government buying:

Characteristics of Business Markets

Market Structure and Demand

Other Characteristics

Characteristics of Business Markets

Nature of Buying Unit

Types of Decisions and Decision Process

Organizational Buying Characteristics

Sellers serve fewer customers
Purchasers deal direct with suppliers Focus on relationship rather than transaction Purchasers are expert buyers Organizational demand is derived demand
Relatively price inelastic Demand fluctuates

Institutional & Government Markets

Institutional Markets

Low Budgets

Captive Patrons

Government Markets

Centralized Buying Outside Publics

Public Review Submit Bids

Non-economic Criteria

Buying Centres
Gatekeepers Users

Buying Centre Deciders Influencers

Buyers

Stages in the Business Buying Process

Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review

Major Influences on Industrial Buying Behavior

Environmental
Level of demand Economic outlook Interest rate Rate of technological change Political and regulatory developments Competitive developments Social responsibility concerns

Organizational

Interpersonal
Objectives Policies Interests Authority Status Age Income Business Education Job position Buyer Personality Risk attitudes Culture

Individual

Procedures

Organizational Empathy structures PersuasiveSystems ness

Organizational Factors

PurchasingDepartment Upgrading

CrossFunctional Roles

Centralized Purchasing

Decentralized Purchasing of Small Ticket Items

Internet Purchasing

Long-Term Contracts

PurchasingPerformance Evaluation & Pro. Buyers

Lean Production

New Task Buying

Involved Decision Making

Custom furniture Installed components Buildings Weapon systems

Modified Rebuy

New vehicles Elec. Equip Consultants Computer equip.

Utilities Office Supplies Bulk chemicals

Straight Rebuy

Comparison of business & consumer buying situations

BUYING STEP 1 Need or problem recognition 2 General need description 3 Product specification 4 Information / supplier search 5 Proposal solicitation 6 Supplier selection 7 Order-routine specification 8 Post-purchase performance review INDUSTRIAL Anticipates Extensive Precise / technical CONSUMER Reacts Limited Benefits

Extensive Formal
Extensive

Limited Verbal
Limited analysis

Calculated re-order Extensive comparisons and benchmarking

Not routinised Little comparison