Marketing An Introduction Consumer and Business Buyer Behaviour

Marketing: An Introduction Looking Ahead • After studying this chapter, you should be able to: • Understand the consumer market and the major factors that influence consumer buyer behaviour • Identify and discuss the stages in the buyer decision process • Describe the adoption and diffusion process for new products • Define the business market and identify the major factors that influence business buyer behaviour • List and define the steps in the business buying decision process 2 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction Understanding the Consumer Market • Consumer market: all of the individuals and households who buy or acquire goods and services for personal consumption. Product Price Place Promotion Marketing and other stimuli Economic Technological Political Cultural 3 Buyer’s Black Box Buyer Characteristics Buying Decision Process ©Copyright 2004, Pearson Education Canada Inc. Buyer’s Responses Product choice Brand choice Dealer choice Purchase timing Purchase amount Figure 6 -1

Marketing: An Introduction Understanding the Consumer Market • Factors influencing consumer behavior: – Cultural • Culture, subculture, and social class – Social factors • Reference groups, family, roles and status – Personal factors • Age and life cycle stage, occupation, economic situation, lifestyle, personality, and self-concept – Psychological factors • Motivation, perception, learning, beliefs, and attitudes 4 ©Copyright 2004, Pearson Education Canada Inc. Figure 6 -2

Marketing: An Introduction The Buyer Decision Process Need recognition Information search Evaluation of alternatives Purchase decision Post-purchase behaviour 5 2004 Pearson Education Canada Inc. Figure 6 -4

Marketing: An Introduction Stages in the Adoption Process • Adoption process: the mental process through which an individual passes from first hearing about an innovation to final adoption • Stages: – Awareness – Interest – Evaluation – Trial – Adoption 6 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction New Product Adoption Rates 2. 5% Innovators 13. 5% 34% Early majority 34% Late majority Early adopters 16% Laggards Time of adoption of innovations Source: reprinted with permission of the Free Press, a Division of Simon & Schuster, from Diffusion of Innovations, Fourth Edition, by E. M. Rugers, 1983. 7 ©Copyright 2004, Pearson Education Canada Inc. Figure 6 -5

Marketing: An Introduction Influences on the Rate of Adoption • Relative advantage – How much better than existing alternatives? • Compatibility – Fit current values and experiences? • Complexity – Ease of understanding? • Divisibility – Can it be tried on a limited basis? • Communicability – Can the innovation be observed and communicated? 8 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction Business Markets • Business market: comprises of all organizations that buy goods and services for use in the production of other products and services or for the purpose of reselling them or renting them to others at a profit. – Market structure • Fewer but larger buyers, more geographically concentrated – Derived demand • Based on purchases by consumers – Nature of the buying unit • More decision participants, more professional effort – The decision process • More complex, formalized, dependent 9 ©Copyright 2004, Pearson Education Canada Inc.

Marketing: An Introduction Influences on Business Buying • Environmental – Level of primary demand, economic outlook, cost of money, supply conditions, rate of technological change, political and regulatory developments, competitive developments • Organizational – Objectives, policies, procedures, organizational structure, and systems • Interpersonal – Authority, status, empathy, and persuasiveness • Individual – Age, education, job position, personality, and risk attitudes 10 ©Copyright 2004, Pearson Education Canada Inc. Figure 6 -7

Marketing: An Introduction The Business Buying Decision Process 11 New task Modified rebuy Straight rebuy Problem recognition Yes Maybe No General need description Yes Maybe No Product specification Yes Yes Supplier search Yes Maybe No Proposal solicitation Yes Maybe No Supplier selection Yes Maybe No Order routine specification Yes Maybe No Performance review Yes Yes 2004 Pearson Education Canada Inc. Figure 6 -8

Marketing: An Introduction Looking Back • The consumer market • Factors influencing consumer behaviour • Stages in the buyer decision process • Adoption and diffusion of new products • The business market • Business buying behaviour • The business buying decision process 12 ©Copyright 2004, Pearson Education Canada Inc.