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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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Markets Buyer Behaviour

Outline

Consumer Markets and Consumer Buyer


Behaviour

Business Markets and Business Buyer Behaviour

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

Model of Consumer Behaviour

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

Factors Influencing Consumer Behavior

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

The Four Types of Buyer Behaviour

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer 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


experiential

Evaluation of Alternatives

Purchase Decision

Postpurchase Behavior

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Consumer Markets and Consumer Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

Business Markets and Business Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

Characteristics of Business Markets vrs Consumer Markets

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

Model of Business Buyer Behaviour

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

Major Influences on Business Buyers

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

The Business Buying Process Model

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

The Business Buying Process

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

The Business Buying Process

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

E Procurement

Online purchasing

Company-buying sites

Extranets

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Business Markets and Business Buyer Behaviour

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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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)
Managing Marketing Information

The End

THANK YOU

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Otto Afiuc GIMPA Business School GBUS207 Principles of Marketing (First Semester, 2014/15 Academic yr)