MKTG101 Marketing Fundamentals
Week 5 Consumer and Organisational Buyer Behaviour
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What is a Consumer?
Consumer: customers who buys or acquires goods and services for their own, personal consumption. Business-to-business: customers who purchase products for resale in some form or for the satisfaction of needs other than their own
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Model of consumer buyer behaviour Marketing
and other stimuli
Customer processes
Customer response
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A Model of Buyer Behaviour
politics
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Factors influencing customers
Psychological •Motivation •Perception •Learning (memory) •Beliefs & attitudes •Personality & self-concept
Personal •Age & lifecycle stage •Occupation •Education •Economic situation
Social •Household type •Reference groups •Roles & status
Marketing programs •Marketing objectives •Marketing strategy •Marketing mix
Buyers’ responses •Product service & category selection BUYER DECISION •Brand selection PROCESS Experiences •Reseller selection •Purchase timing & Lifestyle repurchase intervals •Purchase amount
Cultural •Culture •Subculture •Social Class
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Consumer
Environmental influences •Economic •Technological •Political
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Psychological factors
Psychology: The science of the mind or of mental states and processes - the biomass called the brain has between 20 –30 trillion connections that never sleep, so the mind is indeed a very busy place.
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Your major psychological factors
Changing levels of Motivation
Perception processes How effectively you Learn & Memorise Your major Beliefs and Attitudes
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Psychological influences
Sigmund Freud: teaches that people are
largely unconscious about the real psychological forces shaping their behaviour. Events and experiences are stored in our memory and influence our behaviour. Some memories (especially unpleasant or threatening ones) are repressed (we are unconscious of them) but still influence us.
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Motivation
Motivation: the force that changes thought into action – nothing happens until you decide • When consumers express interest in buying a product, we ask.
– Why? – What is the person really seeking? – What needs is he or she trying to satisfy?
• A person has many needs at any given time.
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Motivation Theories
Abraham Maslow: sought to explain why people are
driven by particular needs at particular times.
– Maslow's answer is that human needs are arranged in a hierarchy, from the most pressing to the least pressing
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Maslow’s Hierarchy of Needs
Self
Actualization
Self-Esteem
Belongingness
Safety
Physiological
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Perception
Perception: describes the process of giving meaning to the stimuli we experience.
– A motivated person is ready to act. How the person acts is influenced by his or her perception of the situation.
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Perceptual Selectivity
All Stimuli
Exposure
Attention
Interpretation
Retention
Discarded
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Learning and Memory
Learning and memory refer to three processes:
– Encoding experiences, knowledge, facts etc – Storing the encoded material – Retrieving the material – Marketers need to understand how material enters the memory and how to ensure that it is retrieved at the appropriate time to influence the customer’s behaviour
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Beliefs and attitudes
Certainty of outcome Evaluation of outcome Attitude towards behaviour
Intention
Evaluation by referents
Motivation to comply Subjective norm
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Behaviour
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Personality and Self Concept
Personality: the combination of (usually) psychological characteristics that describe an individual and how they react in specified situations.
– Aggressive, sociable, confident
Self concept: how the individual sees themselves and may not relate to personality as clinically determined. Many individuals strive for behaviour that is consistent with their self concept
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Personal Factors
Demographic:
– – – – Age and lifecycle stage Occupation Education Economic situation
Psychographic:
– Lifestyle
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Cultural Factors
Culture: our learned responses to recurring situations.
– Includes language, values, roles, diet, norms of behaviour, etc
Culture is multi-layered:
– culture – subculture – social class
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Social Factors
Social factors: the influences that interactions with other people have on our behaviour.
– Household type – Reference groups – Roles – Social status
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Social Factors
Group Influence on Brand Choice
Group Influence on Product Choice
Strong
Weak
Strong
Public Luxuries
Private Luxuries
Weak
Public Necessities
Private Necessities
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Family and Lifestyle Influences
Family Influences
Age and Life Cycle Stage
Occupation
Economic Situation
Lifestyle Identification
Activities Interests
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Opinions
VALS 2
Abundant Resources Actualizers
Principle Oriented Status
Fulfilleds Achievers
Oriented Action Oriented
Experiencers
Believers
Strivers
Makers
Strugglers
Minimal Resources
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Customer’s state of mind
Awareness Interest Desire Action
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Strong, 1925
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The Buyer Decision Process
Need Recognition
Information Search
Evaluation of Alternatives Purchase Decision
Post-purchase Behaviour
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Stages in the Adoption Process
Awareness Interest Evaluation Trial
Adoption
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Adoption of Innovations
Frequency of Adoption
Early Majority
Late Majority
Innovators
Early Adopters
13.5%
34%
34%
Laggards
16%
2.5%
Early
Time of Adoption
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Late
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Business-to-Business Markets
Business-to-business: customers who purchase products for resale in some form or for the satisfaction of needs other than their own. B2B markets feature
– Very large in value terms – Complex products – Complex business structures
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B2B Buying
Institutional buying: buying products on behalf of an organization to be consumed in the course of the organization’s business Buying for resale: buying of products to be resold unchanged as part of the organization’s business Industrial buying: buying of raw materials and other inputs to be substantially changed in the course of the organization’s business
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Characteristics of Business Markets
Market Structure and Demand
Other Characteristics
Characteristics of Business Markets
Nature of Buying Unit
Types of Decisions and Decision Process
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Characteristics of Business Markets
Market Structure and Demand • • • • • • • Fewer buyers Larger Buyers Close supplier-customer relationships Geographically concentrated buyers Derived demand Price inelastic demand Fluctuating demand
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Characteristics of Business Markets
Nature of buying unit • Professional purchasing • Several buying influences
Types of Decisions and Decision Processes • More complex and formalised decisions • Direct purchasing • Reciprocity • Lease
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Model of business buyer behaviour
Marketing and other stimuli
Customer processes
Customer response
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A Model of Business Buying Behaviour
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Major Types of Business Buying Situations
Straight Rebuy Modified Rebuy
Types of Business Buying Situations
New Task Buying MKTG101 2006 Week 5
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Participants in the Buying Process
Gatekeepers Users
Buying Centre Deciders Influencers
Buyers
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Participants in the Buying Process
Users: members of the organisation who will use the product or service.
Influencers: affect the buying decision. They are often outside the organisation, help to define specifications and provide information for evaluating alternatives.
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Participants in the Buying Process
Buyers: have formal authority to select the supplier and arrange terms of purchase. Deciders have formal or informal power to determine whether the transaction takes place. Gatekeepers control the flow of information to other participants.
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Major influences on B2B Buying
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Comparison of business & consumer buying situations
BUYING STEP
1 Need or problem recognition 2 General need description 3 Product specification
INDUSTRIAL Anticipates Extensive Precise / technical
Extensive Formal Extensive
CONSUMER Reacts Limited Benefits
Limited Verbal Limited analysis
4 Information / supplier search 5 Proposal solicitation
6 Supplier selection 7 Order-routine specification 8 Post-purchase performance review
Calculated re-order Extensive comparisons
comparison and benchmarking
Not routinised Little
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Stages in the Business Buying Process
Problem Recognition General Need Description Product Specification
Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification
Performance Review
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Institutional and Government Institutional Markets Markets
Low Budgets Captive Patrons
Government Markets
Centralized Buying Public Review
Outside Publics
Submit Bids
Non-economic Criteria
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Ethical issues
• Invasion of privacy
• Deception • Manipulation • Exploitation
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