Consumer and

Organizational Buying
Behaviour

UCD Michael Smurfit Scoil Ghnó

School of Business Michael Smurfit UCD
Introduction

• What is consumer behaviour

• Influences on consumer behaviour
• Consumer Decision Making Process
• Levels of Involvement and decision making
• Impact of Digital on Decision Making
• Influence Model
• Organizational Buyer Behaviour
• Buy Phases and Business Decision Making
Process
• Influences on Business Decision Making
Every Company…

… wants to attract, retain, and

develop highly committed customers
who not only make repeat
purchases and generate continual
revenue streams, but also require
minimal maintenance along the way.

Marketing is the “science and art of

finding, retaining and growing
profitable customers” (Kottler
2015)
Understanding Consumers

The explosion of digital technologies over the past decade

has created “empowered” consumers so expert in their use of
tools and information that they can call the shots,
hunting down what they want when they want it and getting
it delivered to their doorsteps at a rock-bottom price.

Edelman & Singer 2015

Chapter 7 - Creating Advantage, Synergy and Strategic Philosophies PPT 7-4

 5

Understanding Consumers

Who is
important?

What are
How do their choice
they buy? criteria?

Customers

Where do When do
they buy? they buy?
Defining Consumer Behaviour

• “Individuals or groups selecting, acquiring,

using, and disposing of products, services,
ideas or experiences”.
• Process: Acquisition, Use, Disposal
• What is consumed: products, services,
experiences.
• Who consumes: Individuals, groups, influences
on decisions.
Influences on Consumers

Consumer as individual
Perception, learning and memory,
attitudes, personality and the self

Consumer as decision maker

Selecting, deciding, using, disposing

Consumer as part of a whole

Group influences, culture, subcultures, lifestyles
 Consumer decision-making process

Problem
recognition

Information
search

Evaluation of
alternatives
Product choice

Outcomes
 Types of consumer decisions

Routine Extensive
Problem Problem
Solving Limited Pbl Solving Solving
Continuum of consumer buying decisions

Routine Limited Extensive

Involvement Low Low to High

moderate
Time Short Short to Long
moderate
Costs Low Low to High
moderate
Information Internal only Mostly internal Internal and
search external
Number of One Few Many
alternatives
CHOICE Low High Ego
DECISION Involvement Involvement Expressive

Decision Know-Do-Feel Know-Feel-Do Feel-Do-Know

Sequence

Process Stock Depletion gap- actual- Impulse, Felt

Trigger desired end Need
state
Search Passive Active Bias to
Confirm
Expectations
Evaluation Limited/None Rational Rationalizing
of
Alternatives
Choice “Buy the “Buy the Best” “Buy What I
Heuristic Familiar” Like” or “Go
for Something
Different”
MARKETING Low High Ego
IMPLICATIONS Involvement Involvement Expressive

Marketing's Product Provision of Clear &

Role in Availability Information Relevant
Affecting
Purchase
Articulation
of Brand
Image
Central Threat Saliency and Better Change in
to Purchase Interrupts Performing Self or
Continuity
Alternative Brand
Image
Impact of Online on Decision Making
and Use
Evaluate

Ofek 2012
Influence on CDM

• Prime Energy
• Prime explosive popularity
 Influence Model
• Simonson and Rosen (2014)
• Living in an age of “near perfect information“ that potentially spells “twilight for
brands”
• Looking at impact of information from others on decisions i.e. info search on CDM
• Search, Experience, and Credence Goods
• A person’s decisions to buy is affected by a mix of three interrelated sources:
• The individual’s prior preferences, beliefs, and experiences (P)
• Others. Other people and information sources (O)
• Marketers (M)
• An age where information from others (O) – such as expert reviewers and
customer reviewers can be more trusted by consumers.
• In contrast- messages from marketers (M) are suspect because the marketers
have a vested interest that others do not.
• “….Simonson and Rosen (2014) – consumers are often fine with getting basic
information from brands; they trust marketers when it comes to specifications,
colours, availability, or special deals…but when it comes to assessment of the
quality of the product, marketers are not seen as objective as experts or as other
consumers. “
• Not for all products but are categories or products that have a high O influence
(info from others) (have a continuum from fmcgs (little O) to services, cars and
electronics (high O))
 M-Marketer

O-Other Choice P- prior

Consumer Experience

C- Competitor
Influence
• Reviews from users, expert opinions, price comparison tools.

• O is regarded as the most useful information source as the opinions

from O are perceived to be more credible, and M is not always trusted.

• O is plentiful (hotel reviews/amazon), filled with diverse content, some

of which is likely to be written by someone the consumer will see as
representative of them.

• O contributors are users of every experience level from beginner to

expert.

• The lived experience of a real person is a more accurate predictor of

how I will feel about the product, than the content of marketing
promotion, which shows an idealised or perfect (unrealistic)
experience.

• Digital connectivity and consumer publishing power is accelerating and

amplifying the power of O.
• M - Low trust because of the vested interest. Also a legacy of years
of advertising exaggeration
 Influence: Factors Affecting Influence of
O
• Decision Importance (laptop V’s litre of milk)

• Importance of Product Quality / Differentiation ( Wine v’s Paper

Clips)

• Degree of Risk or Uncertainty (financial etc)

• Rate of Change in Product Category (technology - smartphones)

• Category lifecycle stage - (how new is the category - does it have

well established quality cues and criteria)

• Usefulness of O (someone’s experience with a printer, v’s

experience with a fashion item - their experience may not be
transferable) / trustworthiness of O - issues of fake reviews
https://www.youtube.com/watch?v=Mq_Ksga9uHY&t=833s

• Public Consumption (social risk)

Role of Influence: Change to the role of
Marketer
• Role of Marketer now includes:
• Stimulating “O”
– Active ongoing PR programme (e.g. Casper)
– Provide Product samples to key influencers
– Develop affiliate relationships
• Manage Existing “O”
– Capture and present reviews
– Highlight favourable O
– Incorporate O into M (e.g. Bose has done this in print
ads with reviews from Business Week and Wired;
Casper incorporation of customer reviews in ads)
• Address unfavourable “O”
– Negative reviews on manufacturers or service
providers website can suggest possible resolutions
such as a call to customer support.
Role of Influence: Marketer Other required
actions in “O” relevant information environments

(A) Employ Google Analytics (or similar services) to

understand consumer information search
• e.g. Important keywords used, clickstream analysis

(B) Do regular sentiment checks:

• Searches on
• “Best (Category)”
• “Company/Product reviews”
• “Competitor(s)/Product Reviews”
• “Youtube searches- etc”
Business to Business Decision Making: Customer
Types
Private Consumers Organisational Customers

Purchase: Purchase:

➢ For personal or household use ➢ For use in the operation of a

business or organisation.
➢ To manufacture other products
➢ For resale to others

CONSUMER ORGANISATIONAL
PRODUCT PRODUCT
Business vs. Consumer Markets

Characteristic Business Markets Consumer

Markets
Demand Organizational Individual
Volume Larger Smaller
# of customers Fewer Many
Location Concentrated Dispersed
Nature of Buy More Professional More Personal

Buy Influence Multiple Single

Types of More Complex Simpler
Decisions
Decision-Making Longer Shorter
Time
Promotion Personal Selling Advertising
A model of Business Buyer Behaviour

The Environment The Buying Organization Buyer Responses

Other Product or service
Mkt Strat Stimuli
choice
Economic The Buying Centre
Product supplier choice
Technological Decision
price order quantities
Political Process
place delivery terms and time
cultural Interpersonal and
promotion service terms
individual influences
competitive
payment

(Organizational Influences)
 Buyer Behaviour

Buying Situations

Decision Process
Aspects of
Business
Buying
Behavior
Group Buying
 Purchase Context – Buying Situations

A situation requiring the purchase

New Buy of a product for the first time.

Modified A situation where the purchaser wants

some change in the original good or
Rebuy service.

A situation in which the purchaser

Straight reorders the same goods or services
Rebuy without looking for new information or
investigating other suppliers.
Business Buying Process
1. Problem Recognition- Beginning of process.
Recognise a problem or need and think of a
possible solution.
Does marketing have any role here?
2. General Need Description-describe
characteristics and quantity of needed item. Can
be complex with others involved. Describe
attributes- e.g. Price reliability etc.
3. Product Specification- Decide on and specify
the best technical product characteristics for a
needed item.
4. Supplier Search- Buyer trying to find best
vendor. Internal and external search. Role of
marketing?
 Business Buying Process

5. Proposal Solicitation- Invites qualified suppliers

to submit proposals- what do you need to know?
(DMU, Bens, roles)
6. Supplier Selection- Review proposals and select a
supplier. Key supplier attributes.
7. Order Routine Specification- final order with
tech specs, quantity, delivery time etc.
8. Performance Review- decide upon satisfaction,
decide to keep modify or drop.
Business Buying Process and Buy Class

Stages of the Buying Process New Modify Straight

task rebuy rebuy
1. Problem Recognition Yes Maybe No
2. General Need Description Yes Maybe No
3. Product Specification Yes Yes Yes
4. Supplier Search Yes Maybe No
5. Proposal Solicitation Yes Maybe No
6. Supplier Selection Yes Maybe No
7. Order Routine Specification Yes Maybe No
8. Performance Review Yes Maybe No
Group Decision Making

Conditions for Joint Decision Making

• High value

• High essentiality

• Novelty Gronhaug

• Complexity

• Larger Organisations
Purchases in Organisations

• Buying Centre

• Buying Task Group

• Decision Making Unit

• Buying Group

• Comprises all those individuals who have an

influence on a buying decision

• Not necessarily a formal or face to face group

 Group Decision Making

Initiators of
process Technical
e.g. line Users Influencers experts,
workers advisors
Decision
Making
Gatekeepers Unit Buyers
Secretaries, PAs Purchasing
technical personnel managers
Deciders
Purchasing directors &
senior management
 Conclusion

• Critical to understand, who, when, what, why,

and how consumers purchase/consume
• Important to understand consumers’ needs,
information-search behaviors, evaluation
criteria, and decision making processes
• CB information critical for the design of
marketing strategies and campaigns
• Understanding of Buyer decision making
process and who has what influence on it

1-33
 LECTURE 2
Appendix (for your own additional
information)
The Blackbox Model
Buyer Characteristics

Consumer behaviour
is the study of how
individuals, groups,
and organizations,
select, buy, use, and
dispose of goods,
services, ideas, or
experiences to satisfy
their needs and
wants.
Cultural Factors

Culture, subculture, and social

class are particularly important
influences on consumer buying
behavior.

Culture is the fundamental

determinant of a person’s
wants and behaviors.
Sub-Cultures

• Each culture consists of smaller subcultures that

provide more specific identification and
socialization for their members.

• Subcultures include nationalities, religions,

racial groups, and geographic regions.

• Multicultural marketing grew out of careful

marketing research, which revealed that different
ethnic and demographic niches did not always
respond favorably to mass marketing.
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 Social Classes

Social classes differ in dress, speech patterns, recreational

preferences, and many other characteristics.

People are perceived as occupying inferior or superior positions

according to social class.

Social class is indicated by a cluster of variables—for example,

occupation, income, wealth, education, and value orientation—
rather than by any single variable.

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 Reference Groups

A person’s reference groups are all the groups

that have a direct (face-to-face) or indirect
influence on their attitudes or behavior.

Groups having a direct influence are called

membership groups.

Some membership groups are primary

groups such as family, friends, neighbors,
and co-workers with whom the person
interacts fairly continuously and informally.

Some membership groups are secondary

groups such as religious, professional groups
that tend to be more formal.

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“Tribes online” – people connect around
ideas!

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 Family

The family is the most important

consumer-buying organization in
society

Family members constitute the most

influential primary reference group.

There are two families in the buyer’s

life:
• The family of orientation
consists of parents and siblings.

• A more direct influence on

everyday buying behavior is the
family of procreation—namely,
the person’s spouse and children.

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Age and Stage in Life Cycle

• People’s taste in food, clothes, furniture, and

recreation is often related to our age.

• Consumption is also shaped by the family-life cycle

and the number, age, and gender, of people in the
household at any point in time.

• In addition, psychological life-cycles may matter.

• Marketers should also consider critical life events or

transitions as giving rise to new needs.
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Personality and Self-Concept

• Each person has personality characteristics that

influence his or her buying behavior.

• Definition of Personality: A set of distinguishing human

psychological traits that lead to relatively consistent
and enduring responses to environmental stimuli.

• Brands also have personalities, and consumers are

likely to choose brands whose personalities match
their own.

• We define brand personality as the specific mix of

human traits that we can attribute to a particular
brand.
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Brand Personalities: Jennifer Aaker
1. Sincerity (down-to-earth, honest, wholesome,
and cheerful) - Hello Kitty

2. Excitement (daring, spirited, imaginative, and

up-to-date) - MTV

3. Competence (reliable, intelligent, and

successful) - Samsung

4. Sophistication (upper-class and charming)

- Shiseido

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Brand Personalities: Jennifer Aaker
5. Ruggedness (outdoorsy and tough)
- Timberland

6. Passion (emotional intensity,

spirituality, and mysticism)
- Zara

5. Peacefulness (harmony, balance,

and natural)
- Yamaha

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Self-Concept

• Consumers often choose and use brands with a

brand personality consistent with their actual
self-concept (how we view ourselves).

• Although in some cases, the match may instead

be based on the consumer’s ideal self-concept
(how we would like to view ourselves).

• Other's self-concept (how we think others see

us).

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Lifestyles and Values

People from the same subculture,

social class, and occupation may
lead quite different lifestyles.

A lifestyle is a person’s pattern of

living in the world as expressed in
activities, interests, and opinions.

Lifestyle portrays the “whole

person” interacting with his or her
environment.
Marketing and Lifestyles

• Marketers search for relationships between their

products and lifestyle groups.

• For example, a computer manufacturer might find that

most computer buyers are achievement oriented.

• The marketer may then aim the brand more clearly at

the achiever lifestyle.

• Marketers are always uncovering new trends in

consumer lifestyles.
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Core Values

• Consumer decisions are also influenced by core

values, the belief systems that underlie consumer
attitudes and behaviours.

• Core values go much deeper than behaviour or

attitude, and determine, at a basic level, people’s
choices and desires over the long-term.

• Marketers who target consumers on the basis of

their values believe that by appealing to people’s
inner selves, it is possible to influence their outer
selves—their purchase behavior.
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Core Values
Motivations

We all have many needs at any given time.

Some needs are:

a. Biogenic (arise from physiological states of tension such as

hunger).

b. Others are psychogenic and arise from a need for recognition,

esteem, or belonging.

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Motivations

A need becomes a motive when it

is aroused to a sufficient level of
intensity to drive us to act.

• Motivation has both

direction—we select one goal
over another—and intensity—
we pursue the goal with more
or less vigor.

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 Motivations

Motivation researchers often conduct “in-depth interviews”

with consumers to uncover deeper motives triggered by a
product.

Projective techniques such as word association, sentence

completion, picture interpretation, and role-playing are
used.

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Motivations: Example

• In collectivistic societies like Asia, it is debatable whether self-

actualization is applicable to Asian consumers.

• Needs may be socially directed instead, given the strong desire of

Asians to enhance their image and position through contributions to
society.

• Socially directed needs considered the most important for Asians:

– Affiliation
– Admiration
– Status

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Emotions

• Consumer response is not all cognitive and

rational; much may be emotional and invoke
different kinds of feelings.

• A brand or product may make a consumer feel

proud, excited, or confident (see slides on STP
for more).

• An ad may create feelings of amusement,

disgust, or wonder.

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 Beliefs and Attitudes

Through experience and learning, people acquire beliefs and

attitudes. These in turn influence buying behavior.

• Belief—a descriptive thought that a person holds about

something.

• Attitude—a person’s enduring favorable or unfavorable

evaluation, emotional feeling, and action tendencies toward
some object or idea.

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 Attitudes

• Attitudes put people into a frame of mind: liking or disliking an object,

moving toward or away from it.

• Attitudes lead people to behave in a fairly consistent way toward similar

objects.

• Because attitudes economize on energy and thought, they can be very

difficult to change.

• A company is well-advised to fit its product into existing attitudes

rather than to try to change attitudes.

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