Lecture 5

Consumer Markets
and Business Buyer
Behaviour

MSc. Uyen H. Nguyen 1

Learning Objectives

Definition Identify Discuss

Consumer market Four major factors Adoption and
that influence diffusion process for
consumer buyer new products.
A simple model of behaviour
consumer and
business buyer Differences in
behaviour Major types of buying Business market &
decision behaviour business buyer
behaviours
The stages in the
buyer decision
process

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Define the consumer market
vs business market
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 Consumer Markets
Consumer markets are made up of all the
individuals and households that buy or
acquire goods and services for personal
consumption.
Business Markets
Business markets differ in many way from
consumer markets including market
structure and demand, nature of the buying
unit, types of decisions and the decision
process.

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Consumer Buyer Behaviour Business Buyer Behaviour

Business Buyer
Behaviour
Consumer Buyer
refers to the buying
Behaviour
behaviour of the
is the buying behaviour of
final consumers—individuals
organizations that buy
and households that buy goods and services for
goods and services for use in the production of
personal consumption. other products and
services that are sold,
rented, or supplied to
others.

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The Model of Buyer Behaviour

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 Four major factors
that influence consumer buyer
behaviour
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Characteristics Affecting Consumer behaviour

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Cultural Factors

Cultural Subculture Social class

Culture is the set of Subcultures are groups Social classes are society’s
basic values, of people within a culture relatively permanent and
perceptions, wants, and with shared value ordered divisions whose
behaviours learned by systems based on members share similar values,
a member of society common life experiences interests, and behaviours.
from family and other and situations. Measured as a combination of
important institutions. occupation, income, education,
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wealth, and other variables 10
Social Factors

Groups &
social Family Roles & status
networks

Group is two or more Family is the most Role and status can be
people who interact to important consumer- defined by a person’s
accomplish individual or buying organization in position in a group.
mutual goals society.
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 Fun facts
$1.2 trillion
The nation’s kids
60% and tweens
influence an
Women account for
41% 60% of all new
estimated $1.2
trillion of spending
technology annually.
41% of men identify purchases and
themselves as influence more than
primary grocery 80 percent of all
shoppers in their new car purchases.
households

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Groups and Social Networks
Types of Groups

Membership Groups Aspirational Groups Reference Groups

• Groups with direct • Groups an • Groups that form a

influence and to individual wishes to comparison or
which a person belong to reference in forming
belongs attitudes or
behaviour

Social Networks

• Online social networks • Virtual worlds

• Buzz marketing • Word of mouth
• Social media sites • Opinion leaders
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Personal Factors
• Age and life-cycle stage
• Occupation affects the goods and services bought by consumers.
• Lifestyle
• Personality and self-concept
• Economic situations include trends in:

Personal Interest
Spending Savings
income rates

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Personal Factors

KitchenAid sells an
entire cooking and
entertainment
lifestyle to
“Kitchenthusiasts.”

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 Lifestyle
Personal Factors

Lifestyle is a person’s pattern of

living as expressed in his or her
psychographics.

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Personality
Personal Factors

Personality refers to the unique

psychological characteristics that
distinguish a person or group.

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 Brand Personality Traits

Sincerity Excitement Competence

Sophistication Ruggedness

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Psychological Factors
Developing Marketing Information

Motivation

Perception

Learning

Beliefs and attitudes

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 Psychological Factors
A motive (or drive) is a need that is sufficiently pressing to direct the person to
seek satisfaction of the need.
Motivation research refers to qualitative research designed to probe
consumers’ hidden, subconscious motivations.

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Psychological Factors

Perceptual Processes

Selective Selective Selective

attention distortion retention

Selective attention is Selective distortion is Selective retention is the

the tendency for people
to screen out most of the
information to which they
are exposed.
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the tendency for people to tendency to remember
interpret information in a good points made about a
way that will support what brand they
they already believe.
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Psychological Factors
Learning is the change in an individual’s behaviour arising from experience
and occurs through the interplay of:

Drives Stimuli Cues

Responses Reinforcement

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Psychological Factors
A belief is a descriptive thought that a person has about something based on:
• knowledge
• opinion
• faith
An attitude describes a person’s relatively consistent evaluations, feelings,
and tendencies toward an object or idea.

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Major types of buying decision
behaviour
Stages in the buyer decision process

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 Types of Buying Decision behaviour

Complex buying behaviour

Dissonance-reducing buying behaviour

Habitual buying behaviour

Variety-seeking buying behaviour

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Types of Buying Decision Behaviour
Buying behaviour varies greatly
for different types of products. For
examples, someone buying a new High Involvement Low Involvement
car undertakes a full information-
gathering and brand evaluation
process

Complex buying Variety-seeking

Significant behaviour buying behaviour
differences between
At the other extreme, for low
brands involvement products, consumers
may simply select a familiar
brands out of habit. For example,
what brands of sugar do you buy
Few differences Dissonance- and why?
Habitual buying
between brands reducing buying
behaviour
behaviour

Sources: Adapted from Henry Assael, Consumer Behaviour and Marketing Action (Boston: Kent
Publishing Company, 1987), p.87
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Figure 5.5 The Buyer Decision Process
The buying process starts long
before the actual purchase and
continues long after. Therefore,
marketers must focus on the
entire buying process, not just the
purchase decision.

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Stage 1 - Need Recognition

Need recognition is the first stage of the buyer decision process, in which
the consumer recognizes a problem or need triggered by:

Internal stimuli External stimuli

E.g. Hunger or Thirst E.g. An advertisement,

Friends’ discussion

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 Stage 2 - Information Search

Information search is the stage of the buyer decision process in which the
consumer is motivated to search for more information.

Sources of information
Personal Commercial Public Experiential
sources sources sources sources

E.g. Family, E.g. Advertising, E.g. Social media, E.g. Examining

Friends, Packaging, Mass media, product
Neighbours, Displays, etc. Online reviews,
Acquaintances etc.

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 Stage 3 - Evaluation of Alternatives

Alternative evaluation is the stage of the buyer decision process in which

the consumer uses information to evaluate alternative brands in the choice
set.

Several evaluation processes are at work, rather than single and simple evaluation.

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 Stage 4 - Purchase Decision

Purchase decision is the buyer’s decision about which brand to

purchase.
The purchase intention may not be the purchase decision due to:
• Attitudes of others
• Unexpected situational factors

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 Stage 5 - Postpurchase behaviour

Postpurchase behaviour is the stage of the buyer decision process in

which consumers take further action after purchase, based on their
satisfaction or dissatisfaction.

Cognitive dissonance is buyer discomfort

caused by postpurchase conflict.
Postpurchase customer
satisfaction is a key to building profitable customer
relationships.

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Process for new products

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sample text.Insert your desired text here.

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The Buyer Decision Process for New Products
The adoption process is the mental process an individual goes through from
first learning about an innovation to final regular use.
• Stages in the adoption process include:

Awareness Interest Evaluation Trial Adoption

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Individual Differences in Innovativeness
Innovators
Early Adopters
Early Mainstream
Late Mainstream
Lagging Adopters

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Analyzing and Using Marketing Information
Influence of Product Characteristics on Rate of Adoption

Relative
Compatibility Complexity
advantage

Divisibility Communicability

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Business Buyer Behavior

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Business Buyer Behavior

• Business buyer behavior

• Purchasing goods and services are used in the production of other products
and services
• Business-to-business (B-to-B) marketers must understand business markets
and business buyer behavior
• Business buying process: Determining which products and services to
purchase
• Finding, evaluating, and choosing among alternative suppliers and brands

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Business Markets

• Business markets are huge and involve more money and items than consumer
markets.
• Differ from consumer markets in terms of
o Market structure and demand
o Nature of the buying unit
o Types of decisions and the decision process
• Business market structure and demand
üFewer but larger buyers
üDerived demand: Business demand that comes from the demand for
consumer goods
üInelastic and fluctuating demand
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Nature of the Buying Unit

• Nature of the business market buying unit

o More decision participants
o More professional purchasing effort

Types of Decisions
• Business purchases
o More complex buying decisions
o Large sums of money
o Complex technical and economic considerations
o Interactions among people at many levels of the buyer’s organization

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 Decision Process
• Buying processes
ØLonger and more formalized procedures
ØBuyer and seller more dependent on each other
• Supplier development: Systematic development of networks of
supplier-partners to ensure a dependable supply of products and
materials

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Figure 5.6 - A Model of Business Buying Behavior

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Types of Buying Situations

Straight rebuy
• Buyer routinely reorders 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 selling (or solutions selling)

• Buying a packaged solution to a problem from a single seller
• Avoids the separate decisions involved in a complex buying situation
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Types of Buying Situations

Solutions selling: IBM works with Six

Flags to provide a complete solution.

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Participants in the Business Buying Process

• Buying center: All the individuals and units that play a role in the purchase
decision-making process
üActual users of the product or service
üPeople who make the buying decision
üPeople and units influencing the buying decision
üPeople who do the actual buying
üIndividuals and units controlling the buying information

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Figure 5.7 - Major Influences on Business Buying Behavior

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Figure 5.8 - Stages of Business Buying Behavior

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E-Procurement and Online Purchasing

• Purchasing through electronic connections between buyers and sellers–usually

online
• E-procurement occurs through
o Reverse auctions
o Online trading exchanges
o Company buying sites
o Extranet links with key suppliers

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Benefits and Problems of E-Procurement

Benefits Problems
• Cuts transaction costs • Can affect the customer-
• Results in efficient supplier relationship
purchasing for both buyers • Pits suppliers against one
and suppliers another
• Reduces the time between
order and delivery
• Helps an organization keep
better track of all purchases
• Frees buyers from a lot of
paperwork

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Business-to-Business Digital and Social Media Marketing

• B-to-B marketers are now using a wide range of digital and

social media marketing approaches.
• Compared with traditional media and sales approaches,
digital and social media can create greater customer
engagement and interaction.

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