Presentation on theme: "Consumer Markets and Consumer Buying Behavior"— Presentation transcript:
1 Consumer Markets and Consumer Buying Behavior Chapter 5Consumer 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 andOther StimuliMarketingProductPricePlacePromotionOtherEconomicTechnologicalPoliticalCulturalBuyer’s Black BoxBuyer CharacteristicsBuyer Decision ProcessBuyer ResponsesProduct ChoiceBrand ChoiceDealer ChoicePurchase TimingPurchase Amount
4 Understanding Consumer Behavior Characteristics of consumerswhat needs (solutions) they seek?personal and interpersonal characteristics affecting consumer behaviorThe Buying ProcessWho makes the decision?Decision-Making ProcessBuying Context (Impulse vs Planned)
6 Factors Affecting Consumer Behavior: Culture Culture is the Most Basic Cause of a Person's Wants and Behavior.SubcultureGroup of people with shared value systems based on common life experiences.Hispanic ConsumersAfrican American ConsumersAsian American ConsumersMature 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 ClassSociety’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 GroupsMembershipReferenceGroups 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, kidsInfluencer, buyer, userSocial FactorsRoles and Status
9 Factors Affecting Consumer Behavior: Personal Personal InfluencesAge and LifeCycle StageOccupationPersonality &Self-ConceptEconomicSituationActivitiesInterestsLifestyle IdentificationOpinionsFactors 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),MotivationPsychologicalFactors AffectingBuyersChoicesBeliefs andAttitudesPerceptionLearning
11 Maslow’s Hierarchy of Needs (Fig. 5.4) SelfActualization(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) HighInvolvementSignificantdifferencesbetweenbrandsFewLowComplexBuyingBehaviorVariety-SeekingBehaviorDissonance-Reducing BuyingBehaviorHabitualBuyingBehavior
14 Buyer Decision Process (Fig. 5.6) PurchaseDecisionEvaluationof AlternativesPostpurchaseBehaviorInformationSearchNeed Recognition
15 Buyer Decision Process Step 1. Need Recognition Buyer Recognizes a Problem or a Need.Needs Arising From:Internal Stimuli –HungerExternal Stimuli-FriendsState Where the Buyer’s Needs are Fulfilled and the Buyer is Satisfied.
16 The Buyer Decision Process Step 2. Information Search Personal SourcesThe Buyer Decision Process Step 2. Information SearchCommercial SourcesPublic SourcesFamily, friends, neighborsMost effective source ofinformationAdvertising, salespeopleReceives most information fromthese sourcesExperiential SourcesMass MediaConsumer-rating groupsHandling the productExamining the productUsing the product
17 The Buyer Decision Process Step 4. Evaluation of Alternatives Consumer May Use CarefulCalculations & Logical ThinkingConsumers May Buy on Impulse andRely on IntuitionConsumers May Make Buying Decisionson Their Own.Consumers May Make Buying DecisionsOnly After Consulting Others.Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives
18 Alternative Evaluation ValueConvenient LocationFast ServiceMenu VarietyFood QualityEmployee AttitudeAtmosphere
19 The Buyer Decision Process Step 5. Purchase Decision Purchase IntentionDesire to buy the most preferred brandAttitudes of OthersUnexpected Situational FactorsPurchase Decision
20 The Buyer Decision Process Step 6. Postpurchase Behavior Cognitive DissonanceSatisfied Customer!Consumer’sExpectations of Product’s Performance.Product’s PerceivedPerformance.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 ofproduct, but lacks information.Interest: Consumer seeksInformation about new product.Evaluation: Consumer considerstrying new product.Trial: Consumer tries newproduct on a small scale.Adoption: Consumer decides to make regular use of product.
23 Adopter Categories (Fig. 5.7) Early MajorityLate MajorityInnovatorsEarlyAdoptersPercentage of AdoptersLaggards34%34%13.5%16%2.5%Time of AdoptionEarlyLate
24 Influence of Product Characteristics on Rate of Adoption CommunicabilityCan results be easilyobserved or describedto others?Relative AdvantageIs the innovationsuperior to existingproducts?DivisibilityCan the innovationbe used on atrial basis?CompatibilityDoes the innovationfit the values andexperience of thetarget market?ComplexityIs the innovationdifficult tounderstand 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 6Business 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, butlarger buyersCharacteristics of Business MarketsCustomers are moregeographically concentratedBuyer demand is derived fromfinal consumer demandMarketing Structure and DemandDemand is often more inelasticDemand often fluctuates more, and more quickly
29 Characteristics of Business Markets Nature of the Buying UnitBusiness purchases involve more buyers.Business buying involves a more professional purchasing effort.
30 Characteristics of Business Markets Types of Decisions and the Decision ProcessBusiness 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 ResponsesProduct orservice choiceSupplier ChoiceOrder QuantitiesDelivery termsand timesService termsPaymentThe EnvironmentMarketingStimuli:ProductPricePlacePromotionOther Stimuli:EconomicTechnologicalPoliticalCulturalCompetitiveThe BuyingOrganizationThe buyingcenterBuying decisionprocess(Interpersonal andindividual influences)(OrganizationalInfluences)
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 BuyingInvolved Decision MakingModified RebuyStraight Rebuy
34 Participants in the Business Buying Process FactorsSituationalUnexpectedUsersEthicalInfluencersDecision-Making Unit of a Buying Organization is Called Its Buying Center.Roles IncludeBuyersAttitudesofOthersDecidersGatekeepers
35 Major Influences on Business Buyer Behavior (Fig. 6.2) EnvironmentalEconomicdevelopmentsSupplyConditionsTechnologicalchangePolitical and regulatoryCompetitiveDevelopmentsCulture and customsOrganizationalObjectivesPoliciesProceduresStructureSystemsInterpersonalAuthorityStatusEmpathyPersuasivenessIndividualAgeEducationJob PositionPersonalityRisk AttitudesBuyers
36 The Business Buying Process Stage 1. Problem RecognitionStage 2. General Need DescriptionStage 3. Product SpecificationStage 4. Supplier SearchThe Business Buying ProcessStage 5. Proposal SolicitationStage 6. Supplier SelectionStage 7. Order-Routine SpecificationStage 8. Performance Review
37 Business Buying on the Internet Business buyers may purchase electronically by:Electronic data interchange links (EDI)The InternetConnecting 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 costsReduce time between order and deliveryCreate more efficient purchasing systemsForge more intimate relationshipsLevel the playing fieldProblems:Cut purchasing jobsErode supplier-buyer loyaltyCreate potential security disasters
39 Institutional and Government Markets Low BudgetsCaptive PatronsInstitutional MarketsPublic ReviewRed Tape isCommonGovernment MarketsNoneconomicCriteriaNegotiatedContractsSome BuyingOnline
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.