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Chapter 5 Understanding Consumer and Business Buyer Behavior

Consumer Buying Behavior
The buying behavior of individuals and households who buy goods and services for personal consumption
Buyer’s Black Box
It’s very difficult to “see” inside the consumer’s head and figure out the whys of buying behavior (that’s why it’s called the black box).
Represents the Buyer’s Characteristics and Buyer’s decision processes
Buyer’s Responses –
Buying attitudes and preferences, Purchase behavior, what the buyer buys, when, where and how much. Brand and company relationship behavior
Model of Buyer Behavior –
The Environment – Buyer’s Black Box – Buyer Responses
Factors Influencing Consumer’s behavior
1. Cultural
2. Social
3. Personal
4. Psychological
Cultural Factors:
Many brands now target specific subcultures—such as Hispanic American, African American, and Asian American consumers—with marketing programs tailored to their specific needs and preferences. For example, P&G’s CoverGirl Queen cosmetics line was inspired by Queen Latifah to “celebrate the beauty of women of color.”
Personal Factors:
People’s buying decisions reflect and contribute to their lifestyles—their whole pattern of acting and interacting in the world. For example, Pottery Barn sells more than just home furnishings. It sells an upscale yet casual, family- and friend-focused lifestyle.
An individual’s buying decisions are affected by an incredibly complex combination of external and internal influences.
Psychological Factors:
Motivation, Perception, Learning, Beliefs and Attitude
Most basic because of person’s want and behaviors. Culture is learned from the society, family, and other institutions. Culture reflects basic values, perceptions, wants, and behaviors. Cultural shifts create opportunities for new products or may otherwise influence consumer behavior.
Groups of people with shared value systems based on common life experiences and situations.
Major Subculture Groups in the US –
Hispanic consumers
African-American consumers
Asian-American consumers
Mature consumers
Social Class –
Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors.
The Major American Social Classes:
1. Upper Class
A. Upper Upper
B. Lower Uppers
2. Middle Class
A. Upper Middle
B. Middle Class
3. Working Class
4. Lower Class
A. Upper Lowers
B. Lower Lowers
Social class is not determined by a single factor but by a combination of all of these factors. America’s different social classes show distinct brand preferences.
Upper Uppers (1%)
The social elite who live on inherited wealth. They give large sums to charity, own more than one home, and send their children to the finest schools.
Lower Uppers (2%)
Americans who have learned high income or wealth through exceptional ability. They are active in social and civic affairs and buy expensive homes, education and cars.
Upper Middle (12%)
Professionals, independent business owners, and corporate managers who possess neither family status nor unusual wealth. They believe in education, are joiners and highly civic minded and want the better things in life.
Middle Class (32%)
Average-pay white and blue-collar workers who live on the better side of town. they buy popular products to keep up with trends. Better living means owning a nice home in a nice neighbor hood with good schools.
Working Class (38%)
Those who lead a “working-class lifestyle”, whatever their income, school background or job. They depend heavily on relatives for economic and emotional support, advice on purchases and assistance in times of trouble.
Upper Lowers (9%)
The working poor. Although their living standards is just above poverty, they strive towards a higher class. However they often lack education and are poorly paid for unskilled work.
Lower Lowers (7%)
Visibly poor, often poorly educated unskilled laborers. They are often out of work and some depend on public assistance. They tend to live a day-to-day existence.
Social Factors:
Groups and Social Networks – Membership, reference and aspirational groups – Marketers attempt to reach opinion leaders within groups important to target market
Opinion leaders are recruited as brand ambassadors or for buzz marketing
Groups and Social Networks
Online social networks allow marketers to interact with consumers
Social Factors:
1. Family
2. Roles and status
Family –
Strongly influences buying behavior
Gender stereotypes for certain types of purchases are relaxing in the U.S.
Children are very influential, and have substantial disposable income of their own
Roles and status –
Role = Expected activities
Status = Esteem given to role by society
A person’s pattern of living as expressed in his or her activities, interests, opinions
Personal Factors:
People within the same subculture, social class, and occupation may have different lifestyles
People buy the lifestyles represented by products or services
PersonicX 21 Life-stage groupings –
lets marketers see customers as they really are and target them precisely
Personality –
Refers to the unique psychological characteristics that distinguish a person or group
Generally defined in terms of traits
Can be useful in analyzing consumer behavior for certain product or brand choices
Brands may also have personalities
A motive is a need that is sufficiently pressing to direct the person to seek satisfaction
Motivation Research
Refers to qualitative research designed to probe consumers’ hidden, subconscious motivations. Consumers often don’t know or can’t describe why they act as they do. Thus, motivation researchers use a variety of probing techniques to uncover underlying emotions and attitudes toward brands and buying situations.
Maslow’s Hierarchy of Needs –
1. Physiological Needs
2. Safety Needs
3. Social Needs
4. Esteem Needs
5. Self-actualization Needs
Physiological Needs –
Hunger, Thirst
Safety Needs –
Security, Protection
Social Needs –
Sense of Belonging, Love
Esteem Needs –
Self-esteem, Recognition, Status
Self-actualization Needs –
Self-development and realization
Process by which people select, organize, and interpret information to form a meaningful picture of the world
Learning –
Changes in an individual’s behavior arising from experience
Occurs due to an interplay of drives, stimuli, cues, responses, and reinforcement
Strongly impacted by the consequences of an individual’s behavior
Behaviors with satisfying results tend to be repeated
Belief –
A descriptive thought that someone holds about something
Attitude –
A person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea
Buyer Decision Process –
Need Recognition => Information Search => Evaluation of Alternatives => Purchase of Decision => Postpurchase Behavior
Need Recognition and Information Search –
Need recognition can be triggered by internal or external stimuli
Advertising can be very helpful in stimulating need recognition
Several sources of information may be used as part of the information search
Personal sources
Commercial sources
Public sources
Experiential sources
Evaluation of Alternatives and Purchase Decision
Evaluation process is dependent upon the specific buying situation and the individual consumers
Purchase decision – Two factors may interfere with realization of purchase intentions:
Attitudes of others
Unexpected situational factors
Post-Purchase Behavior
Consumer satisfaction is a function of consumer expectations and perceived product performance
Performance < Expectations --- Disappointment Performance = Expectations --- Satisfaction Performance > Expectations — Delight
Stages in the Adoption Process –
1. Awareness
2. Interest
3. Evaluation
4. Trail
5. Adoption
Consumer becomes aware of the product but lacks information about it
Consumer seeks information about new product
Consumer considers whether trying the new product makes sense.
Consumer tries new product on a small scale to improve his or her estimate of it’s value
Consumer decides to make a full and regular use of the new product
Adopter Categorization:
1. Innovators (2.5%)
2. Early Adopters (13.5%)
3. Early Majority (34%)
4. Late Majority (34%)
5. Laggards (16%)
New-product marketers often target innovators and early adopters, who in turn influence later adopters
Product Characteristics That Influence the Rate of Adoption:
1. Relative Advantage
2. Compatibility
3. Complexity
4. Divisibility
5. Communicability
Relative Advantage:
Is the innovation superior to existing products?
Does the innovation fit the values and experience of the target market?
Is the innovation difficult to understand or use?
Can the innovation be used on a limited basis?
Can results be easily observed and described to others?
Business Buyer Behavior –
Refers to the buying behavior of 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
Business Markets
-Involve far more dollars and items than do consumer markets
Market structure and demand differs from consumer markets:
-Contains far fewer but larger buyers
-Business demand is derived from consumer demand
-Business markets have more fluctuating demand
Nature of the buying unit:
-Business purchases involve more decision participants
-Business buying involves a more professional purchasing effort
Key differences exist between business and consumer buying situations:
-Business buyers usually face more complex buying decisions
-The business buying process tends to be more formalized
-Buyers and sellers are much more dependent on each other in business markets
Model of Business Buying Behavior
The Environment => The Buying Organization => Buyer Responses
The Environment –
Marketing Stimuli = 4 P’s – Product, Price, Place, Promotion
Other Stimuli = Economic, Technological, Political, Cultural, Competitive
The Buying Organization (Organizational Influences)
The Buying Center (Interpersonal and Individual Influences) => Buying Decision Process
Buyer Responses
Product and Service Choice, Supplier Choice, Order Quantities, Delivery Terms and Times, Service Terms, Payment
Types of Buying Situations
1. Straight Buy
2. Modified Rebuy
3. New Task
4. Systems (Solutions Selling)
Straight Buy –
Buyer routinely buys something without any modifications
Modified Rebuy –
Buyer wants to modify product specifications, prices, terms, or suppliers
New Task –
Buyer purchases a product or service for the first time
Systems (Solutions Selling
Becoming more common among companies
Buying Center:
All the individuals and units that participate in the business buying-decision process
-The buying center is not a fixed or formally identified unit
-It is a set of buying roles assumed by different people for different purchases
Major Influences on Business Buyer Behavior
Environmental, Organizational, Interpersonal, Individual
Environmental –
The Economy, Supply Conditions, Technology, Politics/Religion, Competition, Culture and Customs
Organizational –
Objective, Strategies, Structure, Systems, Procedures
Interpersonal –
Influence, Expertise, Authority, Dynamics
Individual –
Age/Education, Job Position, Motives, Personality, Preferences, Buying Style
Stages of the Buying Process –
Problem Recognition => General Need Description => Product Specification => Supplier Search => Proposal Solicitation => Supplier Selection => Order Routine Specifications => Performance Review
E-Procurement (Online Buying) –
E-Procurement presents several benefits and problems
Online Purchasing (E-Procurement) can be implemented in many ways:
-Reverse Auctions
– Trading Exchanges
– Company Buying Sites
– Extranet Links with key suppliers

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