CHAPTER 3

THE CONSUMER
BEHAVIOUR
Marketing

THE PURCHASE DECISION PROCESS

Problem Recognition
Consumer Information Processing
Evaluation of Alternatives
Purchase
Post Purchase Evaluation

FACTORS AFFECTING CONSUMER

BUYING BEHAVIOR
The Consumer and Psychological Influences
Social Influences
The Purchase Situation

THE CONSUMER AND

PSYCHOLOGICAL INFLUENCES

Motivation
Perception
a. Selective Exposure
b. Selective Attention
c. Selective Comprehension
d. Selective Retention
Learning
Attitudes
a. Family Influences
b. Peer group influences
c. Information
d. Experience
e. Personality --- Lifestyle

THE LEARNING PROCESS

FACTORS INFLUENCING ATTITUDE
FORMATION
Family
Peer group
Information
Experience
Personality
attitude

SOCIAL INFLUENCES
Personal Influence
Reference Groups
The Family
Social Class
Culture

THE PURCHASE SITUATION

The purchase task
Social surroundings
Physical Surroundings
Temporal effects
Antecedent states

QUESTIONS FOR DISCUSSIONS

What is the importance of learning consumer

behaviour?
Why is social class an important factor in buying
behaviour?

Activity:
Prepare a list of five products purchased by your
family indicate who is the information gatherer,
the influence, the decision maker, the purchaser
and the user

CHAPTER
THREE
The Buying Behaviour of Organizational Markets

INTRODUCTION

The consumer market consisting of individuals

and families are not the only customers
marketing firms can serve. There are other types
of buyers which may offer opportunities for the
marketer. This type of buyers consists of
organizations with buying behaviour that is
unique and different from those of the
consumers.

WHAT ARE ORGANIZATIONAL

MARKETS

1.
2.
3.
4.

Organizational markets are those that buy goods

for production purposes or for reselling. They
may be, classified into the following;
Industrial Markets
Reseller Markets
Government Markets
Non- Profit Organizations

INDUSTRIAL MARKET
Organizations that require goods and services for
the purpose of producing goods or services are
called industrial markets. The production output
of the industrial firms are sold for profit
e.g. Textile Firms Chemicals
Producers of Vegetable Hotels and
Restaurants
Publishers Universities and Colleges

RESELLER MARKETS
Are organizations that buy goods and services
which they later sell at a profit. Wholesalers and
retailers of drugs will qualify as the reseller of
drug manufacturing companies.
e.g. Mercury Drug Unilab
Most farmers sell their produce to persons who
later sell them to consumers. These middlemen
are the most visible forms of reseller market.

GOVERNMENT MARKETS
Government agencies that buy products and services
for use in the production of public goods and services
are referred to as government markets These
include the national, regional, provincial, and
municipal governments.
Examples of government markets are the following:
1. NFA buys palay from farmers
2. State Universities and Public Schools buy books and
school supplies from dealers or manufacturers
3. The AFP uniforms and transport equipment

NGO
Are nongovernmental organizations that serve
their customers but do not have profits as
organizational goal.
E.g. Girl Scouts, Red Cross, Knight Columbus,
Saint Nicholas Parish etc.

Characteristic

Organizational
Market

Consumer Market

YES

NO

Close
Supplier/Customer
Relationship
Geographical
Concentration of
Market
Derived Demand

YES

NO

YES

NO

YES

NO

Large Buyers

YES

NO

Inelastic Demand

YES

NO

Fluctuating Demand

YES

NO

Professional Purchasing

YES

NO

Few Buyers

ORGANIZATIONAL BUYING
AND ITS CHARACTERISTICS

1.
2.
3.
4.
5.
6.
7.

Organizational Buying Behaviour has unique

characteristics regarding the following:
Demand
Potential buyers
Buying objectives
Buying criteria
Size or order of purchase
Buyer-Seller Information
The Buying Centre

CONT...
Demand the demand for products and services
as required by organizations are derived from the
demand for consumer products and services
Potential Buyers firms that sell to
organizations have to deal with only a few
customers.
Buying Objectives organizations buy for the
purpose of making profits and this is done
through increasing sales or reducing costs.

CONT...

a.
b.
c.
d.
e.
f.

Buying Criteria organizations are concerned with

short and long term objectives. They used the
following criteria when buying products and services.
Price
Ability of the seller to meet the quality specifications
required for an item
Ability of the seller to meet required delivery schedule
; technical capability of the seller
Warranties and claim policies in the event of poor
performance
Past performance of the seller on previous contracts
Production facilities and capacity of the seller.

CONT...

Size of Order or Purchase the size of goods

purchased by the organization is typically larger and
they usually sets certain requirements concerning the
size of the order.
Buyer Seller Interaction the complexity of
organizational buying makes it necessary for buyer
and seller interaction to be more time consuming. e.g.
Long term negotiation
The Buying Centre a group consisting of several
people from different departments who participate in
the decision process of buying, the members share
knowledge of information relevant to the purchase of
a product or service.
e.g. Purchasing department either single or unit

KINDS OF BUYING PROCESSES

New- Task Buying happens when org. Has a new

need and the buyer wants a great deal of information.
Takes more time and involves the ff:
a. Setting product specifications
b. Identifying sources of supply
c. Establishing an order routing for possible future
purchases
Straight Re-Buy is a routine repeat purchase,
happens when previous purchase was satisfactory.
Modified Re-Buy- happens when the items purchased
remain the same but the members of the buying centre
are not satisfied with the product attributes. Involves
opportunity for other suppliers

PARTICIPANTS IN ORGANIZATIONAL
BUYING
1.
2.

3.

4.
5.
6.

USERS - ones who will use the products

INFLUENCERS - persons who influence the buying
decision e.g. Technical experts or buying centre
member
DECIDERS - persons who make decisions on
product requirements and suppliers. The buyer is
the decider in routine buying.
APPROVERS- persons who authorize the proposed
actions of deciders or buyers.
BUYERS persons who authorize to select the
supplier and arrange the terms of purchase
GATEKEEPERS - persons who have the power to
prevent seller or information from reaching
members of the buying centre.

PURCHASE DECISION-MAKING
PROCESS IN ORGANIZATIONS
1.
2.
3.
4.
5.

Recognition of a problem or need

Search for information about products and
suppliers
Evaluation and selection of supplier
The purchase
Performance evaluation and feedback

RECOGNITION OF A PROBLEM OR
NEED
FACTORS TO CONSIDER

Organizational purchasing is a result of product

and operational needs
An organizations needs can be identified by
different employees of the firm.
Progressive firms are engaged in requirements
planning. ( risk of supply shortage and price
increase)
The firm needs to determine the product
specifications

SEARCH FOR INFORMATION ABOUT

PRODUCTS AND SUPPLIERS
THE FOLLOWING MUST BE
A listing of products or services that will solve
CONSIDERED

the problem. ( value analysis and systematic

appraisal of product specifications)
Make or Buy Analysis sometimes firms
consider manufacturing their own needs due to it
is more economical and they want to minimize
the risk of a suppliers vulnerability to strike or
avoid price increase or poor service.
Information must be gathered about potential
suppliers

EVALUATION AND SELECTION OF

SUPPLIERS
Organizations are more formal and they use a set of
choice criteria which show the advantages offered by
each supplier.
Criteria Used are the following:
1. The quality of goods and services being considered for
the purchase
2. The characteristics and needs of the buyer
3. The suppliers ability to meet quality standards
4. The suppliers ability to meet delivery schedules
5. The price
6. Technical capability of supplier
In evaluation Rating Sheet is Prepared to facilitate
comparison in terms of total ratings.

THE PURCHASE
To achieve efficiency organizations prefer to
routinize their purchases, most often they will be
going through BLANKET PURCHASE ORDER
which is an agreement where the supplier
promises to resupply the buyer as needed on
agreed price and terms over a specified period of
time.
The Blanket Purchase order shuts other
suppliers until buyer is no longer satisfied with it
relationships with current supplier.

PERFORMANCE EVALUATION AND

FEEDBACK
Performance Evaluation steps are as follows:
1. The buyer inspects the delivered products to
determine whether it meets the required
specifications.
2. The user will determine if the purchased product
performs according to expectations
3. The buyer evaluates the suppliers performance on the
following
- promptness of delivery
- product quality
- after sales service
Purpose: provide necessary information in evaluating
proposals and selecting suppliers about similar
products in the future

WHAT INFLUENCES
ORGANIZATIONAL BUYERS
Economic such as price, product, quality and
service
Personal such as favours, attention and risk
avoidance.
Specifically influences on organizational buyers
may be classified as follows:
1. Environmental Factors politics, economics &
competition
2. Organizational Factors policies & procedures
3. Interpersonal factors members
4. Individual Factors - personal