A Brief Intro toA Brief Intro toConsumer MarketingConsumer Marketing

A Model of Buyer BehaviorA Model of Buyer Behavior

Buyer’s Characteristics

Buyer’sDecisionProcess

Buyer’s Decisions

Product choiceBrand choiceDealer choice

Purchase timingPurchase amount

Marketing Stimuli

The Four P’s

Other StimuliEconomic

TechnologyPoliticalCultural

Buyer’s Characteristics - Cultural

• Culture– most fundamental determinant of a person’s

wants and behavior.

• Subculture– nationalities, religions, racial groups, and

geographical regions.

• Social Class– income, occupation, education, & area of

residence.

Buyer’s Characteristics - Social

• Reference Groups– all groups having a direct or indirect influence

on person’s attitudes or behavior.

• Family– single most important consumer-buying

organization in society

– family of orientation vs. family of procreation.

• Roles & Statuses

Buyer’s Characteristics - Personal

• Age & Life Cycle Stage

• Occupation

• Economic Circumstances

• Lifestyle

• Personality & Self-Concept

Buyer’s Characteristics - Psychological

Motivation

• Biogenic needs– needs arising from physiological states of

tension such as hunger, thirst, discomfort.

• Psychogenic needs– needs arising from psychological states of

tension such as the need for recognition, esteem, or belonging.

Buyer’s Characteristics - Psychological

Perception

• The process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture of the world.

• Types of Selective Perception:– Selective Attention

– Selective Distortion

– Selective Retention

Buyer’s Characteristics - Psychological

• Learning– changes in an individual’s behavior arising

from experience.

• Beliefs– descriptive thoughts that a person holds

about some object/issue.

• Attitudes– relatively enduring un/favorable evaluations,

emotional feelings, and action tendencies toward some object/issue.

Psychographics According to VALS

• VALS: Values and Lifestyles Framework.

• Intended to yield insights into:– why people believe/behave as they do, and

– how internal values & attitudes are expressed externally.

• Primarily based upon consumers’ orientations and level of resources.

VALS Higher Resources Groups

• Actualizers– successful, sophisticated, active, “take-charge”

types– cultivated tastes for upscale, niche-oriented

products– generally status-oriented

• Achievers– successful, career/work oriented– prefer established, prestige products to impress

peers– status-oriented

VALS Higher Resources Groups• Fulfilleds

– mature, satisfied, comfortable, reflective– prefer durability, functionality, & value in products– principle oriented

• Experiencers– young, enthusiastic, impulsive, rebellious– high proportion of income spent on clothing, fast

food, music, movies, & video.– Action oriented

VALS Lower Resources Groups

• Believers– conservative, conventional, traditional– favor familiar products & established brands– principle oriented

• Strivers– uncertain, insecure, approval-seeking– prefer stylish products to emulate purchases of

those with greater resources– status oriented

VALS Lower Resources Groups• Makers

– practical, self-sufficient, traditional, family-oriented.– Prefer practical, functional products– action oriented

• Strugglers– typically elderly, resigned, passive, concerned– cautious consumers who are loyal to favorite brands– status oriented

Types of Buying Behavior

• Significant Differences Between Brands– High involvement: complex buying behavior

– Low involvement: variety-seeking buying behavior

• Few Differences Between Brands– High involvement: dissonance-reducing

behavior

– Low involvement: habitual buying behavior

Consumer Purchase Decision Process

1. Problem Recognition

2. Information Search

3. Evaluation of Alternatives

4. Purchase Decision

5. Postpurchase Behavior

A Brief IntroBusiness-to-Business

(B2B) Marketing

• Those activities that facilitate exchanges involving products and customers in business markets

• A business transaction between– a professional seller (representing a selling company)

and

– a professional buyer (representing a buying company)

• Activities in which goods or services are sold for any use other than personal consumption

• Note: It is notnot the nature of the product; it is

the nature of the transactiontransaction.

What Is Business Marketing?

B2B versus B2C MarketingCharacteristic B2B Market B2C Market

Sales volume Greater Smaller

Purchase volume Greater Smaller

Number of buyers Fewer Many

Size of individual buyers Larger Smaller

Location of buyers Concentrated Diffuse

Buyer-seller relationship Closer More Impersonal

Nature of channel More direct Less direct

Buying influences Multiple Single/Multiple

Type of negotiations More complex Simpler

Use of reciprocity Yes No

Use of leasing Greater Less

Key promotion method Personal Selling Advertising

• Derived Demand

• Inelastic Demand

• Fluctuating Demand

• Joint Demand

Characteristics of Business Demand

–“Derived demand” says that demand for a business product is linked to demand for a consumer good.

• This means consumer demand affects business marketing up a vast network of channels.

Classifying Business Goods & Services

3 Main Categories of ProductsEntering Goods

Become part of the finished productCost assigned to the manufacturing process

Foundation GoodsCapital ItemsTypically depreciated over time

Facilitating ProductsSupport organizational operationsHandled as overhead expenses

Classifying Business Goods & Services

Entering Goods Raw Materials

Farm products & natural productsOnly processed as necessary for handling & transportRequire extensive processing

Manufactured Materials & PartsAny product that has undergone extensive processing

prior to purchaseComponent Materials require additional processingComponent Parts generally do not require additional

processing

Classifying Business Goods & Services

Foundation GoodsInstallations

Major long-term investment itemsBuildings, land, fixed equipment, etc.

Accessory EquipmentLess expensive & short-livedNot considered part of fixed plantPortable tools, PC’s, etc.

Classifying Business Goods & Services

Facilitating ProductsSupplies

Any supplies necessary to maintain the organization’s operations

ServicesMaintenance & Repair supportAdvisory supportLogistical support

Categories of B2B Customers

• Commercial enterprises–Indirect channel members and

facilitators

–OEMs (original equipment manufacturers)

–Users = customers

• Governmental organizations

• Institutions

Major Uses of B2B Products

For additional production (e.g., components are combined into subassemblies and become part of the finished product)

For use in operations, but not part of the finished product

For resale

Steps in the Business Buying Process

1. Recognizing the need

2. Developing product specifications

3. Soliciting bids from potential suppliers

4. Making the purchase decision

5. Issuing the contract

6. Inspecting delivered goods for quality

7. Evaluating vendor performance

Types of Business Buying Situations• New-task buy:

– Business buying situation that is new and very different from anything that the buyer has faced previously.

• Straight rebuy:– Most common type of business buying situation; buyer

purchases a part, material, or service routinely, with little thought going into buying process.

• Modified rebuy:– Reevaluation of alternatives; necessary because buying

requirements have changed such that relatively routine buy or purchase no longer is routine.

Examples of Products Purchased Using the Buy-Class

Pureroutine

Completenegotiation

StraightRebuy

ModifiedRebuy

NewBuy

ElectricityGas/Water

OfficeSupplies

BulkChemicals

Vehicles ConsultingServices

ElectricalComponents

ComputerSystems

Installations

Moon ShotInsurance

Insurance for the Apollo 11 Moonshot

Buygrid Analysis Framework

StraightStraight RebuyRebuy

ModifiedModified RebuyRebuy

NewNewBuyBuy

Need RecognitionNeed Recognition

Develop Product SpecificationsDevelop Product Specifications

Solicit BidsSolicit Bids

Make Purchase DecisionMake Purchase Decision

Issue the ContractIssue the Contract

Inspect Goods for QualityInspect Goods for Quality

Evaluate Vendor PerformanceEvaluate Vendor Performance

Complexity of Complexity of Buying SituationBuying Situation

Buygrid Analysis Framework

StraightStraight RebuyRebuy

ModifiedModified RebuyRebuy

NewNewBuyBuy

Need RecognitionNeed Recognition

Develop Product SpecificationsDevelop Product Specifications

Solicit BidsSolicit Bids

Make Purchase DecisionMake Purchase Decision

Issue the ContractIssue the Contract

Inspect Goods for QualityInspect Goods for Quality

Evaluate Vendor PerformanceEvaluate Vendor Performance

CreepingCreepingCommitmentCommitment