BF3316

PRINCIPLES OF Understand Buyer Behaviour

MARKETING
Consumer Buying Business Buying
Behaviour Behaviour
Week 4: Understanding Buying Behaviour
Factors Affecting Factors Affecting
Consumer Buying Business Buying
Behaviour Behaviour

Consumer Buying Business Buying

Decision-making Decision-making
Process Process

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LEARNING OUTCOMES
At the end of this chapter, you will be able to:
• describe the customer buying decision process
• explain the factors affecting consumer buying behaviour
• discuss the business buying behavior and its influencing factors

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3.1 Consumer Buying Behaviour
Definition of Consumers
• Consumers are individuals who boy products and services for themselves or
on behalf of their households. They are the final users or the end users of
these products.
• They buy things that enable them to survive the physical demands of life,
but they also use these purchases to indicate their roles in society, to
express their personalities, to reveal their attitudes and opinions, to
emphasise the values they hold, and to demonstrate their wealth.
• In brief, the purchased products and services are selected not only to
satisfy their psychological needs, but also their sociological needs.

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3.1 Consumer Buying Behaviour
The Meaning of Consumer Buying Behaviour
• Consumers buying behavior describes how consumers make purchase
decisions and how they use the purchased products. Therefore it is
important to understand:
 How the decision-making process come about?
 Why do consumers make the purchases?
 What are the factors that influence consumer purchases?
• When buying products, you, a consumer, will generally go through the
consumer buying decision-making process. Most large companies conduct
in-depth research on consumer buying decisions to answer questions such
as what do consumers buy, where do they buy, how much do they buy, when
do they buy, why do they buy, etc.
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3.1 Consumer Buying Behaviour
The Meaning of Consumer Buying Behaviour (Cont’d)
• Consumers behavior is a study related to psychology and sociology of the
people, your customers or potential people. You study their behavior
because you want to know their reactions. With a proper understanding of
consumer behavior, managers can reduce uncertainty when creating the
marketing mix.
• To answer ‘why’ in consumer buying behavior and buying decisions is not
easy, as the answer is often locked deep within consumer minds.

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3.1 Consumer Buying Behaviour
Stimulus-response Model
• The consumer behavior model (the black box model) illustrates how people
respond either physiologically or psychologically to a stimulus.
• In this model, the black box is the consumer because you do not understand
the way consumer thinks and behaves. However, you can observe how the
consumer responds to certain inputs or stimuli.
• Consumers are affected by two types of marketing stimulus: from marketers,
and from the environment, that is, the external situation the consumer is in.
• For a marketer, finding out how consumers respond to stimulus is as important
as understanding the thought processes behind it, because this will help the
marketer to reap benefits.
• The consumer’s response is influenced by the consumer’s psychology and
characteristics. These factors will influence the buying decision process. 6
 3.1 Consumer Buying Behaviour
Stimuli Consumer (black Buyer decision Post-decision
box) process process

• Marketing • Characteristics • Need • Purchase

• Product of consumers recognition choice
• Price • Cultural • Information • Product
• Place • Social search choice
• Promotion • Personal • Evaluation • Brand choice
• Environment • Consumer alternatives • Purchase
• Political psychology quantity
• Economical • Motivation • Dealer
• Social • Perception choice
• Learning • Purchase
• Technologica
• Values date and
l time
• Beliefs
• Payment
• Attitude
method
• Post-purchase
behaviour
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3.1 Consumer Buying Behaviour

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Specifying Market-oriented Business
Mission
Types Definition
Complex Buying Behaviour Consumer make complex decision
because they are unfamiliar with the
product or purchase the products
infrequently.
Dissonance-reducing Buying Consumers are highly involved in the
Behaviour purchase, but are not able to see key
differences among brand choices.
Habitual Buying Behaviour Consumers who buy frequently and
purchase low-cost items which require promotion strategies are means to
very little search and decisions efforts. increase sales.
E.g. soft drink, sweets, chocolates
Variety-seeking Buying Changing preference
Behaviour
Marketer Action
Marketer can enhance a product’s
strengths by providing more detailed
information can direct feedback
assistance.
Marketers can provide purchase
convenience and good customer
service to make the purchase
selection more appealing to
consumers.
Wide distribution, pricing, and sales
Pricing strategies and sales
promotions like sampling encourage
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product trials
3.2 Factors Affecting Consumer Buying
Behaviour
• A consumer’s buying behavior is influenced by his characteristics and
psychological factors.
• The consumer psychology includes motivation, perception, learning, beliefs
and attitudes. Marketers have no control over these factors, but they must
consider them when analyzing consumer buying behavior.
• Marketers need to understand the influencing factors to better understand
consumer purchase decision, their choice of products and services.

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3.2 Factors Affecting Consumer Buying
Behaviour

Cultural factors Culture, subculture, social class

Consumer Buying
Behaviour Reference group, Family, Roles
Social factors
and status

Age and life cycle stage,

Personal factors occupation, economic situation,
lifestyle, personality, self-concept

Motivation, Perception, Learning,

Psychological factors
Beliefs, Attitudes

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3.3 Consumer Buying Decision-making
Process

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3.3 Consumer Buying Decision-making
Process

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3.3 Consumer Buying Decision-making
Process
Need recognition
• Need is realized through:
 Internal stimuli: Customers may become aware of of the need due to
either physical or psychological factors, eg. Hunger or thirst. A young
adult needs tertiary education, elder looks for health supplement and
medication.
 External stimuli: A need can also be triggered by an advertisement on
television colour of an automobile, a brand name mentioned by a friend,
or the smell of perfume used by a friend. This is where marketers role
come into play.
• Marketer’s objective is to identify unfulfilled needs and to get customers to
recognize the imbalance between current and desired needs.

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3.3 Consumer Buying Decision-making
Process
Information Search
• An external search may include information from several sources:
 Personal sources, e.g. from family members, friends, neighbours,
acquaintances etc. These sources are the most effective. They tend to
legitimate or evaluate products for the buyer.
 Commercial sources, e.g. from advertising, sales persons, dealers, displays
etc. Normally, these sources inform the buyer of what the product is. It
provides product knowledge and creates an attraction to buy the products.
 Public sources, e.g. from mass media, customer-rating organisations who
provide information about the products.
 Experiential sources, e.g. from one’s own or others experiences in
handling, examining and using the products.

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3.3 Consumer Buying Decision-making
Process
Evaluation of Alternatives
• There are several measures involved in evaluating the alternatives:
 Benefit of product that customer can acquire by buying the products,
 Degree of importance of each benefit – a consumer may put up certain
weightage to a particular benefit,
 Brand beliefs as some customers go for brand image,
 Utility functions of the product, and
 Level of satisfaction that can be derived from the product.

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3.3 Consumer Buying Decision-making
Process
Purchase Choice
• At this stage, the consumer decides which product to but, or he/she may
decide not to buy the product at all. The consumer also decides on the
amount of purchase, the retailer and the salesperson to buy the product
from, the date and time to buy and also how to pay for the purchase.
• The consumer may quickly, especially if the product is on sale. Consumers
may also forgo the purchase if none of the options identified really meets
their needs and wants, or may postpone the purchase if more money needs
to be saved before buying.

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3.3 Consumer Buying Decision-making
Process
Post-purchase Behaviour

• If the perceived performance < buyer’s expectations →

dissatisfied buyer
• If the perceived performance = buyer’s expectations →
satisfied buyer
• If the perceived performance > buyer’s expectations →
delighted buyer

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3.4 Introduction to Business Buying
• Business buying
behavior involves
business buyers,
organizational and
consumer markets,
and buying centres.

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3.4 Introduction to Business Buying
• There are four main
categories of buyers
that are categorised as
business buyers. They
are producers,
resellers, governments
and institutions.

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3.4 Introduction to Business Buying
Characteristics Business Market Consumer Market
Number Few but large buyers Many but smalls buyers
Demand Derived from demand from Indivdiuals themselves
consumer market
Distribution structure More direct More indirect
Nature of buying unit More professional More personal
Type of decision and decision More people, complex and Small number, simpler and
process formalised informal
Use of reciprocity Yes No
Use of leasing Greater Lesser
Relationship More informal and closer More formal

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3.5 Factors Affecting Business Behaviour
Buying Centre

• The decision-making unit of a buying organization is known as the buying centre.

Dominant People Roles
Users People in the organization who actually use the product.
Gatekeepers Members who control the information flow in relation to
purchases. E.g. Secretary to manager
Influencers People who influence the buying decision by defining
specifications and providing information to evaluate available
product choices.
Deciders The person who has the formal and informal power to choose
the final vendors or brands.
Buyers Members who have formal authority to select the vendors
and negotiate the purchases. It could be anyone in the
organization, depending on the purchase situation.
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3.5 Factors Affecting Business Behaviour
Buying Situations

There are three types of behavior in business purchases.

• New purchase:
• When a company decides to develop new products, it requires raw materials and parts that have
never been purchased before. Therefore, the product is considered a new purchase for the
organization.
• Straight rebuy:
• The products are purchase regularly in a continous manner. Suppliers are either fixed for certain
period of time or there are a set of approved supplier. Sometomes because the purchases are
done on routine with fixed volume, the purchases are automated through a buying system.
• Modified rebuy:
• Products may have been purchased before but may have some changes to suit product
modification or product improvement. The change may include product technical specification,
design or volume.

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3.5 Factors Affecting Business Behaviour
Business buying behavior involves business buyers, organizational and consumer markets, and
buying centres.

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3.6 Business Buying Decision-making
process

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