Gbus 207. 5&6

GBUS 207
PRINCIPLES OF MARKETING
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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Lecture 5 & 6:
Markets Buyer Behaviour
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Markets Buyer Behaviour
Outline
Consumer Markets and Consumer Buyer

Behaviour
Business Markets and Business Buyer Behaviour
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Consumer Markets and Consumer Buyer Behaviour
Consumer Market all individuals and households who buy or

acquire goods and services for personal consumption.
Consumer Buyer Behaviour the buying behaviour of final

consumers.
Marketers want to know what consumers buy, where they

buy, how and how much they buy, when they buy and why
they buy.
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Model of Consumer Behaviour
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Factors Influencing Consumer Behavior
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Characteristics Affecting Consumer Behaviour

Cultural factors
Cultural factors exert a broad and deep influence on consumer behavior.
Subculture (groups of people with shared value systems based on common life
experiences & situations eg. Nationalities, religion, racial groups etc
Social class is measured by income, education, wealth and other variables eg.
upper class, middle class etc.
Social factors
Groups and Social Networks i.e. membership vrs reference groups,
word of mouth influence and buzz marketing (opinion leaders), online social
networks eg. MySpace.com., YouTube, Facebook
Family
Roles & Status
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Characteristics Affecting Consumer Behaviour

Personal factors
Age and Life-Cycle Stage
Occupation
Economic Situation
Lifestyle a persons pattern of living as expressed in their activities, interests &
opinions
Personality and Self-Concept eg. Brand personality a specific mix of human traits that
may be attributable to a particular brand examples Jeep = Ruggedness i.e. outdoorsy
& tough, Benz=accomplishment
Psychological factors
Motivation (Maslow s Hierarchy of Needs)
Perception (selective attention, selective distortion & selective retention)
Learning (changes in attitudes or behavior based on experience)
Beliefs and Attitudes (predisposition to respond to stimuli)
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The Four Types of Buyer Behaviour
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The Buyer Decision Making Process
This process consists of 5 stages:
Need Recognition triggered by internal or external stimuli
Information Search sources include personal, commercial, public and

experiential
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior
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The Buyer Decision Process for New Products
Adoption process is the mental process an individual goes through from

first learning about an innovation to final regular use.
The 5 Stages in the Adoption Process are:
Awareness becomes aware but lacks info
Interest seeks info
Evaluation should I or should I not try this new product
Trial tests the product on small scale
Adoption decides to make full / regular use of product
Awareness Interest Evaluation Trial Adoption

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Differences in Innovativeness Adopter Categories
Individual differences in innovativeness gives rise to 5 adopter

groups: innovators, early adopters, early majority, late majority and
laggards.
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Influence of Product Characteristics on Rate of Adoption
Relative advantage: The degree to which the innovation appears

superior to existing products.
Compatibility: The degree to which the innovation fits the values
and experiences of potential consumers.
Complexity: The degree to which the innovation is difficult to
understand or use.
Divisibility: The degree to which the innovation may be tried on a
limited basis.
Communicability: The degree to which the results of using the
innovation can be observed or described to others.
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Business buyer behavior refers to the buying behavior of the

organizations that buy goods and services for use in
production of other products and services that are sold,
rented, or supplied to others.
Business buying process is the process where business buyers

determine which products and services are needed to
purchase, and then find, evaluate, and choose among
alternative brands
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Characteristics of Business Markets vrs Consumer Markets
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Model of Business Buyer Behaviour
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Major Types of Buying Situations
Straight rebuy reordering without modification
Modified rebuy reordering with some modification
New task first time purchase
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Participants in the Business Buying Process
All the individuals and units that play a role in the purchase decision
making process is known as the buying center
They are:
Users are those that will use the product or service
Influencers help define specifications and provide information for
evaluating alternatives
Buyers have formal authority to select the supplier and arrange terms of
purchase
Deciders have formal or informal power to select and approve final
suppliers
Gatekeepers control the flow of information
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Major Influences on Business Buyers
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The Business Buying Process Model
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The Business Buying Process
Problem recognition occurs when someone in the company

recognizes a problem or need
Internal stimuli
Need for new product or production equipment
External stimuli
Idea from a trade show or advertising
General need description describes the characteristics and
quantity of the needed item
Product specification describes the technical criteria
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Value analysis is an approach to cost reduction where

components are studied to determine if they can be
redesigned, standardized, or made with less costly methods
of production
Supplier search involves compiling a list of qualified

suppliers
Proposal solicitation is the process of requesting proposals

from qualified suppliers
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Supplier selection is the process when the buying center

creates a list of desired supplier attributes and negotiates
with preferred suppliers for favorable terms and conditions
Order-routine specifications is the final order with the

chosen supplier and lists all of the specifications and terms of
the purchase
Performance review involves a critique of supplier

performance to the purchase terms
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E Procurement
Online purchasing
Company-buying sites
Extranets
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E Procurement
Advantages
Access to new suppliers
Lowers costs
Speeds order processing and delivery
Shares information
Sales
Service and support
Disadvantages
Can erode relationships as buyers search for new suppliers
Security
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Institutional Markets
Consist of hospitals, nursing homes, and prisons that provide

goods and services to people in their care
Characteristics
Low budgets
Captive audience
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Government Markets
Tend to favor domestic suppliers and require suppliers to

submit bids and normally award to the lowest bidder
Affected by environmental factors
Non-economic factors considered
Minority suppliers
Depressed suppliers
Small businesses
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Managing Marketing Information
The End
THANK YOU
28

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Gbus 207. 5&6

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GBUS 207

Markets Buyer Behaviour

Consumer Markets and Consumer Buyer

Business Markets and Business Buyer Behaviour

Consumer Markets and Consumer Buyer Behaviour

Consumer Market all individuals and households who buy or

Consumer Buyer Behaviour the buying behaviour of final

Marketers want to know what consumers buy, where they

Model of Consumer Behaviour

Factors Influencing Consumer Behavior

Characteristics Affecting Consumer Behaviour

Characteristics Affecting Consumer Behaviour

The Four Types of Buyer Behaviour

The Buyer Decision Making Process

This process consists of 5 stages:

Need Recognition triggered by internal or external stimuli

Information Search sources include personal, commercial, public and

The Buyer Decision Process for New Products

Adoption process is the mental process an individual goes through from

The 5 Stages in the Adoption Process are:

Awareness becomes aware but lacks info

Interest seeks info

Evaluation should I or should I not try this new product

Trial tests the product on small scale

Adoption decides to make full / regular use of product

Awareness Interest Evaluation Trial Adoption

Differences in Innovativeness Adopter Categories

Individual differences in innovativeness gives rise to 5 adopter

Influence of Product Characteristics on Rate of Adoption

Relative advantage: The degree to which the innovation appears

Business Markets and Business Buyer Behaviour

Business buyer behavior refers to the buying behavior of the

Business buying process is the process where business buyers

Characteristics of Business Markets vrs Consumer Markets

Model of Business Buyer Behaviour

Major Types of Buying Situations

Straight rebuy reordering without modification

Modified rebuy reordering with some modification

New task first time purchase

Participants in the Business Buying Process

Major Influences on Business Buyers

The Business Buying Process Model

The Business Buying Process

Problem recognition occurs when someone in the company

The Business Buying Process

Value analysis is an approach to cost reduction where

Supplier search involves compiling a list of qualified

Proposal solicitation is the process of requesting proposals

The Business Buying Process

Supplier selection is the process when the buying center

Order-routine specifications is the final order with the

Performance review involves a critique of supplier

Consist of hospitals, nursing homes, and prisons that provide

Tend to favor domestic suppliers and require suppliers to

Affected by environmental factors

Non-economic factors considered

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