1. Consumer Markets and Consumer Buying Behavior
Chapter 5
Consumer Markets and Consumer Buying Behavior

2. Consumer Buying Behavior
Consumer Buying Behavior refers to the buying behavior of final consumers -individuals & households who buy goods and services for personal consumption.
All these consumers make up the consumer market.
The central question for marketers is:
“How do consumers respond to various marketing efforts the company might use?”

3. Model of Buyer Behavior (Fig. 5.1)
Marketing and
Other Stimuli
Marketing
Product
Price
Place
Promotion
Other
Economic
Technological
Political
Cultural
Buyer’s Black Box
Buyer Characteristics
Buyer Decision Process
Buyer Responses
Product Choice
Brand Choice
Dealer Choice
Purchase Timing
Purchase Amount

4. Understanding Consumer Behavior
Characteristics of consumers
what needs (solutions) they seek?
personal and interpersonal characteristics affecting consumer behavior
The Buying Process
Who makes the decision?
Decision-Making Process
Buying Context (Impulse vs Planned)

5. Factors Influencing Consumer Behavior (Fig. 5.2)
Culture
Sub-
culture
Social
class
Cultural
Social
Reference
groups
Family
Roles
and
status
Personal
Age and
life-cycle
Occupation
Economic
situation
Lifestyle
Personality
and
self-concept
Psycho-
logical
Motivation
Perception
Learning
Beliefs and
attitudes
Buyer

6. Factors Affecting Consumer Behavior: Culture
Culture is the Most Basic Cause of a Person's Wants and Behavior.
Subculture
Group of people with shared value systems based on common life experiences.
Hispanic Consumers
African American Consumers
Asian American Consumers
Mature Consumers

7. Factors Affecting Consumer Behavior: Culture
Culture is the Set of Values, Perceptions, Wants & Behavior Learned by a Member of Society from Family.
Social Class
Society’s relatively permanent & ordered divisions whose members share similar values, interests, and behaviors.
Measured by: Occupation, Income, Education, Wealth and Other Variables.

8. Factors Affecting Consumer Behavior: Social
Groups
Membership
Reference
Groups and reference groups: serve as a point of reference in forming a person’s attitudes and behaviors.
Roles and status: activities that a person is expected to perform according to the persons around him or her, and the esteem (status) given to the roles by society.
Family (most important)
Husband, wife, kids
Influencer, buyer, user
Social Factors
Roles and Status

9. Factors Affecting Consumer Behavior: Personal
Personal Influences
Age and Life
Cycle Stage
Occupation
Personality &
Self-Concept
Economic
Situation
Activities
Interests
Lifestyle Identification
Opinions
Factors Affecting Consumer Behavior: Personal

10. Factors Affecting Consumer Behavior: Psychological
Baloglu, S (1998). An Empirical Investigation of Attitude Theory for Tourist Destinations. Journal of Hospitality & Tourism Research, 22(3),
Motivation
Psychological
Factors Affecting
Buyers
Choices
Beliefs and
Attitudes
Perception
Learning

11. Maslow’s Hierarchy of Needs (Fig. 5.4)
Self
Actualization
(Self-development)
Esteem Needs (self-esteem)
Social Needs (sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)

12. - Perception is selective. - Perception is reality

13. Types of Buying Decision Behavior (Fig. 5.5)
High
Involvement
Significant
differences
between
brands
Few
Low
Complex
Buying
Behavior
Variety-
Seeking
Behavior
Dissonance-
Reducing Buying
Behavior
Habitual
Buying
Behavior

14. Buyer Decision Process (Fig. 5.6)
Purchase
Decision
Evaluation
of Alternatives
Postpurchase
Behavior
Information
Search
Need Recognition

15. Buyer Decision Process Step 1. Need Recognition
Buyer Recognizes a Problem or a Need.
Needs Arising From:
Internal Stimuli –
Hunger
External Stimuli-
Friends
State Where the Buyer’s Needs are Fulfilled and the Buyer is Satisfied.

16. The Buyer Decision Process Step 2. Information Search
Personal Sources
The Buyer Decision Process Step 2. Information Search
Commercial Sources
Public Sources
Family, friends, neighbors
Most effective source of
information
Advertising, salespeople
Receives most information from
these sources
Experiential Sources
Mass Media
Consumer-rating groups
Handling the product
Examining the product
Using the product

17. The Buyer Decision Process Step 4. Evaluation of Alternatives
Consumer May Use Careful
Calculations & Logical Thinking
Consumers May Buy on Impulse and
Rely on Intuition
Consumers May Make Buying Decisions
on Their Own.
Consumers May Make Buying Decisions
Only After Consulting Others.
Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives

18. Alternative Evaluation
Value
Convenient Location
Fast Service
Menu Variety
Food Quality
Employee Attitude
Atmosphere

19. The Buyer Decision Process Step 5. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand
Attitudes of Others
Unexpected Situational Factors
Purchase Decision

20. The Buyer Decision Process Step 6. Postpurchase Behavior
Cognitive Dissonance
Satisfied Customer!
Consumer’s
Expectations of Product’s Performance.
Product’s Perceived
Performance.
Dissatisfied Customer

21. Discussion Connections
Form small groups to discuss a specific major purchase that one of you has made recently.
What type of buying decision was it?
Discuss the Buyer Decision Process and what major factors influenced your decisions.

22. Stages in the Adoption Process
Awareness: Consumer is aware of
product, but lacks information.
Interest: Consumer seeks
Information about new product.
Evaluation: Consumer considers
trying new product.
Trial: Consumer tries new
product on a small scale.
Adoption: Consumer decides to make regular use of product.

23. Adopter Categories (Fig. 5.7)
Early Majority
Late Majority
Innovators
Early
Adopters
Percentage of Adopters
Laggards
34%
34%
13.5%
16%
2.5%
Time of Adoption
Early
Late

24. Influence of Product Characteristics on Rate of Adoption
Communicability
Can results be easily
observed or described
to others?
Relative Advantage
Is the innovation
superior to existing
products?
Divisibility
Can the innovation
be used on a
trial basis?
Compatibility
Does the innovation
fit the values and
experience of the
target market?
Complexity
Is the innovation
difficult to
understand or use?

25. Review of Concept Connections
Define the consumer market and construct a simple model of consumer buyer behavior.
Name the four major factors that influence consumer buyer behavior.
List and understand the stages in the buyer decision process.
Describe the adoption and diffusion process for new products.

26. Business Markets and Business Buyer Behavior
Chapter 6
Business Markets and Business Buyer Behavior

27. What is a Business Market?
A business market comprises all 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 market is huge and involves many more dollars and goods than do consumer markets.

28. Characteristics of Business Markets
Contain fewer, but
larger buyers
Characteristics of Business Markets
Customers are more
geographically concentrated
Buyer demand is derived from
final consumer demand
Marketing Structure and Demand
Demand is often more inelastic
Demand often fluctuates more, and more quickly

29. Characteristics of Business Markets
Nature of the Buying Unit
Business purchases involve more buyers.
Business buying involves a more professional purchasing effort.

30. Characteristics of Business Markets
Types of Decisions and the Decision Process
Business buyers usually face more complex buying decisions.
Business buying process is more formalized.
In business buying, buyers and sellers work more closely together.
Build Long-Term Partnerships

31. Model of Business Buyer Behavior (Fig. 6.1)
Buyer Responses
Product or
service choice
Supplier Choice
Order Quantities
Delivery terms
and times
Service terms
Payment
The Environment
Marketing
Stimuli:
Product
Price
Place
Promotion
Other Stimuli:
Economic
Technological
Political
Cultural
Competitive
The Buying
Organization
The buying
center
Buying decision
process
(Interpersonal and
individual influences)
(Organizational
Influences)

32. Discussion Connections
Although business markets are similar in many ways to consumer markets, there are also significant differences.
What similarities and differences might Bilkent Hotel encounter in selling to the business market versus the consumer market.

33. Major Types of Buying Situations
New Task Buying
Involved Decision Making
Modified Rebuy
Straight Rebuy

34. Participants in the Business Buying Process
Factors
Situational
Unexpected
Users
Ethical
Influencers
Decision-Making Unit of a Buying Organization is Called Its Buying Center.
Roles Include
Buyers
Attitudes of
Others
Deciders
Gatekeepers

35. Major Influences on Business Buyer Behavior (Fig. 6.2)
Environmental
Economic
developments
Supply
Conditions
Technological
change
Political and regulatory
Competitive
Developments
Culture and customs
Organizational
Objectives
Policies
Procedures
Structure
Systems
Interpersonal
Authority
Status
Empathy
Persuasiveness
Individual
Age
Education
Job Position
Personality
Risk Attitudes
Buyers

36. The Business Buying Process
Stage 1. Problem Recognition
Stage 2. General Need Description
Stage 3. Product Specification
Stage 4. Supplier Search
The Business Buying Process
Stage 5. Proposal Solicitation
Stage 6. Supplier Selection
Stage 7. Order-Routine Specification
Stage 8. Performance Review

37. Business Buying on the Internet
Business buyers may purchase electronically by:
Electronic data interchange links (EDI)
The Internet
Connecting to customers to:
Share marketing information,
Sell products & services,
Provide customer support, and’
Maintain on-going relationships.

38. Benefits and Problems Created by Buying on the Internet
Shave transaction costs
Reduce time between order and delivery
Create more efficient purchasing systems
Forge more intimate relationships
Level the playing field
Problems:
Cut purchasing jobs
Erode supplier-buyer loyalty
Create potential security disasters

39. Institutional and Government Markets
Low Budgets
Captive Patrons
Institutional Markets
Public Review
Red Tape is
Common
Government Markets
Noneconomic
Criteria
Negotiated
Contracts
Some Buying
Online

40. Review of Concept Connections
Define the business market and explain how business markets differ from consumer markets.
Identify the major factors that influence business buyer behavior.
List and define the steps in the business buying decision process.
Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions.