Chapter 5

Understanding Consumer and

Business Buyer Behavior

1
 Learning Outcomes
1. Demonstrate an understanding of marketing
strategies in relation to consumer needs and the
marketplace.
2. Relate the core concepts of marketing such as
positioning, targeting, and similar strategies in
making decisions.
3. Apply marketing mix elements to produce the
desired response in a given target market.

2
 Learning Objectives

1. Understand the consumer market and the

major factors that influence consumer
buyer behavior

2. Identify and discuss the stages in the buyer

decision process

3. Define the business market and identify

the major factors that influence business
buyer behavior
3
 Overview
In this chapter, we continue our marketing journey
with a closer look at the most important element of
the marketplacecustomers.
The aim of marketing is to affect how customers
think about and behave toward the organization
and its market offerings.
But to affect the whats, whens, and hows of buying
behavior, marketers must first understand the
whys.
We look first at final consumer buying influences
and processes and then at the buying behavior of
4
business customers.
 Overview
Definition of Consumer Buyer Behavior

Characteristic Affecting Consumer Behavior

1. Cultural (Culture, Subculture, & Social Class)

2. Social (Reference Groups, Family, and Role &
Status)
3. Personal (Age & Lifecycle, Occupation, Economic,
Lifestyle, Personality & Self Concept)
4. Psychological (Motivation, Perception, Learning,

5
Belief and Attitudes)
 Overview
Buyer Decision Process

Definition of Business Markets

Factors that influence business buyer behavior

1. Environmental factors
2. Organizational factors
3. Interpersonal factors
6
4. Individual factors
 Learning Objective 1
Understand the consumer market and the major
factors that influence consumer buyer behavior

7
 Consumer Markets and Consumer
Buyer Behavior
Consumer buyer behavior refers to the buying
behavior of final consumers.
Individuals and households who buy goods and
services for personal consumption.
All of these consumers combine to make up the
consumer market.
E.g.: The American consumer market consists of
more than 300 million people. The world
consumer market consists of more than 6.6 billion
people.

8
 Characteristics Affecting Consumer
Behavior

9
 Cultural factors
a) Culture
Set of basic values, perceptions, wants &
behaviors learned by a member of society from
family & other important institutions.
Marketers are always trying to spot cultural
shifts.
E.g.: Increasing concern about health & fitness
has created huge industry for health & fitness
services, exercise equipments, more natural
foods & variety of diet.

10
 Cultural factors
b) Subculture
Subcultures are groups of people with shared value
systems based on common life experiences and
situations.
Each culture contains smaller subcultures.
Subcultures include nationalities, religions, racial groups
and geographic regions.
E.g.: Mature consumers are becoming a very attractive
market.
Matured consumers are
becoming very attractive
market. They desire to
look as young as they
feel. So, marketers grab
the opportunity by
11 producing skin care
products and health
 Cultural factors
c) Social Class
Social Classes are societys
relatively permanent and
ordered divisions whose
members share similar
values, interests, and
behaviors.
Social class is not
determined by a single
factor, but is measured as a
combination of occupation,
income, education, wealth,
and other variables.
12
 Social factors
a) Groups:
Reference group: serve as direct / indirect points of
reference in forming persons behavior.
Product/brand tend to be strongest when its visible to
others whom the buyers respects.

13
 Social factors
b) Family:
Family members can strongly
influence buyer behavior

c) Roles and Status:

) Role: Expected activities to perform according to
the person around them. Role will carry status.
(e.g.: Role as CEO)
) Status: Esteem given to role by society
(e.g.: as a manager, they will buy the clothing that
reflects their role & status)

14
 Personal factors
a) Age and Life-cycle Stage:
People change the goods and services they buy over
their lifetimes.
Marketers are increasingly catering to a growing
number of alternative, nontraditional stages such as
unmarried couples, singles marrying later in life,
childless couples, same-sex couples, single parents,
extended parents (those with young adult children
returning home), and others.
Taste in food, clothes are often age related.
b) Occupation:
) A persons occupation affects the goods and services
bought.
) E.g.: Executive workers tend to buy more business
15 suits.
 Personal factors
c) Economic Situation:
A persons economic situation will affect product
choice.
E.g.: Car

Nissan
Toyota Serena
Alphard
d) Lifestyle:
) A persons pattern of living as expressed in his or her
psychographics
) Pattern of living as expressed via a persons activities
(hobby/sport/social event), interests (food/fashion),
16
and opinions (about business/products).
 Example:
Age & Life cycle

babies older
beginners
Kids teenagers

Lifestyle

17
 e) Personality & Self-concept
Personality refers to the unique psychological
characteristics that lead to relatively consistent and
lasting responses to ones own environment.
Generally defined in terms of traits such as Sincerity (down-to-
earth, honest, wholesome, and cheerful)
Excitement (daring, spirited, imaginative, and up-to-date)
Competence (reliable, intelligent, and successful)
Sophistication (upper class and charming)
Ruggedness (outdoorsy and tough)

18
 Personality & Self-concept
Self-concept (self image) suggests that peoples
possessions contribute to and reflect their
identities.
We are what we have
E.g.: The new Nescafe Gold is for those who
appreciate finer things in life

19
 Psychological factors
a) Motivation
A motive (or drive) is a need that is sufficiently
pressing to direct the person to seek satisfaction.
Maslow sought to explain why people are driven by
particular needs at particular times.
Person has many needs at given time such as
hunger; esteem; belonging.

20
 Psychological factors
b) Perception
Process by which people select, organize, and
interpret information to form a meaningful picture of
the world
People learn by the flow of information through our
senses (sight; smell; taste; hearing; touch)
Each of us receive, organize, & interpret this
information in different way

21
 Psychological factors
c) Learning
When people act, they learn.
Changes in individuals behavior arising from
experience.
Strongly influenced by the consequences of an
individuals behavior
o Behaviors with satisfying results tend to be repeated.
o Behaviors with unsatisfying results tend not to be
repeated.

22
 Psychological factors

d) Belief and Attitudes

A belief is a descriptive thought that a person has
about something.
May be based on real knowledge.
If some beliefs are wrong, marketer need to have
a campaign to correct them.

An attitude describes a persons relatively

consistent evaluations, feelings toward an object.
Eg : digital camera buyers will have the attitude of
Buy the Best.
23
 Learning Objective 2
Identify and discuss the stages in the buyer decision
process

24
 Consumer Decision-Making
Process

Need
Need Recognition
Recognition

Information
Information Search
Search
Cultural,
Cultural, Social,
Social,
Personal
Personal and
and
Psychological Evaluation
Evaluation
Psychological
Factors of
of Alternatives
Alternatives
Factors
affect
affect
all
all steps
steps Purchase
Purchase
Postpurchase
Postpurchase
Behavior
Behavior
25
 Buyer Decision Process

26
 1) Need Recognition

Buyers recognize a need or problem

The NEED can be triggered by either:

a) Internal stimuli
b) External stimuli

As a result of internal (hunger/thirst)

or external stimuli
(advertisement/friend) & might you
thinking about buying a new product.
27
 1) Need Recognition

Preferred
Preferred
Present
Present State
State
Status
Status

Marketing helps consumers recognize

an imbalance between
present status and preferred state.

28
 2) Information Search
Information search may or may not occur.
Consumers can obtain information from any of
several sources.
Information Sources Description

Personal Sources
(evaluates products for Family, friends, neighbors, contacts
buyers)

Commercial Sources Advertising, salespeople, dealers, Web

(inform buyers) sites, packaging, and displays

Mass media articles or news programs,

Public Sources Internet searches, consumer rating
organizations
Using, handling, or examining the
29 Experiential Sources
product
 3) Evaluation of Alternatives
Alternative evaluation:
How the consumer processes information to arrive at
brand choices.
How consumers go about evaluating purchase
alternatives depends on the individual consumer and
the specific buying situation.
Some decisions involve a careful, logical, and
systematic evaluation by the consumer.
Some do little analysis, and rely on impulse and
intuition

30
 4) Purchase Decision
Generally, the consumers purchase decision will be
to buy the most preferred brand.
Two factors can come between the purchase
intention and the purchase decision.
Factors that influence the purchase decision:
Attitudes of others:
* If someone important to you thinks that you should
buy the lowest-priced product, the chances of your
buying a more expensive product are reduced.

Unexpected situational factors :

* Unexpected events may change the purchase
31 intention.
 5) Postpurchase Behavior
The difference between the consumers expectations
and the perceived performance of the good purchased
determines how satisfied the consumer is.
Example:

Performance BELOW Expectation =

Disappointment

Performance EQUALS Expectation =

Satisfaction

Performance ABOVE Expectation =

Happy & Delightful
32
 Lets Discuss This

Think of the last time you were unhappy with a

purchase or with a company.
How many people did you tell?
Did you let the company know about it?
Why or why not?
Have you ever returned to that store or brand?

33
 Involvement in Purchase Decision

High involvement purchase decisions

High level of potential social or economic
consequences.

Low involvement purchase decisions

Routine purchases

34
 Mini Discussion
Categorize each of the following as a high or low
involvement product:

Shampoo
Computer
Popcorn
Apartment
Cell phone

35
 Discussion - Scenario

Assume the your current small television set

(for which you paid RM 69.99 several years
ago) has developed wavy lines across the
screen and makes the people in your favorite
programs sound as though they are using
cheap walkie-talkie radios. Therefore, you
have decided to work during your holiday to
save money for the ultimate RM1,200 high-
definition television with surround sound.
Trace the steps of your decision process for
36
purchasing your new television.
 Answers
1. NEED RECOGNITION: Your present television has wavy lines
and poor sound quality, and you desire a new television set.
2. INFORMATION SEARCH: You check both internal and external
sources of information such as your own knowledge, opinions of
peers, information from magazines, and the advice of television
sales personnel.
3. EVALUATION OF ALTERNATIVES: You consider product
attributes of various television brands and models in an evoked
set. These attributes might include sound quality, looks, price,
warranty, brand name reputation, components, and so on.
4.PURCHASE: You buy the hi-def television after judging
alternatives.
5.POSTPURCHASE BEHAVIOR: You are satisfied with your
purchase, which was the result of extensive decision making.
Alternatively, you are dissatisfied with your purchase, return the
television, and begin the process again.
37
 Business Markets
Business buyer behavior refers to the buying
behavior of the organizations that buy goods and
services for use in the production of other
products and services that are sold, rented, or
supplied to others.
In the business buying process, business
buyers determine which products and services
their organizations need to purchase, and then
find, evaluate, and choose among alternative
suppliers and brands.

38
 Learning Objective 3
Define the business market and identify the major
factors that influence business buyer behavior

39
 Business Markets
Business markets involve far more dollars and
items than do consumer markets.

The main differences between business markets

and consumer markets are in :
1. Market structure and demand,
2. Nature of the buying unit,
3. Types of decisions and the decision process
involved.

40
 Business Markets

1. Market Structure and Demand

The business marketer normally deals with far
fewer but far larger buyers than the consumer
marketer does.
Business demand is derived demand - it ultimately
derives from the demand for consumer goods.

2. Nature of the Buying Unit:

Business purchases involve more decision
participants.
Business buying involves a more professional
purchasing effort.
41
 Business Markets

3. Types of Decisions and the Decision Process:

Business buyers usually face more complex
buying decisions. Involve large sums of money,
interaction with many people at many level of
org
Business buying process tends to be more
formalized. Need detailed product
specifications, written order, formal approval.
Buyers and sellers are much more dependent
on each other.

42
 Major Types of Buying
Situation
1. Straight re-buy
The buyer reorders something without any
modifications.
2. Modified re-buy
The buyer wants to modify product
specifications, prices, terms, or suppliers.
Better offer and new business
3. New task
The company is buying a product or service for
the first time.

43
 Involvement in Purchase

New Task Buying

INVOLVEMENT

Modified Re buy

Straight Re buy

44
 Involvement in Purchase

45
 Learning Outcomes
1. Demonstrate an understanding of marketing
strategies in relation to consumer needs and the
marketplace.
2. Relate the core concepts of marketing such as
positioning, targeting, and similar strategies in
making decisions.
3. Apply marketing mix elements to produce the
desired response in a given target market.

46
 Chapter 5

The End

47