Consumer & Business

Buyer Behaviour

Chapter 6
Agenda

 Consumer Market and Major Factors that Influence

Consumer Buying Behavior
– Consumer Buying Decision Process
– Adoption and Diffusion Process for New Products
 Business Market and Major Factors that Influence
Business Buyer Behavior
– Business Buying Decision Process
 Term Project and Term Project Proposal
 Next Class
Two Types of Markets:

 Consumer
 Business
Think about Starbucks

 Why are consumers willing to pay $2.00 for a cup of

coffee?
 Who are Starbucks’ target markets?
 What is the marketing
communication message
Starbucks wants to convey?
 Why has Starbucks
been successful?
Understanding the Consumer Market

Product
Price
Buyer’s Buyer’s
Place
Black Responses
Promotion
Box

Marketing and Buyer

other stimuli Characteristics Product choice
Brand choice
Buying Dealer choice
Economic
Decision Purchase timing
Technological
Process Purchase amount
Political
Cultural

Figure 6-1
Traditional factors affecting consumer
purchasing behaviors

 Demographics (age, gender, income, etc.)

 Heredity and home environment
 Family life cycle
 Life changing events
 Cultural environment
 Social environment
 Situational environment
 Psychological Factors
Maslow’s Hierarchy of Needs
Different types of needs drive
behaviour to satisfy those needs in an
order of precedence Self-
Actualization
Most basic needs
Esteem
fulfilled first
Social
Safety
Physiological
Please refer to Question #3 on Page 250
of your Text

 Think about a specific major purchase

you’ve made recently.
 What buying process did you follow?
 What major factors influenced your decision?
 Consumer Decision-Making Process

Problem
Recognition
Information
Search
Evaluation
of
Alternatives
Purchase
Decision

Postpurchase
Evaluation
Information Search

Two ways of gathering information:

1. Internally
2. Externally

 Types of info sources:

 Commercial
 Public
 Personal
 Experiential
The Purchase Decision

Decision to purchase a particular product may

be based on several factors:
Attitudes of Others
Unexpected Situational Factors

What other factors influence the Purchase

Decision?
Postpurchase Evaluation

 Evaluation of product performance.

 Cognitive dissonance.

 Impacts future purchases.

 Impacts word-of-mouth communications.

Stages in the New Product Adoption
Process

 Adoption process:
– the mental process through which an individual
passes from first hearing about an innovation to
final adoption
 Consists of 5 Stages (These are exactly as
they indicate):
– Awareness
– Interest
– Evaluation
– Trial
– Adoption
 New Product Adoption RatesFigure 6-5

13.5% 34% 34%

Early Late
2.5% Early majority majority
16%
Innovators adopters
Laggards

Time of adoption of innovations

Source: reprinted with permission of the Free Press, a Division of Simon & Schuster, from
Diffusion of Innovations, Fourth Edition, by E.M. Rugers, 1983.
Influences on the Rate of Adoption

 Relative advantage
– How much better than existing alternatives?
 Compatibility
– Fit current values and experiences?
 Complexity
– Ease of understanding?
 Divisibility
– Can it be tried on a limited basis?
 Communicability
– Can the innovation be observed and communicated?
Two Types of Markets:

 Consumer
 Business
Distinguishing Characteristics of
Business Markets

 Concentrated Demand
 Derived Demand
 Purchasing Professionals
 Multiple Buying Influences
 Close Buyer-Seller Relationships
Business-to-Business Buying
Process

 Identification of a need
 Establishment of specifications.
 Identification of alternatives.
 Identification of vendors.
 Evaluation of vendors.
 Selection of vendors.
 Negotiate purchase terms.
Influences on the Business Buying
 Organization
– Buying centre, structure and systems, resources,
goals, environment and policies
 Individual
– Position, age, education, social situation, attitude
about risk, etc.
 Environmental
– Demand for the product, other external
environmental factors (i.e., regulatory, technology,
competition)
Types of Purchasing Decisions

 Straight Rebuy Buying Situation

– Routine Response Behavior

 Modified Rebuy Buying Situation

– Limited Problem Solving

 New Task Buying Situation

– Extensive Problem Solving
 Characteristics of the
Three Types of Buying Decisions

Straight Modified New

Rebuy Rebuy Task
Newness of Problem or Need Low Medium High
Information Requirements Minimal Moderate Maximum
Information Search Minimal Limited Extensive
Consideration of New Alternatives None Limited Extensive
Multiple Buying Influence Very Small Moderate Large
Financial Risks Low Moderate High

Routine Limited Extended

response prob. prob
solving solving
Multi-Attribute Model
Assessment of
The base score
Product or Supplier
Performance (P)

Assessing the Relative

The weight Importance of Each
Characteristic (I)
Example of the Multi-Attribute Model
Process
Vinyl Fabric Nylon Velvet Fabric
Characteristi Performa Importanc PxI Performa Importanc PxI
c nce e nce e
Score Weight Score Weight

Comfort 5 9 45 8 9 72
Durability 7 8 56 8 8 64
Guarantee 7 8 56 8 8 64
Price 10 6 60 1 6 6
Evaluation 217 206
Score
Next Class

 Read Chapter 7: Market Segmentation,

Targeting, and Positioning
 Complete Exercises 1,2,and 3 on page 295