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LEARNING OUTCOMES
At the end of this chapter, you will be able to:
• describe the customer buying decision process
• explain the factors affecting consumer buying behaviour
• discuss the business buying behavior and its influencing factors
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3.1 Consumer Buying Behaviour
Definition of Consumers
• Consumers are individuals who boy products and services for themselves or
on behalf of their households. They are the final users or the end users of
these products.
• They buy things that enable them to survive the physical demands of life,
but they also use these purchases to indicate their roles in society, to
express their personalities, to reveal their attitudes and opinions, to
emphasise the values they hold, and to demonstrate their wealth.
• In brief, the purchased products and services are selected not only to
satisfy their psychological needs, but also their sociological needs.
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3.1 Consumer Buying Behaviour
The Meaning of Consumer Buying Behaviour
• Consumers buying behavior describes how consumers make purchase
decisions and how they use the purchased products. Therefore it is
important to understand:
How the decision-making process come about?
Why do consumers make the purchases?
What are the factors that influence consumer purchases?
• When buying products, you, a consumer, will generally go through the
consumer buying decision-making process. Most large companies conduct
in-depth research on consumer buying decisions to answer questions such
as what do consumers buy, where do they buy, how much do they buy, when
do they buy, why do they buy, etc.
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3.1 Consumer Buying Behaviour
The Meaning of Consumer Buying Behaviour (Cont’d)
• Consumers behavior is a study related to psychology and sociology of the
people, your customers or potential people. You study their behavior
because you want to know their reactions. With a proper understanding of
consumer behavior, managers can reduce uncertainty when creating the
marketing mix.
• To answer ‘why’ in consumer buying behavior and buying decisions is not
easy, as the answer is often locked deep within consumer minds.
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3.1 Consumer Buying Behaviour
Stimulus-response Model
• The consumer behavior model (the black box model) illustrates how people
respond either physiologically or psychologically to a stimulus.
• In this model, the black box is the consumer because you do not understand
the way consumer thinks and behaves. However, you can observe how the
consumer responds to certain inputs or stimuli.
• Consumers are affected by two types of marketing stimulus: from marketers,
and from the environment, that is, the external situation the consumer is in.
• For a marketer, finding out how consumers respond to stimulus is as important
as understanding the thought processes behind it, because this will help the
marketer to reap benefits.
• The consumer’s response is influenced by the consumer’s psychology and
characteristics. These factors will influence the buying decision process. 6
3.1 Consumer Buying Behaviour
Stimuli Consumer (black Buyer decision Post-decision
box) process process
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Specifying Market-oriented Business
Mission
Types Definition Marketer Action
Complex Buying Behaviour Consumer make complex decision Marketer can enhance a product’s
because they are unfamiliar with the strengths by providing more detailed
product or purchase the products information can direct feedback
infrequently. assistance.
Dissonance-reducing Buying Consumers are highly involved in the Marketers can provide purchase
Behaviour purchase, but are not able to see key convenience and good customer
differences among brand choices. service to make the purchase
selection more appealing to
consumers.
Habitual Buying Behaviour Consumers who buy frequently and Wide distribution, pricing, and sales
purchase low-cost items which require promotion strategies are means to
very little search and decisions efforts. increase sales.
E.g. soft drink, sweets, chocolates
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3.2 Factors Affecting Consumer Buying
Behaviour
Consumer Buying
Behaviour Reference group, Family, Roles
Social factors
and status
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3.3 Consumer Buying Decision-making
Process
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3.3 Consumer Buying Decision-making
Process
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3.3 Consumer Buying Decision-making
Process
Need recognition
• Need is realized through:
Internal stimuli: Customers may become aware of of the need due to
either physical or psychological factors, eg. Hunger or thirst. A young
adult needs tertiary education, elder looks for health supplement and
medication.
External stimuli: A need can also be triggered by an advertisement on
television colour of an automobile, a brand name mentioned by a friend,
or the smell of perfume used by a friend. This is where marketers role
come into play.
• Marketer’s objective is to identify unfulfilled needs and to get customers to
recognize the imbalance between current and desired needs.
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3.3 Consumer Buying Decision-making
Process
Information Search
• An external search may include information from several sources:
Personal sources, e.g. from family members, friends, neighbours,
acquaintances etc. These sources are the most effective. They tend to
legitimate or evaluate products for the buyer.
Commercial sources, e.g. from advertising, sales persons, dealers, displays
etc. Normally, these sources inform the buyer of what the product is. It
provides product knowledge and creates an attraction to buy the products.
Public sources, e.g. from mass media, customer-rating organisations who
provide information about the products.
Experiential sources, e.g. from one’s own or others experiences in
handling, examining and using the products.
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3.3 Consumer Buying Decision-making
Process
Evaluation of Alternatives
• There are several measures involved in evaluating the alternatives:
Benefit of product that customer can acquire by buying the products,
Degree of importance of each benefit – a consumer may put up certain
weightage to a particular benefit,
Brand beliefs as some customers go for brand image,
Utility functions of the product, and
Level of satisfaction that can be derived from the product.
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3.3 Consumer Buying Decision-making
Process
Purchase Choice
• At this stage, the consumer decides which product to but, or he/she may
decide not to buy the product at all. The consumer also decides on the
amount of purchase, the retailer and the salesperson to buy the product
from, the date and time to buy and also how to pay for the purchase.
• The consumer may quickly, especially if the product is on sale. Consumers
may also forgo the purchase if none of the options identified really meets
their needs and wants, or may postpone the purchase if more money needs
to be saved before buying.
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3.3 Consumer Buying Decision-making
Process
Post-purchase Behaviour
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3.4 Introduction to Business Buying
• Business buying
behavior involves
business buyers,
organizational and
consumer markets,
and buying centres.
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3.4 Introduction to Business Buying
• There are four main
categories of buyers
that are categorised as
business buyers. They
are producers,
resellers, governments
and institutions.
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3.4 Introduction to Business Buying
Characteristics Business Market Consumer Market
Number Few but large buyers Many but smalls buyers
Demand Derived from demand from Indivdiuals themselves
consumer market
Distribution structure More direct More indirect
Nature of buying unit More professional More personal
Type of decision and decision More people, complex and Small number, simpler and
process formalised informal
Use of reciprocity Yes No
Use of leasing Greater Lesser
Relationship More informal and closer More formal
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3.5 Factors Affecting Business Behaviour
Buying Centre
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3.5 Factors Affecting Business Behaviour
Business buying behavior involves business buyers, organizational and consumer markets, and
buying centres.
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3.6 Business Buying Decision-making
process
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