Consumer Behavior

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Consumer Behavior Powered By Docstoc
					Consumer & Business
Buyer Behavior

   Process by which an individual selects,
    organizes, and interprets information
    to form a cohesive picture about an
   Perceptions affect consumer behavior
       However, remember that individuals can
        perceive the same entity in different ways
   Selective Attention: Receive some messages and
    screen out the rest
       An average person is exposed to 1500 ads or brand
        messages a day
       Most of these are screened out; So, how do marketers
        capture mind space?
           People are more likely to notice stimuli that relate to current
           People are more likely to notice stimuli they anticipate
           People are more likely to notice stimuli that deviate relatively
            larger than others
       Marketers must bypass attention filters; provide
        unexpected stimuli (salesperson, sudden offers)

   Selective Distortion: Tendency to
    interpret/distort information to be consistent
    with prior brand and product beliefs
       Taste tests: “Blind” taste tests showed equal
        split; “Open” tests showed preferences
       Can work to the advantage of marketers of
        strong brands
           A car may seem to drive smoother
           A beer may taste better
   Selective Retention: Though people fail to
    register much information, they retain
    information that supports their attitudes and
       Remember good points about products we like
        and forget good points about competing
       Works to the advantage of strong brands
       Explains why marketers repeat messages – for
 Consumer Buying Decision Process

Marketers Must Identify and Understand:

     Who Makes the Buying Decision

        Types of Buying Decisions

       Stages in the Buying Process
    Consumer Buying Decision Process

      Understand         Initiator
                         Influencer
   Buying roles         Decider
   Buying behavior      Buyer
   Buying decision      User
     Consumer Buying Decision Process

      Understand         Complex buying
                         Dissonance-reducing
   Buying roles          buying behavior
   Buying behavior      Habitual buying behavior
   Buying decision      Variety-seeking buying
    Consumer Buying Decision Process

      Understand         Five stages in the
                          consumer buying
   Buying roles          process
   Buying behavior      The amount of time
   Buying decision       spent in each stage
    process               varies according to
                          several factors
Consumer Buying Decision Process

Five-Stage Model of the Consumer Buying Process
    Need Recognition
   Need/Problem Recognition
       Can be triggered by internal or external
       Needs become wants, which lead to
   Marketing stimuli can stimulate a desire
    for information
    Information Search (1 of 2)
   Sources of information:
      Internal Sources
     Personal Sources

     External Sources

   Time, effort and expense dedicated to information
    search depends on:
       Degree of risk involved in the purchase
       Amount of expertise with the product category
       Actual cost of the search
   Evoked set:
       A narrowed down set of alternatives that the customer is
  Consumer Buying Decision Process

Successive Sets Involved in Consumer Decision Making
             Evaluation of Alternatives

   Customers evaluate products as bundles of
       Brand attributes
       Product features
       Aesthetic attributes
       Price
   Customers place different levels of importance on
   Important considerations in the evaluation stage:
       Products must be in the evoked set
       Consumers’ choice criteria must be understood
       Marketing programs must be designed to influence
        consumers’ opinions about product or brand image
          Purchase Decision
   Purchase intention and the act of buying are
    distinct concepts

   Potential intervening factors between intention and
    buying (car example):
       Unforeseen circumstances
       Angered by the salesperson or sales manager
       Unable to obtain financing
       Customer changes mind

   Key issues in the purchase decision stage:
       Product availability
       Possession utility
        Postpurchase Evaluation
   Four possible outcomes in the postpurchase
       (1) Delight
       (2) Satisfaction
       (3) Dissatisfaction
       (4) Cognitive Dissonance

   Firm’s ability to manage dissatisfaction and
    cognitive dissonance is:
       A key to creating customer satisfaction
       A major influence on word-of-mouth communication
Business Markets and
Organizational Buying
Compared to Consumer Markets,
   Business Markets Have:
          Fewer buyers

          Larger buyers
       concentrated buyers
     Closer relationships with
       The Business Buying Process

   Problem/Need Recognition
   Develop Product Specifications
   Vendor Identification and Qualification
   Solicitation of Proposals or Bids
   Vendor Selection
   Order Processing
   Vendor Performance Review
        Understanding Business Buying

   Unique Characteristics of Business Markets
       The Buying Center
       Hard and Soft Costs
       Reciprocity
       Mutual Dependence
   Four types of Business Markets:
       Producer markets (a.k.a. commercial markets)
       Reseller markets
       Government markets
       Institutional markets
    Organizational Buying

    Buying Situations      Routine reorders from
                            approved vendor list
   Straight rebuy         Low involvement,
                            minimal time
   Modified rebuy          commitment
   New task               Example: copier paper
    Organizational Buying

    Buying Situations      Specifications, prices,
                            delivery terms or other
                            aspects require
   Straight rebuy          modification
   Modified rebuy         Moderate level of
                            involvement and time
   New task                commitment
                           Example: desktop
    Organizational Buying

    Buying Situations      Purchasing a product or
                            service for the first time
                           High level of
   Straight rebuy          involvement and time
   Modified rebuy          commitment; multiple
   New task               Example: selecting a
                            web site design firm or
Participants in Business Buying

Roles Played in a Buying Center

Initiators                       Approvers

       Users                  Deciders

         Influencers    Buyers


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