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Haas School of Business

ugba 106
Marketing
Lecture 6: Buyer Behavior

David Robinson
faculty.haas.berkeley.edu/robinson/ugba106

© D. Robinson, 2009
Part 1: Consumer Buyer Behavior

• Definitions of the term


• Different types of customers
• Model for new product adoption
• Social Influences on behavior
• Problem solving
• Limited problem-solving
“Buyer Behavior”

• Refers to the steps purchasers go


through before buying
• Attempts to understand their thinking
(unobservable)
(Editorial Opinion on the A&K Text Ch. 5)

1. Psychological theories are not very helpful for


marketing managers, e.g. Stimulus-response,
Freudian, and Maslow (p. 142, 143 etc)

2. The approach I use could be described as


“cognitive”
It’s helpful to remember there are
different types of customers
The key is that each type of customer
(and potential customer) is going to
Don’t need need a different
product class Marketing Strategy

Not yet Not yet Buy from


buying users others

Customer Occasional Regular Loyal


It’s helpful to remember there are
different types of customers
Conversion Brand
of prospects switching
Don’t need
product class

Not yet Not yet Buy from


buying users others

Customer Occasional Regular Loyal


It’s helpful to remember there are
different types of customers
Even existing customers can be
segmented and need a different
Marketing Strategy

Buy more Buy more


often! when you
buy!

Customer Occasional Regular Loyal

Don’t
leave me!
Consumer Behavior

Why some people buy from us. . . and


others don’t—even when we think we
have a compelling value proposition
Part I: Influences on Buying
Factors Affecting Consumer Buying
(A&K Fig 5.2)

Probably
more important
than most
Americans are
prepared to admit
Factors Affecting Consumer Buying
So-called
“Aspirational
Group”
Factors Affecting Consumer Buying

Opinion leaders
have a social
influence
Life stage
and cohort
Factors Affecting Consumer Buying
more important
than age
per se

Do you consider
yourself “Tech
Savvy”? a “Geek”?
Fashion-forward or
“Classic?
Factors Affecting Consumer Buying
“Lifestyle”
Marketing
Lifestyle Marketing

• “AIO” dimenisions:
• Activities
• Interests
• Opinions
Factors Affecting Consumer Buying
Frankly,
not very
useful
Part II: Models of
Buying Behavior
Consumer Buying Behavior

Consumer Purchase

Low involvement Major Purchase

Repurchase New Product Adoption


Repurchase Behavior for
Mature Products
Consumer Buying Behavior

Consumer Purchase

Low involvement
Habitual

Repurchase
Variety Seeking
Habitual or Variety Seeking ?

1. Varies between
customers (some seek
Habitual more thrills)

2. Some products are more


Variety Seeking likely to be “habitual”
3. No way to predict it—just
ask the question and
observe it:
Habitual or Variety Seeking ?
• Yoghurt • Deodorant
What Strategy ?
1. Availability
2. Channel relations
3. Ward off
competitors

Habitual

Variety Seeking

a. Provide variety
within the brand
(yoghurt), or
b. Live with it
(restaurants)
Consumer Buying Behavior

Consumer Purchase

Low involvement Major Purchase

Repurchase New Product Adoption


Model for new product adoption,
CPG*s (not “major purchases”)

Awareness Interest Trial Repeat

* CPGs: Consumer Packaged Goods


Making use of the
New Product Adoption Model

Awareness Interest Trial Repeat

1. No awareness
2. Awareness but no interest
3. Interest but no trial
4. Trial and low repeats
Consumer Buying Behavior

Consumer Purchase

Low involvement Major Purchase

Extensive Search Model


Buyer Decision Process
(Applies to major purchases, not routine)

1. Become aware of the problem (ads help!)


2. Gather information - search (shopping?)
3. Evaluate alternatives
4. Make decision
5. Post-purchase behavior
(possible dissonance)
Extensive Search Model

See text
at p. 146

Awareness Consid- Choice


Total set Decision
set eration set
Extensive Search Model

Availability,
price,
features

Awareness Consid- Choice


Total set Decision
set eration set

Critical:
Advertising Performance,
etc. value
proposition
Summary of Consumer Behavior
(from a “case” perspective)
1. Major purchase or “low involvement” ?
2. If low involvement,
a. Habitual
b. Variety seeking
3. If a Major Puchase, get into the consideration set,
then have the best value proposition
4. Think, what are the influences here?
a. Do product attributes dominate, or
social influences (groups), opinion leaders?
b. Are “image” benefits important?
Admin for Week 6
Buyer Behavior in
Business Markets
Business vs. Consumer Markets

• Fewer buyers
• Larger buyers
• Close supplier-customer relationship
• Geographically concentrated
• Derived demand
• Inelastic demand
• Fluctuating demand
Business vs. Consumer Markets
• Professional purchasing
• Gifts and golf trips really don’t work
• Multiple buying influences
• Long time frame …multiple sales calls
• May involve reciprocity or partnership
• Financing likely to be a “reason to buy”

K&A Fig. 5.7


Three Types of Business Buying

Type Problem/Opportunity
1. Straight re-buy 1. Hard to be even considered

2. Convince customer there’s


2. Modified re-buy a problem and a need to
change the specs
What is
systems
buying?
3. Reach the influencers

3. New task buying


Business Buying Process
(Fig 5.9 of the text)

How do we get
“awareness”?

Note that in B2B, the customer may specify the product


Some “tricks” with
Institutional Buyer Behavior
1. Buyer may not be aware of the problem that
needs to be solved
(e.g. Haas networked copiers) Important

2. Most buyers have budget cycles and


“no approval necessary” price points
3. The key is to get on the bid list and provide
exactly what the customer wants
4. B2B salespeople work lists (find one good
customer, get two more like that)
Summary: Buyer Behavior

• Ask the question:


“What’s the buyer behavior here?”
• Understand that it’ll be different depending
on the product class
• Believe the new product “Awareness,
Interest . . .” model, and do your research