11/3/2022

CHAPTER 5: CONSUMER
MARKET AND BUYER
BEHAVIOUR
THU NGUYEN

- TOTAL MARKET STRATEGY: many companies use ethnically specific themes bc mkters realized the insights gleanedd from ethnic consumers can influence
their broader markets

LEARNING OBJECTIVES
LO1: Define the consumer market and construct a simple model of
consumer buyer behavior
LO2: Name the four major factors that influence consumer buyer
behavior
LO3: List and define the major types of buying decision behavior and the
stages in the buyer decision process
LO4: Describe the adoption and diffusion process for new products

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SUMMARY
LO1: Define the consumer market and construct a simple model of consumer buyer
behavior.
• The consumer market consists of all the individuals and households that buy or acquire
goods and services for personal consumption.

to attract the targeted consumers

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SUMMARY
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LO2:e Name the four major factors that influence consumer buyer behavior
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• Consumer
a buyer behavior is influenced by four key sets of buyer characteristics: cultural,
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social,
i personal, and psychological. The buyer characteristics can be useful in identifying
o
interested
r buyers and shaping products and appeals to serve consumer needs better.
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4 for the most
i part, mkters cannot control such factors, but they must take them into account
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 mkters are always trying to spot CULTURAL SHIFTS so as to discover new products that might be wanted 11/3/2022
- CULTURE is the most basic determinant of a person's wants n behavior

SUMMARY
LO2: Name the four major factors that influence consumer buyer behavior (cont.)

incl. nationalities,
religions, racial groups
, geographic regions Cultural Factors

Subculture mkter are interested in

Culture A group of people with shared Social class (similar buying behavior)
tend to show more brand The set of basic values, value systems based on Relatively permanent and
loyalty n makes
perceptions, common life ordered divisions in a society show distinct product
shopping a family event, experiences and situations.
w/ children having a big wants, and behaviors whose members n brand preferences
say in the purchase learned by a member of Hispanic American share similar values, in areas such as
clothing n travel
decision society from family and other Consumers interests, and
important institutions African American Consumers behaviors.
one of the fastest
growing US popluation Asian American Consumers measures as a combination of occupation,
subsegments n are distinct but not necessarily mutually exclusive
income, education, wealth n other variables
expected to surge to
nearly one third of the
AFRICAN:
total altho more
US popluation by price-conscious, but tend to be strongly motivated by quality n selection, n give importance to brands
ASIAN: most affluent segment, are expected to have an annual buying power approaching 1 trillion by 2017; most brand conscious, extremely brand loyal, shop frequently
2030
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BUZZ MKT involves enlisting or even creating opinion leaders to serve as "BRAND AMBASSADORS"
- BRAND EVANGELISTS are ambassadors who enthusiastically share their passion for a company's products w/ large circles of friends n accquaintances

SUMMARY
LO2: Name the four major factors that influence consumer buyer behavior (cont.)
membership groups are
groups in which a person
belongs, while reference
groups serve as direct
points of comparison Social Factors

aspirational group is one to

which the indi wishes to
belong (a young basketball
player hopes to someday
emulate basketball star
LeBron James n play in the
NBA)
mkters try to identify the
opinion leader n aim their
mkt efforts towards this
person. it can be called "
INFLUENTIALS OR
LEADING ADOPTERS"
Groups and Social
Networks Roles and status
most importance consumer buying
Membership groups org in society
A role consists of the
activities people are expected
Reference groups Family
to perform according to the
Husband–wife involvement
Aspirational group people around them.
Children
Word-of-mouth influence Each role carries a status
reflecting the general esteem
Opinion leader a person belongs to many groups
given to it by society.
beside the family, clubs, org, online
Online social networks communities

are online communities (blogs, social networking sites, virtual worlds..); interactive w/ media content

mkters are working to harness the power of these new social networks n other "word-of-web" opportunities to promote their products n build closer customer
6 relationships

6 are influenced by reference groups to which they do not belong

ppl often

mkters try to identify the reference groups of their target markets. REFERENCE GROUPS expose a person to new behaviors n lifestyles, influence the person's attitudes n
self-concept, n create pressures to conform that may affect the person's products n brand choices

REference group: eg: a shoe manufacturing company uses ads featuring the members of a country music band w/ the hope that the fan will see them wearing the
company's shoe n hence purchase the same brand of shoes 3
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Independent bloggers are self-made influencers. Traits that make them relevant to marketers include GOOD FIT W/ THE BRAND

SUMMARY
LO2: Name the four major factors that influence consumer buyer behavior (cont.)

Personal Factors

45.Life-stage segmentation
allows marketers to create Lifestyle
targeted, actionable, and
PERSONALIZED campaigns A person’s pattern of
living as expressed Personality and
based on how people consume
and interact with brands in his or her Self-Concept
activities (work, Personality refers to
Age and Life Stage the unique
People change the hobbies, shopping,
Economic sports, social psychological
Occupation goods and services characteristics that
Situation events), interests
they buy over their distinguish a person
lifetimes (food, fashion,
family, recreation), or group
and opinions (about Brand personality
themselves, social
issues, business,
products)

brands also have personalities. A BRAND PERSONALITY is the mix of human traits that may be used to describe the brand
7 !! 5 brand personality traits: sincerity, excitement, competence, sophistication, ruggedness

SUMMARY
LO2: Name the four major factors that influence consumer buyer behavior (cont.)

Psychological Factors

Perception is the
process by which Attitude
people select, A person’s
Motive (drive) organize, and Learning Belief consistently
A need that is interpret information Changes in an A descriptive favorable or
sufficiently pressing to form a meaningful individual’s behavior thought that a unfavorable
to direct the person picture of the world. arising from person holds evaluations,
to seek satisfaction. Selective attention, experience. about something. feelings, and
selective distortion, tendencies toward
and selective an object or idea
retention difficult to change

MASLOW'S HIERARCHY OF NEEDS categorizes needs into a pyramid, consisting of psychological needs, safety needs, social needs, esteem needs and
8 self- actualization needs

a DRIVE is a strong stimulus that calls for action

CUES are minor stimuli that determine how a person responds

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many mkters use such touchy-felly approaches, now sometimes called INTERPRETIVE CONSUMER RESEARCH

SUMMARY
LO2: Name the four major factors that influence consumer buyer behavior (cont.)
• Motive (drive)

A person tries to satisfy the most

important need first. When that
need is satisfied, it will stop being a
motivator, and the person will then
try to satisfy the next most
important need

SELECTIVE ATTENTION- the tendency for ppl to sreen out most the in4 to which they are exposed - means that mkters must work especially hard to attract the
consumer's attention 9
SELECTIVE DISTORTION - the tendency of ppl to interprete in4 in a way that will support what they already believe

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SELECTIVE RETENTION -the consumers are likely to remember good points made abt a brand they favor n forget good points made about competing brands

SUMMARY
LO3: List and define the major types of buying decision behavior and the stages in the
buyer decision process

expensive, risky, infrequently ppurchased, self expressive

low cost, frequently purchased product

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43.Consumer information provider Nielsen uses a life-stage segmentation system that places U.S. households into one of 66 different life-stage groups. According to
Nielsen's groups, YOUNG ACHIEVERS refers to the group consisting of hip, single twenty-somethings who are politically liberal, listen to alternative music, and enjoy
lively nightlife

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SUMMARY
LO3: List and define the major types of buying decision behavior and the stages in the
buyer decision process (cont.)
High involvement Low involvement
Complex Buying Behavior Variety-Seeking Buying Behavior
Marketers need to help buyers learn about product-class The marketing strategy may differ for the market leader
attributes and their relative importance. They need to and minor brands. The market leader will try to encourage
Significant differentiate their brand’s features, perhaps by describing and habitual buying behavior by dominating shelf space, keeping
illustrating the brand’s benefits through printed promotional shelves fully stocked, and running frequent reminder advertising.
differences materials or in-depth online information and videos. They must Challenger firms will encourage variety seeking by offering
between motivate store salespeople and the buyer’s acquaintances to lower prices, special deals, coupons, free samples, and
brands influence the final brand choice advertising that presents reasons for trying something new.
buying cookies, buyers will choose a cookie brand w/o much eva -> eva that
brand during consumption. but the next time, the consumer might pick
another brand out of boredom or simply to try sth different ---> brand
Types of buying
behavior
switching occurs for the sake of variety rather than bc of dissatisfaction.

Few Dissonance-Reducing Buying Behavior

differences After the purchase, consumers might experience postpurchase
dissonance (after-sale discomfort) when they notice certain
between
disadvantages of the purchased brand or hear favorable things
brands about brands not purchased.
To counter the dissonance, the marketer’s
after-sale communications should provide evidence and
support to help consumers feel good about their brand choices
Habitual Buying Behavior
Marketers add product features or enhancements to
differentiate their brands from the rest of the pack and raise
involvement
repetition of advertisements can create brand familiarity (but not
conviction), which can lead to habitual purchases

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12 eg: consumers buying carpeting: carpeting is expensive, self-expressive -> high involvement
most carpet brands have the same price -> buyers buy what is available n relatively quickly

SUMMARY
LO3: List and define the major types of buying decision behavior and the stages in the
buyer decision process (cont.)
Decision making process

Need Information Evaluation of Purchase Postpurchase

recognition search alternatives decision behavior

Internal stimuli Personal sources (family,
External stimuli friends, neighbors,
acquaintances), commercial
sources (advertising,
salespeople, dealer and
manufacturer web and mobile
sites, packaging, displays),
public sources (mass media,
consumer rating organizations,
social media, online searches
and peer reviews), and
experiential sources (examining
and using the product)
Two factors can come
uses in4 to evaluate
between the purchase
alternative brands in
the choice set intention and the purchase
decision:
Factor is the attitudes of
others
Unexpected situational
factors
which brand???
Satisfy or dissatisfy?
The answer lies in the
relationship
between the consumer’s
expectations and the
product’s perceived
performance
Cognitive dissonance:
discomfort caused by
postpurchase
conflict
consumer's expectations
vs. perceived performance

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SUMMARY
LO4: Describe the adoption and diffusion process for new products
• The product adoption process as the mental process through which an individual passes
from first learning about an innovation to final adoption.

Awareness Interest Evaluation Trial Adoption

The consumer The consumer The consumer The consumer The consumer
becomes aware seeks considers tries the new decides to make
of the new information whether trying product on a full and regular
product but lacks about the new the new product small scale to use of the new
information product makes sense improve his or product.
about it. her estimate
of its value.

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SUMMARY
LO4: Describe the adoption and diffusion process for new products
They are skeptical— They are tradition bound—
they adopt an they are suspicious of
innovation only after a changes and adopt the
majority of people innovation only when it has
have tried it become something of a
tradition itself

They are They are opinion They are deliberate—

venturesome leaders in their although they rarely
—they try new communities and are leaders, they adopt
ideas at some adopt new ideas new ideas before the
risk early but carefully average person

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SUMMARY
LO4: Describe the adoption and diffusion process for new products (cont.)
• Five characteristics are especially important in influencing an innovation’s rate of
adoption:
o Relative advantage: The degree to which the innovation appears superior to existing
products
o Compatibility: The degree to which the innovation fits the values and experiences of
potential consumers.
o Complexity: The degree to which the innovation is difficult to understand or use.
o Divisibility: The degree to which the innovation may be tried on a limited basis.
o Communicability: The degree to which the results of using the innovation can be
observed or described to others.

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CHAPTER 6: BUSINESS
MARKET AND BUSINESS
BUYER BEHAVIOUR
THU NGUYEN
BUSINESS BUYER BEHAVIOR: The buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold,
rented, or supplied to others.
BUSINESS BUYING PROCESS: The decision process by which business buyers determine which products and services their organizations need to purchase and then find,
evaluate, and choose among alternative suppliers and brands

A.Business purchases involve more professional purchasing effort than consumer purchases; more decision participants; trained purchasing agents; high-level trained
supply managers. NOT MANUFACTURING PURCHASING EFFORT

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4.Business markets are similar to consumer markets in that both involve people who assume buying roles and make purchase decisions to satisfy needs

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LEARNING OBJECTIVES
1. Define the business market and explain how business markets differ
from consumer markets.
2. Identify the major factors that influence business buyer behavior.
3. List and define the steps in the business buying decision process.
4. Discuss how new information technologies and online, mobile, and
social media have changed business-to-business marketing.
5. Compare the institutional and government markets and explain how
institutional and government buyers make their buying decisions.

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19 DERIVED DEMAND : Business demand that ultimately comes from (derives from) the demand for consumer goods.
12.Demand for outboard motors depends on consumers purchasing fishing boats.

C.Maria Theresa shops for her family's groceries at the local Whole Foods store. --> NOT the part of business market

SUMMARY
LO1: Define the business market and explain how business markets differ from
consumer markets.
• The business market comprises all organizations that buy goods and services for use in
the production of other products and services or for the purpose of reselling or renting them
to other at a profit.
• Business markets usually have fewer but larger buyers. than consumer markets

• Business demand is derived demand, which tends to be more inelastic and fluctuating
less affected by short-term price changes, while demand also fluctuates more quickly
than consumer demand.
• The business buying decision usually involves more, and more professional buyers.
• Business buyers and sellers are often more dependent on each other.
- Business buyers usually face MORE COMPLEX buying decisions than do consumer buyers

- The business buying process also tends to be LONGER n MORE FORMALIZED

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20 7.The Pure Drug Company produces insulin, a product with a very stable demand. Even though the price changed several times in the past two years, the
demand for Pure Drug's insulin remained relatively unaffected. In this instance, the demand for insulin is representative of INELASTIC DEMAND

9.A university enrolled 200 graduate students in the Fall of 2015. However, the enrollment rate was only slightly affected following a 12-percent hike in tuition the following
fall. This illustrates INELASTIC demand.

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 SUPPLIER DEVELOPMENT: Systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for 11/3/2022
use in making products or reselling them to others.

To keep the business, “in” suppliers try to maintain customer engagement and product and service quality. “Out” suppliers
try to find new ways to add value or exploit dissatisfaction so that the buyer will consider them
SUMMARY
LO2: Identify the major factors that influence business buyer behavior
• Business buyers make decisions that vary with the three types of buying situations: straight
rebuys, modified rebuys, and new tasks.
o Straight rebuy: the buyer reorders something without any modifications.
The “in” suppliers may o In a modified rebuy, the buyer wants to modify product specifications, prices, terms, or
become nervous and feel
pressured to put their
suppliers.
best foot forward to o A company buying a product or service for the first time faces a new task situation.
protect an account. “Out”
suppliers may see the
modified rebuy situation
as an opportunity to
make a better offer and
gain new business

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SYSTEMS/SOLUTIONS SELLING: buying a packaged solution to a problem from a single seller -> avoid all the separate decisions involved in a complex
21 buying situations

SUMMARY
LO3: List and define the steps in the business buying decision process

describes the characteristics

and quantity decide/specify the best buyer tries to find the best vendors

buyer invites qualifies suppliers review proposals n select buyer writes the final buyer assess the performance
to submit proposals supplier order w/ the chosen supplier of supplier n decide to continue/motify/drop

49.The decision-making unit of a purchasing organization

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22multiple participants in the business buying process: the BUYING CENTER are all the indi and units that play a role in the purchase decision-making process
there are
- users: actually use the purchased products/services
- influencers:affect buying decision; help define specifications, provide in4 for eva alternatives
- buyers: make an actual purchase
- deciders: have formal/informal power to select or approve the final suppliers
- gatekeepers: control the flow of in4 to others
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Another environmental factor is the SUPPLY of key materials. Business buyers also are affected by TECHNOLOGICAL, POLITICAL, and COMPETITIVE developments
in the environment. Finally, CULTURE N CUSTOMES can strongly influence business buyer reactions to the marketer’s behavior and strategies, especially in the
international marketing environment

SUMMARY
LO4: Discuss how new information technologies and online, mobile, and social media have
changed business-to-business marketing.
• The internet gives business buyers access to new suppliers, lowers purchasing costs, and
hastens order processing and delivery.
• E-Procurement and Online Purchasing:
E-PRODUCEMENT involves purchasing through electronic connections bt buyers n sellers, usually online
o Advantages ---> lower transaction costs, efficient purchasing
✓ Access to new suppliers
✓ Lowers costs
✓ Speeds order processing and delivery
✓ Enhances information sharing
✓ Improves sales
✓ Facilitates service and support
o Disadvantages
✓ Erodes relationships as buyers search for new suppliers

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B-to-B marketers know that they aren’t really targeting businesses, they are targeting individuals in those businesses who affect buying decisions.

SUMMARY
LO5: Compare the institutional and government markets and explain how
institutional and government buyers make their buying decisions.
• The institutional market consists of schools, hospitals, prisons, and other institutions
that provide goods and services to people in their care. These markets are
characterized by low budgets and captive patrons.
• The government market, which is vast, consists of government units—federal, state, and
local—that purchase or rent goods and services for carrying out the main functions of
government.
• Government buyers purchase products and services for defense, education, public welfare,
and other public needs. Government buying practices are highly specialized and specified,
with open bidding or negotiated contracts characterizing most of the buying

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DISCUSSION 1
• Compare and contrast buyer behaviour and business buyer behaviour?
SUPPLIER DEVELOPMENT involves systematically developing networks of supplier-partners to ensure a dependable supply of products and materials for use in
making products or reselling them to others.
EX: 18.The owners of a manufacturing firm in Ohio have developed a core network of suppliers to ensure an uninterrupted supply of products

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DISCUSSION 2
• Among the four major sets of factors that influence consumer buyer behavior, which
characteristics influenced your choice when deciding on the school you would attend? Are those
the same characteristics that would influence you when deciding what to do on Saturday night?

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DISCUSSION 3
• https://www.youtube.com/watch?v=vuvYrY8VViw
Question: What makes GoPro so successful?

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DISCUSSION 4: COMPANY CASE GOLDIEBLOX: SWIMMING

UPSTREAM AGAINST CONSUMER PERCEPTIONS

Read the case GoldieBox on page 184 and answer the questions in the case.

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EXTRA QUESTION FOR DISCUSSION 4

• What was your favourite toy when you were a child and why?
• Is there any link between your favourite toy with your career you are going to
choose?

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DISCUSSION 5: IBM - THE WORLD’S MOST

VALUABLE BUSINESS-TO-BUSINESS BRAND
• https://www.youtube.com/watch?v=X7IN7n4gKpk

Question: What makes IBM so successful with B2B customers?

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