Chapter 6 Notes

Describe the consumer market and the major factors that influence consumer buyer behaviour Consumer Buyer Behaviour Characteristics affecting consumer behaviour Consumer buyer decision process Product adoption process Business Buyer Behaviour Influences on business buyer behaviour Types of business buying situations Business buying process Consumer behaviour refers to the buying behaviour of consumers individuals who buy goods and services for their own use or consumption. Consumer buyer behaviour is important to understand how consumers would react to marketers program. A consumer market is made up of all individuals in a particular geographic region, who are old enough to have their own money and to choose how to spend it. Model of Consumer Behaviour Input - Marketing and environmental stimuli enter the buyer's Black Box. Process (Buyer's Black Box) - Consists of the buyer's characteristics and buying processes. Output - Black Box in turn prompts buyers responses such as product and brand choice, dealer choice, and purchasing timing and amount. Characteristics Affecting Consumer Behaviour Cultural Factors: Culture relates to the set of basic values, perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Culture is the most basic cause of a person's wants and behaviour. Culture is learned from family, school, peers, and colleagues. Culture includes basic values, perceptions, wants, and behaviours. Subculture:

Smaller groups of people with shared value systems based on common life experiences and situations. Major groups: Native Canadians French Canadians Ethnic consumers These subcultures have unique behaviours where marketers are expected to acknowledge when targeting and developing marketing programs. Social Class: Relatively permanent, ordered divisions. Members share similar values, interests, and behaviours. Determined by a combination of: Occupation Income Education Wealth Other variables Opinion Leaders: Is a person, not necessarily a celebrity, who has the ability to influence the consumer choices of large numbers of people. Marketers use opinion leaders in advertising as well as in personal appearances to promote their products. They could also act as unofficial spokesperson who could significantly influence product decisions. Influence of Groups: A consumer's choice could be influenced by many social groups that they belong to. There are many groups: Reference group is where one does not belong to but acts as a point of comparison or reference in forming attitudes. Aspirational groups is one that an individual will hope to belong to at a future point. Social Networks: These are online communities such as Facebook, Twitter, and Tumblr where people with common interests form social networks and tend to show similar characteristics. Marketers could use these networks to identify different segments and target their programs to fit into the unique needs of these sub groups. Family: Family members who are in the immediate family or in the extended could influence buyer behaviour.

extended could influence buyer behaviour. Most important consumer buying organization Roles and Status: The role played by an individual in society, in organizations, and families will influence their buying behaviour to a very large extent. Age and Stage of Life: Consumer needs change over time. Difference between chronological and perceived age. Occupation: What we do affects what we need and how much we have to spend. Companies can target special occupational groups. Lifestyle: A person's pattern of living as express din his or her activities, interests, and opinions. Personality: Described in terms of traits such as confidence, boldness, outgoingness, etc. Plays an important role in the decision making process. Perception: Information inputs as sensations received through the sense organs. Perception is the process of selecting, organizing, and interpreting information inputs to produce meaning which will determine behaviour. Motivation: Explains Maslow's Hierarchy of Needs; how individuals are motivated. Physiological - what you need to survive Safety - protection, security Social - sense of belonging; love Esteem - status, recognition Self-actualization - self-development Consumer behaviour is expected to be different in each of these different stages of the needs hierarchy. Learning: Changes in an individual's behaviour arising from experience. Strongly influenced by the consequences of an individual's behaviour. Beliefs and Attitudes:

A belief is a descriptive thought that a person holds about something. An attitude is a person's relative consistent evaluation of feeling towards an idea. Both beliefs and attitudes will change a person's buying behaviour to a large extent. Identify and discuss the stages in the consumer buyer decision process Post Purchase Behaviour Consumer satisfaction is a function of consumer expectations and perceived product performance. If performance is below expectation, dissatisfaction results. If performance meets expectations, satisfaction results. If performance exceeds expectations, delight results. Cognitive Dissonance Buyer discomfort caused by post-purchase conflict. Affects major purchases; anxiety of not knowing if the right choice was made. Customer follow-up programs help to reduce this problem. Level of satisfaction will influence repeat purchase. Describe the adoption process and consumer behaviour for high-tech products Product Adoption Process and Stages Adoption relates to the mental process through which an individual passes from first learning about a new product to becoming a regular user of the product. Stages include: Awareness - becoming aware of a new product Interest - seeking information about the product Evaluation - deciding whether trial makes sense Trial - trying the product out on a small scale Adoption - deciding to purchase the product Individual Differences in Innovativeness People differ greatly in their readiness to try new products. Could be categorized as: Innovators - venturesome, opinion leaders Early adopters - guided by respect of opinion leaders Early majority - adopt new ideas before average person Late majority - skeptical Laggards - suspicious of changes and adopt when it becomes a tradition

Influences of Product Characteristics on the Rate of Adoption Relative advantage Compatability Complexity Dividsibility Communicability Define the business market and identify the major factors that influence business buyer behaviour Business Markets and Business Buying Behaviour Business buying behaviour relates to the buying behaviour of organizations that buy goods and services for use int hep reduction of other products and services that are sold, rented, or supplied to others. Business markets are different from consumer markets in many ways in terms of: Market structure and demand Nature of buying unit Types of decisions Decision process itself Business Markets Market structure and demand: Contains far fewer, but larger buyers. Customers 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. Model of Business Buyer Behaviour Input Marketing and environmental stimuli enter the buyer's Black Box. Process (Buyer's Black Box) Buying centre and organizational buying processes. Output Black Box in turn prompts buyer's responses such as product, brand choice, supplier choice, order quantity, delivery terms, payment, and service terms. Types of Business Buying Situations Straight re-buy The buyer routinely reorders something without any modifications.

modifications. Modified re-buy The buyer on reorder wants to modify specifications, price, terms, or suppliers. New task buy The buyer purchases a product or service for the first time. Business Buying Centre Decision-making unit of a buying organization is called its buying centre. In the buying centre all the individuals and units participate in the business buying - decision process. Buying centre members: Users Deciders Influences Buyers Gatekeepers Influences on Business Buyer Behaviour Environmental - primary demand, economics, supply conditions, laws, etc. Organizational - objectives, policies, procedures, organizational structure, and systems Interpersonal - authority, status, empathy, and persuasiveness Individual - age, education, job position, personality, and risk attitudes List and define the steps in the business buying-decision process The Business Buying Process For new or first-time purchase: Problem recognition - identifies a gap between the present and the desired state General need description - describes the characteristics and quantity needed Product specification - through a value analysis specifications of a product to be purchased would be arrived at Supplier search - search the best vendors who could supply the product Proposal solicitation - invites qualified suppliers to submit proposals Supplier selection - members of the buying centre would review proposals and select the best supplier Order-routine specification - the buyer prepares the purchase order including all terms, conditions, and requirements

order including all terms, conditions, and requirements Performance review - reviews supplier's performance 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

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