Principlesofmarketing.com Chapter Four – Customer Buying Behavior

Consumer Decision-Making page one a. Problem recognition – the consumer recognizes a problem. For example, her car has had major mechanical problems for the last two months. b. Information search – internal and external. The consumer thinks about options she may have to remedy her situation (internal search). And then she seeks external sources of information such as friends, newspapers, TV, and the internet. c. Alternative identification and evaluation – she has some ideas about what alternatives she has and how to approach them. She now must compare and contrast the options she has.

Consumer Decision-Making page one d. Choice and purchase – based on this process of consideration the consumer now purchases the most attractive option she has identified. e. Post purchase evaluation – the consumer experiences her choice and determines if she is happy with it. f. Feedback learning for future consumption behavior – the consumer remembers how she feels about her purchase and makes note of it for future reference (internal search and attitude formation).

Involvement in the purchase process Involvement can be defined as the personal importance and social significance of the purchase For example, Jim buys a suit for his first job interview For example, Marty buys a pair of jeans at Goodwill to wear while painting her bedroom

situational effects on purchasing all of the circumstances surrounding our purchases that may strongly impact our decision-making process think about the relationship between involvement and situational effects

Reference Groups reference groups are collections of other people who strongly affect what we buy and how we go about buying it – For example, when Sara buys new clothes she always observes others on campus for queues to what is most acceptable in a fashion sense

Different kinds of reference groups Aspirant Reference Groups - groups of which you are not presently a member but would like to be eventually Associative Reference Groups – you may or may not be a member of these groups but you look to these groups for behavioral queues or guidance in consumption and general attitudes Disassociative Reference Groups – groups to which you may or may not belong but with which you do not want to be identified as being a member

Types of reference groups?

Individual/Psychological Variables that Impact Buying Behavior Learning – changes in behavior based on experience Attitude – a liking or disliking for something Perception – way in which we experience our universe Risk – characteristics of stimuli or situations in which we perceive potential danger

Attitudes are important in the study of buyer behavior – the multiattribute attitude model (MAM) A = ∑E i *I i Where:A = an attitude toward a product, service, or idea E = evaluation of attribute ‘i’ I = importance of attribute ‘i’ A brief example is offered in your e-book to explain this approach. You should complete the example.

Types of Risk a. Physiological risk - associated with threats to one’s health b. Financial risk – risk associated with the loss of economic wealth or financial security c. Psychological risk – threats associated with some psychological construct, for example, a threat to one’s self-esteem d. Social risk – a threat to one’s social standing or social comfort

Organizational Buying Behavior When compared to consumer buying behavior how do you think organizational buying behavior differs?

Organizational buying differs from Consumer buying in that it: Usually entails larger volumes More negotiation Closer relationships with customers (CRM – customer relationship management) Often more complex

Roles in the buying center a) initiator – this person first recognizes the need for the product or service and may or may not have a say in the purchase decision. b) user – this person will be responsible for operating the product that is bought or consuming the service that is purchased. Again, this person may or may not have a say in what is purchased. c) influencer – this person’s role may be only tangential to product use, but s/he will still have an impact on the purchase decision. d) buyer – this person is responsible for obtaining the product, though s/he may or may not have any impact on what is purchased. e) decider – this person is responsible for the final determination of what will be purchased.

In-class exercises: Chapter Four, page one Group One – develop a clear example to demonstrate the steps in consumer decision-making process Group Two – develop examples of a high-involvement purchase and a low-involvement purchase Group Three – develop an example of consumer buying behavior that is impacted strongly by situational effects Group Four – develop an example of the different reference groups we discussed in chapter four

In-class exercises: Chapter Four, page two Group Five – develop an example that demonstrates each of the four different types of risk discussed in chapter four Group Six – develop an example of each of the three following constructs in consumer decision-making: learning, attitude, and perception, Group Seven – define the term ‘buying center’ and develop an example to demonstrate each role in the buying center Group Eight – discuss the MAM and develop an example to demonstrate its application