Chapter four

Understanding Consumer and

Organizational Buyer Behaviour

lecturer : Daroon Abdulla1

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Objectives
 To define customer behaviour

 To examine dimensions of customer behaviour (–

who? how? what?) in consumer and business
markets

 To examine influences on behaviour of consumers

and business buyers

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 Consumer markets

 Consumer market is defined as all the

individuals and households who buy
or acquire goods and services for
personal consumption.

 The world consumer market consists

of approx 6.3 billion people
 the billion people in North America,
Western Europe and Japan make up 70%
of the world’s spending power.

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 ?What is consumer behaviour

 The study of the processes involved when individuals or

groups select, purchase, use or dispose of products,
services, ideas or experiences to satisfy needs and
desires.
Solomon, Bamossy, Askegaard and Hogg
(2006)

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 Understanding consumers

WHO is involved in buying

and consuming?

HOW do they use WHAT are their choice

The product? Criteria?

Customers

WHEN do they buy/use

WHERE do they buy?
the product?

WHY do they buy/use

The product?

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?Who buys
Other people often influence consumers’ purchase decision. The marketer
needs to know which people are involved in the buying decision and what role
each person plays, so that marketing strategies can also be aimed at these
people:
 Initiator
begins the process of considering a purchase.

 Influencer
attempts to persuade the others in the group.

 Decider
has power/financial authority.

 Buyer
conducts the transaction.

 User
actually uses/consumes the product.

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 ?How do they buy

Consumer buying decision process

Problem
Information Evaluation of Post-purchase
recognition Purchase
search alternatives evaluation

Feedback

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?Step 1: What’s My Problem
 Problem recognition occurs whenever a consumer
recognizes a difference between the current state
and the ideal or desired state

 Internal cues

 External cues

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Problem recognition

Self/Personal

Social

Physical

Maslow’s Hierarchy of Needs 9

Step 2: What Information Is There
?About Alternative Solutions
 Personal experience

 Knowledge

 Websites

 Friends

 Advertising

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 Step 3: How Do I Evaluate All The
Options?
 Identify consideration set

 Narrow list and compare pros and cons

 Use evaluative criteria to decide among remaining choices

o Main evaluation criteria
 Price
 Ease of use
 Performance
 Style

o Salience: the level of importance a buyer assigns to each criterion for

comparing products

o Awareness set: the group of brands that may provide solution to a consumer’s
problem.

o Reduce the awareness set to a smaller set of brands for serious consideration:
evoked set

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 ?What are the choice criteria
Evaluating alternatives

Social
Technical Status
Reliability Social belonging
Durability professional groups
Performance Fashion
Style/looks
Comfort
Delivery
Convenience
Taste
Personal
Economic Self-image
Price Risk reduction
Value for money Morals
Running costs Emotions
Life style costs

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Step 4: How Do I Make a Final
?Choice
 Heuristics represent ‘rules of thumb’
 Brand loyalty
 Country of origin
 Liking

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?Step 5: How Good A Choice Was It
 Post-purchase evaluation results in a level of consumer
dissatisfaction/satisfaction which is determined by the overall
feelings or attitude a person has about a product after
purchasing and using it.

Influences future behaviour and can result in:

 satisfaction
- repeat purchase

 dissatisfaction
- complain to the company
- complain to family, friends and third parties

 cognitive dissonance:
buyer discomfort caused by post-purchase conflict

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 The Business Marketplace
Total Business Market

Producers Resellers Organisations

Fishing, agricultural and Government,

Wholesalers and Distributors
lumber industries county and local units

Manufacturers of consumer
Retailers Not-for profit institutions,
goods and component parts
including organisations with
education, charity, community
Service, including financial, and other public service goals
Transportation, restaurants,
hotels, health care
and entertainment etc.
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Characteristics of Business Markets
 Fewer, larger buyers

 Close supplier-customer relationships

 Professional purchasing

 Customised products

 Inelastic demand

 Fluctuating demand

 Geographically concentrated buyers

 Direct purchasing

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Organisational Vs. Consumer Buying
Dimension Organisational Buying
Product More technical; greater
quantity; focus on service
offered with product
Price Freq. competitive bidding; list
prices on standard items
Promotion Rely on information from
salepeople and trade magazines
Distribution Short distribution channels;
often purchased directly from
manufacturers
Systems Some automated and
integrated
Customer More enduring; focus on
relations establishing relationships
Buying Involves more people with
decision diverse needs; usually more
process structured process
Consumer Buying
Less technical, more
standardised; smaller
quantities
Generally buy on basis of list
price
Relatively greater reliance on
advertising/mass communicn
Longer distribution channels;
most frequently purchased
from retailers/mail order
Some automated, rarely
integrated
Often transaction-based and
quite simple; long-term
relationship seldom formed
Involves fewer people; process
is rarely structured
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