BUYER BEHAVIOR ADVANCED DIPLOMA IN BUSINESS MANAGEMENT July

BUYER BEHAVIOR ADVANCED DIPLOMA IN BUSINESS MANAGEMENT July 2017

Consumer Markets and Buyer Behavior Learning Objective 1 Define the consumer market and construct a simple model of consumer buyer behavior. Model of Consumer Behavior Copyright © 2016 Pearson Education, Inc. 5 -2

Consumer Markets and Buyer Behavior Consumer buyer behavior is the buying behavior of final consumers —individuals and households that buy goods and services for personal consumption. Consumer markets are made up of all the individuals and households that buy or acquire goods and services for personal consumption. Copyright © 2016 Pearson Education, Inc. 5 -6

Model of Consumer Behavior Figure 5. 1 The Model of Buyer Behavior Copyright ©

What are the Buyer Behavior?

Consumer Markets and Buyer Behavior Learning Objective 2 Name the four major factors that influence consumer buyer behavior. Characteristics Affecting Consumer Behavior Copyright © 2016 Pearson Education, Inc. 5 -6

Characteristics Affecting Consumer Behavior Cultural Factors Influencing Consumer Behavior Copyright © 2016 Pearson Education,

Characteristics Affecting Consumer Behavior Culture is the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. Copyright © 2016 Pearson Education, Inc. 5 -11

Characteristics Affecting Consumer Behavior Subcultures are groups of people within a culture with shared value systems based on common life experiences and situations. Copyright © 2016 Pearson Education, Inc. 5 -12

Example: Breakfast

Characteristics Affecting Consumer Behavior Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Measured as a combination of occupation, income, education, wealth, and other variables Copyright © 2016 Pearson Education, Inc. 5 -13

Characteristics Affecting Consumer Behavior Common Social Classes • • Upper Class Middle Class Working

Characteristics Affecting Consumer Behavior Social Factors Groups and Social Networks Membership Groups Aspirational Groups • Groups with direct influence and to which a person belongs • Groups an individual wishes to belong to Reference Groups • Groups that form a comparison or reference in forming attitudes or behavior Copyright © 2016 Pearson Education, Inc. 5 -15

Characteristics Affecting Consumer Behavior Groups and Social Networks Online social networks Buzz marketing Social media sites Virtual worlds Word of mouth Opinion leaders Copyright © 2016 Pearson Education, Inc. 5 -16

Characteristics Affecting Consumer Behavior Social Factors Family is the most important consumer-buying organization in society. Role and status can be defined by a person’s position in a group. Copyright © 2016 Pearson Education, Inc. 5 -17

Example:

Characteristics Affecting Consumer Behavior Personal Factors Age and life-cycle stage PRIZM Lifestage Groups system

Characteristics Affecting Consumer Behavior Personal Factors Occupation affects the goods and services bought by consumers. Economic situations include trends in: Spending Personal income Savings Copyright © 2016 Pearson Education, Inc. Interest rates 5 -19

Characteristics Affecting Consumer Behavior Personal Factors Lifestyle is a person’s pattern of living as

Characteristics Affecting Consumer Behavior Personal Factors Personality refers to the unique psychological characteristics that distinguish a person or group. Copyright © 2016 Pearson Education, Inc. 5 -21

Characteristics Affecting Consumer Behavior Psychological Factors Motivation Perception Learning Beliefs and attitudes Copyright ©

Characteristics Affecting Consumer Behavior Psychological Factors A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction of the need. Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations. Copyright © 2016 Pearson Education, Inc. 5 -24

Characteristics Affecting Consumer Behavior Psychological Factors Figure 5. 4 - Maslow’s Hierarchy of Needs

Characteristics Affecting Consumer Behavior Psychological Factors Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. Perceptual Processes Selective attention Selective distortion Selective retention Copyright © 2016 Pearson Education, Inc. 5 -26

Characteristics Affecting Consumer Behavior Psychological Factors Selective attention is the tendency for people to screen out most of the information to which they are exposed. Selective distortion is the tendency for people to interpret information in a way that will support what they already believe. Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands. Copyright © 2016 Pearson Education, Inc. 5 -27

Characteristics Affecting Consumer Behavior Psychological Factors Learning is the change in an individual’s behavior arising from experience and occurs through the interplay of: Drives Stimuli Reinforcement Cues Responses Copyright © 2016 Pearson Education, Inc. 5 -28

Characteristics Affecting Consumer Behavior Psychological Factors A belief is a descriptive thought that a person has about something based on: � knowledge � opinion � faith An attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. Copyright © 2016 Pearson Education, Inc. 5 -29

Business Markets and Business Buyer Behavior Learning Objectives Objective 1: Define the business market and explain how business markets differ from consumer markets. Objective 2: Identify the major factors that influence business buyer behavior. Copyright © 2016 Pearson Education, Inc. 6 -38

Business Markets and Business Buyer Behavior Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. The 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. Copyright © 2016 Pearson Education, Inc. 6 -39

Business Markets and Business Buyer Behavior Learning Objective 1 Define the business market and explain how business markets differ from consumer markets. Business Markets Copyright © 2016 Pearson Education, Inc. 6 -40

Business Market Structure and Demand Fewer but larger buyers Derived demand Inelastic demand Fluctuating

Business Markets Nature of the Buying Unit Business buyers usually face more complex buying decisions than do consumer buyers. Compared with consumer purchases, a business purchase usually involves: More decision participants More professional purchasing effort More buyer and seller interaction Copyright © 2016 Pearson Education, Inc. 6 -42

Business Markets Decision Process Supplier development is the systematic development of networks of supplierpartners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others. Copyright © 2016 Pearson Education, Inc. 6 -43

Business Markets and Business Buyer Behavior Learning Objective 2 Identify the major factors that influence business buyer behavior. Business Buyer Behavior Copyright © 2016 Pearson Education, Inc. 6 -44

Business Buyer Behavior Major Types of Buying Situations FIGURE | 6. 1 Copyright ©

Business Buyer Behavior Major Types of Buying Situations Straight rebuy is a buying situation in which the buyer routinely reorders something without any modifications. Modified rebuy is a buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers. New task is a buying situation in which the buyer purchases a product or service for the first time. Copyright © 2016 Pearson Education, Inc. 6 -46

Business Buyer Behavior Major Types of Buying Situations Systems selling is buying a complete

Business Buyer Behavior Participants in the Business Buying Process Buying center consists of all the individuals and units that play a role in the business purchase decision-making process. Users Influencers Deciders Purchasers Gatekeepers Copyright © 2016 Pearson Education, Inc. 6 -48

Business Buyer Behavior Participants in the Business Buying Process 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. Copyright © 2016 Pearson Education, Inc. 6 -49

Business Buyer Behavior Participants in the Business Buying Process The buying center concept presents a major marketing challenge given the varied groups involved in the decision. Who participates in the decision? � Relative influence on decision by various participants � Evaluation criteria used by various participants � Are there Informal participants involved in decision Copyright © 2016 Pearson Education, Inc. 6 -50

Business Buyer Behavior Major Influences on Business Buyers FIGURE | 6. 2 Major Influences

Business Buyer Behavior Major Influences on Business Buyers Economic Factors Personal Factors Price Emotion

Business Buyer Behavior Major Influences on Business Buyers Environmental Factors Demand for product Economic outlook Cost of money Supply of Materials Technology Culture Politics Competition Copyright © 2016 Pearson Education, Inc. 6 -53