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After studying this chapter you will: Understand the consumer market and the major factors that influence consumer buyer behavior, identify and discuss the stages in the buyer decision process, describe the adoption and diffusion process for new products, define the business market and identify the major factors that influence business buyer behavior, list and define the steps in the business buying decision process.
Chapter Five Consumer and Business Buyer Behavior Roadmap: Previewing the Concepts Understand the consumer market and the major factors that influence consumer buyer behavior Identify and discuss the stages in the buyer decision process Describe the adoption and diffusion process for new products Define the business market and identify the major factors that influence business buyer behavior List and define the steps in the business buying decision process Copyright 2007, Prentice Hall, Inc 5-2 Case Study HarleyDavidson – Devoted Consumers Building Success Measuring Success Offers good bikes, upgraded showrooms and sales tactics Research has helped to understand customers’ emotions and motivation Consumer emotions, motivations, and lifestyle have been translated into effective advertising Currently has 23% of all U.S bike sales and 50% of heavyweight segment Demand above supply with waiting lists up to years Sales doubled in the past six years while earnings have tripled 2005: 19th straight year of record sales and income Consumer Buying Behavior Refers to the buying behavior of people who buy goods and services for personal use These people make up the consumer market The central question for marketers is: – “How consumers respond to various marketing efforts the company might use?” Model of Buying Behavior Marketing factors and other stimuli are inputs into the “buyer’s black box.” Here, stimuli are evaluated in light of the buyer decision process and the buyer’s characteristics Buyer responses influence choice of the product, brand, vendor, as well as the timing and amount of purchase Culture Culture is the most basic cause of a person's wants and behavior – Culture is learned from family, church, school, peers, colleagues – Culture reflects basic values, perceptions, wants, and behaviors – Cultural shifts create opportunities for new products or may otherwise influence consumer behavior Consumer Buying Behavior Factors influencing consumer behavior: – Cultural factors: • Culture, subculture, social class – Social factors: • Reference groups, family, roles and status – Personal factors: • Age/life-cycle, occupation, economic situation, lifestyle, personality and self-concept – Psychological factors: • Motivation, perception, learning, beliefs, and attitudes Culture Subculture – Groups of people with shared value systems based on common life experiences Major Groups – Hispanic Consumers – African-American Consumers – Asian-American Consumers – Mature Consumers Social Class Society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors Measured by a combination of: occupation, income, education, wealth, and other variables Social Factors Groups: – Membership, Reference (Opinion Leaders), Aspirational Family: – Most important consumer buying organization Roles and Status: – Role = Expected activities – Status = Esteem given to role by society Buying Decision Process Consumer satisfaction is a function of consumer expectations and perceived product performance – Performance < Expectations - Disappointment – Performance = Expectations - Satisfaction – Performance > Expectations - Delight Buying Decision Process Cognitive dissonance: a buyer’s doubts shortly after a purchase about whether it was the right decision Stages in the Adoption Process Awareness: Consumer becomes aware of the new product, but lacks information about it Interest: Consumer seeks information about new product Evaluation: Consumer considers whether trying the new product makes sense Trial: Consumer tries new product on a small scale to improve his or her estimate of its value Adoption: Consumer decides to make full and regular use of the new product Product Adopter Categories Innovators Early adopters Early majority Late majority Laggards Product Characteristics That Influence the Rate of Adoption Relative Advantage: Is the innovation superior to existing products? Compatibility: Does the innovation fit the values and experience of the target market? Complexity: Is the innovation difficult to understand or use? Divisibility: Can the innovation be used on a limited basis? Communicability: Can results be easily observed or described to others? Business Markets & Business Buyer Behavior The business market is vast and involves far more dollars and items than consumer markets 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 Market Structure and Demand: – Contains far fewer but larger buyers – Buyers are more geographically concentrated – Business demand is derived from consumer demand Nature of the Buying Unit: – Business purchases involve more decision participants – Business buying involves a more professional purchasing effort Types of Decisions and the Decision Process Business buyers usually face more complex buying decisions Business buying process tends to be more formalized Buyers and sellers are much more dependent on each other Types of Buying Situations Straight rebuy: – Fairly routine purchase decision Modified rebuy: – Requires some research and modified product specifications, prices, terms, or suppliers New task: – Requires extensive research and evaluation of products, suppliers, etc Participants in the Business Buying Process Buying center: The decisionmaking unit of a buying organization – Not fixed or formally identified unit – Membership will vary for different products and buying tasks Buying center members: – – – – – Users Deciders Influencers Buyers Gatekeepers Members can play multiple roles Influences on Business Buyer Behavior Environmental Organizational Interpersonal Individual The Business Buying Process Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order-routine specification Performance review e-Procurement Advantages for buyers: – Access to new suppliers – Lowers purchasing costs – Hastens order processing and delivery Advantages for vendors: – Share information with customers – Sell products and services – Provide customer support services – Maintain ongoing customer relationships e-Procurement Key benefits: – Reduces costs to buyers and sellers, and makes for more efficient purchasing – Reduces the time between order and delivery – Frees purchasing staff to focus on more strategic issues Rest Stop: Reviewing the Concepts Understand the consumer market and the major factors that influence consumer buyer behavior Identify and discuss the stages in the buyer decision process Describe the adoption and diffusion process for new products Define the business market and identify the major factors that influence business buyer behavior List and define the steps in the business buying decision process Copyright 2007, Prentice Hall, Inc 5-35 ... The business market is vast and involves far more dollars and items than consumer markets Business buyer behavior refers to the buying behavior of the organizations that buy goods and services... 20 05: 19th straight year of record sales and income Consumer Buying Behavior Refers to the buying behavior of people who buy goods and services for personal use These people make up the consumer. .. evaluated in light of the buyer decision process and the buyer? ??s characteristics Buyer responses influence choice of the product, brand, vendor, as well as the timing and amount of purchase Culture