Buyer Behaviour

consumer buying behavior Definition The process by which individuals search for, select, purchase, use, and dispose of goods and services, in satisfaction of their needs and wants. See also consumer decision making. Buying Behavior is the decision processes and acts of people involved in buying and using products.

 Need to understand: why consumers make the purchases that they make? what factors influence consumer purchases? the changing factors in our societ

 Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for: Buyers reactions to a firms marketing strategy has a great impact on the firms success. The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy. Marketers can better predict how consumers will respond to marketing strategies.

BUYING ROLES

INITATORS:INITATORS: The person who first suggest & think of the idea of buying the particular product. The person who first suggest & think of the idea of buying the particular product. INFLUENCER: The person who explicitly or implicitly has some influence on the final buying The person who explicitly or implicitly has some influence on the final buyingdecision of others.decision of others. DECIDER the decider is a person who ultimately determines any part or whole of thethe decider is a person who ultimately determines any part or whole of thebuying decision, i.e., whether to buy, what to buy, how to buy, when to buy, orbuying decision, i.e., whether to buy, what to buy, how to buy, when to buy, o rwhere to buy.where to buy. BUYER: the buyer is the person who actually purchase. Buyer may be decider orthe buyer is the person who actually purchase. Buyer may be decider ormay be other person.may be other person. USER: the person who actually uses or consumes the services or products.

 The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages. The buying process starts with need recognition. At this stage, the buyer recognises a problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins).

 An aroused customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins.

 A customer can obtain information from several sources: Personal sources: family, friends, neighbours etc Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale displays Public sources: newspapers, radio, television, consumer organisations; specialist magazines Experiential sources: handling, examining, using the product

 The usefulness and influence of these sources of information will vary by product and by customer. Research suggests that customers value and respect personal sources more than commercial sources (the influence of word of mouth). The challenge for the marketing team is to identify which information sources are most influential in their target markets.

 In the evaluation stage, the customer must choose between the alternative brands, products and services. How does the customer use the information obtained? An important determinant of the extent of evaluation is whether the customer feels involved in the product. By involvement, we mean the degree of perceived relevance and personal importance that accompanies the choice. Where a purchase is highly involving, the customer is likely to carry out extensive evaluation.

 High-involvement purchases include those involving high expenditure or personal risk for example buying a house, a car or making investments. Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the supermarket) have very simple evaluation processes.

 Why should a marketer need to understand the customer evaluation process? The answer lies in the kind of information that the marketing team needs to provide customers in different buying situations. In high-involvement decisions, the marketer needs to provide a good deal of information about the positive consequences of buying. The sales force may need to stress the important attributes of the product, the advantages compared with the competition; and maybe even encourage trial or sampling of the product in the hope of securing the sale.

 Post-purchase evaluation - Cognitive Dissonance The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as cognitive dissonance. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time. To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.

 Consumer purchases are influenced strongly by or there are four factors. 01. Cultural Factor 02. Social Factor 03. Personal Factor 04. Psychological Factor

 01. Cultural Factor : Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Class
Culture: The set of basic values perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Culture is the most basic cause of a persons wants and behaviour. Every group or society has a culture, and cultural influences on buying behaviour may vary greatly from country to country.

Sub Culture : A group of people with shared value systems based on common life experiences and situations. Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes nationalities, religions, racial group and geographic regions. Many sub culture make up important market segments and marketers often design products.

Social Class: Almost every society has some form of social structure, social classes are societys relatively permanent and ordered divisions whose members share similar values, interests and behaviour.

 02. Social Factors : A consumers behaviour also is influenced by social factors, such as the (i) Groups (ii) Family (iii) Roles and status
Groups : Two or more people who interact to accomplish individual or mutual goals. A persons behavious is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups. Some are primary groups includes family, friends, neighbours and coworkers. Some are secondary groups, which are more formal and have less regular interaction. These includes organizations like religious groups, professional association and trade unions.

Family: Family members can strongly influence buyer behaviour. The family is the most important consumer buying organization society and it has been researched extensively. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services.

Roles and Status : A person belongs to many groups, family, clubs, organizations. The persons position in each group can be defined in terms of both role and status. For example. M & X plays the role of father, in his family he plays the role of husband, in his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the persons around them.

 03. Personal Factors : It includes i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v) Personality and self concept.
Age and Life cycle Stage: People changes the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle.

Occupation : A persons occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. A Co. can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors.

Economic situation : A persons economic situation will affect product choice

Life Style : Life Style is a persons Pattern of living, understanding these forces involves measuring consumers major AIO dimensions. i.e. activities (Work, hobbies, shopping, support etc) interest (Food, fashion, family recreation) and opinions (about themselves, Business, Products)

Personality and Self concept : Each persons distinct personality influence his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to ones own environment.

 04. Psychological Factors : It includes these Factors. i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes Motivation : Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need

Perception : The process by which people select, Organize, and interpret information to form a meaningful picture of the world.

Learning: Changes in an individuals behaviour arising from experience.

Beliefs and attitudes : Belief is a descriptive thought that a person holds about something Attitude, a Persons consistently favourable or unfavourable evaluations, feelings, and tendencies towards an object or idea

 Andreason (1965) proposed one of the earliest models of consumer behavior.This model is shown in Figure 2.1.The model recognizes the importance of information in the consumer decision-making process. It also emphasizes theimportance of consumer attitudes although it fails to consider attitudes inrelation to repeat purchase behavior.

 2.2.1NICOSIA MODEL This model focuses on the relationship between the firm and its potentialconsumers. The firm communicates with consumers through its marketing messages (advertising), and the consumers react to thesemessages by purchasing response. Looking to the model we will findthat the firm and the consumer are connected with each other, the firmtries to influence the consumer and the consumer is influencing the firmby his decision

 second model, which concentrates on the buying decision for a newproduct, was proposed by Nicosia (1976). This model is shown in Figure 2.2.The model concentrates on the firm's attempts to communicate with theconsumer, and the consumers' predisposition to act in a certain way. Thesetwo features are referred to as Field One. The second stage involves theconsumer in a search evaluation process, which is influenced by attitudes.This stage is referred to as Field Two. The actual purchase process isreferred to as Field Three, and the post-purchase feedback process isreferred to as Field Four. This model was criticized by commentators becauseit was not empirically tested (Zaltman, Pinson and Angelman, 1973), andbecause of the fact that many of the variables were not defined (Lunn, 1974).

 Perhaps, the most frequently quoted of all consumer behavior models is theHoward-Sheth model of buyer behavior, which was developed in 1969. Thismodel is shown in Figure 2.3. The model is important because it highlightsthe importance of inputs to the consumer buying process and suggests waysin which the consumer orders these inputs before making a final decision.The Howard-Sheth model is not perfect as it does not explain all buyer behavior. It is however, a comprehensive theory of buyer behavior that hasbeen developed as a result of empirical research (Horton, 1984).Schiffman and Kanuk (1997) mentioned that many early theoriesconcerning consumer behavior were based on economic theory, on thenotion that individuals act rationally to maximize their benefits(satisfactions) in the purchase of goods and services. A consumer isgenerally thought of as a person who identifies a need or desire, makes

 a purchase, and then disposes of the product during the three stages inthe consumption process in Figure2.2 (Solomon, 1996

 The consumer attitude based on the firms messages. The first field is divided into two subfields.The first subfield deals with the firms marketing environment andcommunication efforts that affect consumer attitudes, the competitiveenvironment, and characteristics of target market. Subfield two specifiesthe consumer characteristics e.g., experience, personality, and how heperceives the promotional idea toward the product in this stage theconsumer forms his attitude toward the firms product based on hisinterpretation of the message

 Field 2: search and evaluation The consumer will start to search for other firms brand and evaluate thefirms brand in comparison with alternate brands. In this case the firmmotivates the consumer to purchase its brands.

 Field 3: T he act of t he purchase The result of motivation will arise by convincing the consumer topurchase the firm products from a specific retailer. Field 4: Feed back This model analyses the feedback of both the firm and the consumer after purchasing the product. The firm will benefit from its sales data asa feedback, and the consumer will use his experience with the productaffects the individuals attitude and predispositions concerning futuremessages from the firm.

 buyer behaviour - stimulus-response model Introduction A well-developed and tested model of buyer behaviour is known as the stimulus-response model, which is summarised in the diagram below:

 In the above model, marketing and other stimuli enter the customers black box and produce certain responses. Marketing management must try to work out what goes on the in the mind of the customer the black box. The Buyers characteristics influence how he or she perceives the stimuli; the decision-making process determines what buying behaviour is undertaken.

 Characteristics that affect customer behaviour The first stage of understanding buyer behaviour is to focus on the factors that determine he buyer characteristics in the black box. These can be summarised as follows:

 2.2.2HOWARD-SHETH MODEL This model suggests three levels of decision making:1. The first level describes the extensive problem solving. At this levelthe consumer does not have any basic information or knowledge aboutthe brand and he does not have any preferences for any product. In thissituation, the consumer will seek information about all the differentbrands in the market before purchasing.

 2. The second level is limited problem solving. This situation exists for consumers who have little knowledge about the market, or partialknowledge about what they want to purchase. In order to arrive at abrand preference some comparative brand information is sought.3. The third level is a habitual response behavior. In this level theconsumer knows very well about the different brands and he candifferentiate between the different characteristics of each product, andhe already decides to purchase a particular product.

 The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses.[2] It can be distinguished between interpersonal stimuli (between people) or intrapersonal stimuli (within people).[3] The black box model is related to the black box theory of behaviourism, where the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer. The marketing stimuli are planned and processed by the companies, whereas the environmental stimulus are given by social factors, based on the economical, political and cultural circumstances of a society. The buyers black box contains the buyer characteristics and the decision process, which determines the buyers response. The black box model considers the buyers response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized the problem. However, in reality many decisions are not made in awareness of a determined problem by the consumer.

 Marketing of goods and services to

commercial enterprises, governments, and other profit and not-for-profit organizations

for use in the creation of goods and services that they market to other businesses, individuals and ultimate consumers. More than half of all U.S. business school graduates take jobs in firms that engage in business marketing. Organizational Buyers Manufacturers Wholesalers Retailers Government agencies Buy goods and services for their own use or for resale.

 CHARACTERISTICS OF ORGANIZATIONAL BUYING

Major Influences on Organizational Buying Behaviour

 Environmental Factors: These factors include economical, political, technical, legal or regulatory, technological, infrastructural and cultural factors. Environmental factors interact with each other to produce information, values, norms and general business conditions.

 Factor that affect the Industrial Buying Behavior a. Environmental Factor Level of demand Economic outlook Interest rate Rate of technological change Political and regulatory developments Competitive developments Social responsibility concerns

 b. Organization Factor Objectives Policies Procedures Organizational structures Systems c. Interpersonal Factor Interests Authority Status Empathy Persuasiveness

 d. Individual factor Age Income Education Job position Personality Risk attitudes Culture

 Online buyer behaviour Understanding that online marketing is just as important as offline is important. But understanding why these search marketing techniques are important is vital. Search engines have had a profound effect on marketing techniques - customers have greater freedom to research and compare products than ever before, and with the minimum of effort. Shopping online is so easy; users can bookmark pages, compare prices and shop around before buying

 Customer Relationship Management is an upright concept or strategy to solidify relations with customers and at the same time reducing cost and enhancing productivity and profitability in business. An ideal CRM system is a centralized collection all data sources under an organization and provides an atomistic real time vision of customer information. A CRM system is vast and significant, but it be can implemented for small business, as well as large enterprises also as the main goal is to assist the customers efficiently.

 CRM, or Customer Relationship Management, is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty. True CRM brings together information from all data sources within an organization (and where appropriate, from outside the organization) to give one, holistic view of each customer in real time. This allows customer facing employees in such areas as sales, customer support, and marketing to make quick yet informed decisions on everything from crossselling and upselling opportunities to target marketing strategies to competitive positioning tactics

 Once thought of as a type of software, CRM has evolved into a customer-centric philosophy that must permeate an entire organization. There are three key elements to a successful CRM initiative: people, process, and technology. The people throughout a company-from the CEO to each and every customer service rep-need to buy in to and support CRM. A company's business processes must be reengineered to bolster its CRM initiative, often from the view of, How can this process better serve the customer? Firms must select the right technology to drive these improved processes, provide the best data to the employees, and be easy enough to operate that users won't balk. If one of these three foundations is not sound, the entire CRM structure will crumble