Strategic Marketing: Understanding Consumer and Business Buyer Behavior

Module:
Strategic Marketing
Understanding Consumer and Business Buyer Behavior.
Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved
Susan Hart, the manager of a children's boutique,
collects data from her monthly records of sales, costs,
and cash flow. In this case, Susan is making use of
________ databases.
A) external
B) secondary
C) historical
D) internal
E) dialog
Objectives Outline
1.Understand the consumer market and the major
factors that influence consumer buyer behavior.
2.Identify and discuss the stages in the buyer

decision process.
3.Describe the adoption and diffusion process for

new products.
Objectives Outline
4.Define the business market and identify the major

factors that influence business buyer behavior.
5.List and define the steps in the business buying

decision process.
6.Discuss how online, mobile, and social media have

changed business-to-business marketing.
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Objective Outline
1. Understand the consumer market and the major factors

that influence consumer buyer behavior.
“To be a bullfighter, you must
first learn to be a bull”.
Analyze Market Opportunities: Consumers
• To determine the opportunities, the marketer answers two questions:
• Who are our target customers?
• Why should they buy our product and not our competitors'?
Who are your target customers?
Your firm probably has many different potential customers
who may be interested in your company's offerings.
But, they likely fall into one of two main categories:

(1) Individual consumers
(2) Businesses or organizations.
Whether your firm sells mainly to individual consumers or

businesses depends on its mission.
Consumer Buyer Behavior and Consumer Markets
Consumer buyer behavior
• Buying behavior of final consumers
Consumer market
• All the individuals and households that buy or acquire
goods and services for personal consumption
The Model of Buyer Behavior
Understanding the whys of buying

behavior is very difficult. Says one
expert,
“the mind is a whirling, swirling, jumbled
mass of neurons bouncing around. . . .”
Factors Influencing Consumer Behavior
Many levels of factors affect our buying behavior—from broad

cultural and social influences to motivations, beliefs, and
attitudes lying deep within us. For example, why did you buy
that specific mobile phone you’re carrying?

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Factors Influencing Consumer Behavior
Cultural Factors
Cultural Factors
1. Culture
• Set of basic values, perceptions, wants, and behaviors learned
by an individual from family and other important institutions.
BEHAVIOUR
ARTEFACTS
RITUALS Observable
VALUES & Non

BELIEFS observable
2. Subculture
• Group of people with shared value systems based on common
life experiences and situations
• Total market strategy integrates ethnic themes and cross-
cultural perspectives within a brand’s mainstream marketing.
Cultural Example
McDonald’s sells a vegetarian Maharaja Mac instead of Big Mac in India
Cultural Variations in Nonverbal Communications
Etiquette
Meishi is an important aspect of Japanese business

etiquette…..”a man without a Meishi has no identity in Japan.”
What is Meishi? It is the exchange of business cards!
Cultural Factors
3. Social class
• Relatively permanent and ordered divisions in a society
whose members share similar values, interests, and
behaviors
-Class A ---- upper middle class
-Class B ---- middle class
-Class C1 ---- lower middle
-Class C2----- skilled workers
-Class D ----- unskilled workers
-Class E ----- unemployed & pensions
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Cultural Factors
Targeting Hispanic
consumers:
Nestlé’s Construye el Mejor
Nido campaign focuses heavily
on how Nestlé and its brands
help to build family
togetherness and well-being.

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Social Factors

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Social Factors
• Family
Roles and status i.e. People usually choose products appropriate to their
roles and status.
• Groups e.g. Reference groups

• Word-of-mouth influence
• Opinion leaders e.g. influentials or leading
adopters (Buzz marketing)
• Online social networks

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Personal Factors
• Occupation
• Age and family life-cycle
• Economic situation
• Lifestyle
• Personality and self-concept

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Personal Factors
Brand personality:
MINI markets to personality segments of

people who are “adventurous,
individualistic, open-minded, creative,
tech-savvy, and young at heart”—anything
but “normal”—just like the car.

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Psychological Factors
Psychological Factors
Example
Jeep uses an appeal to security needs

Example
Pampers appeals to needs

for love and belonging
Dimensions of a Consumer’s Self-Concept
Using self concept to position products
A person may drink diet colas because his desired self concept includes a trim figure
Successive Sets
Involved in Consumer Decision Making
Objective Outline
Identify and discuss the stages in the buyer decision

process.
Buyer Decision Process
Need Recognition
The consumer has an unsatisfied need &

is looking for a solution
Information Search
The consumer considers all possible alternatives by asking relatives,

pharmacist, doctor or internet search
KOL, KOF
Evaluation of alternatives
The consumer assesses all reasonable choices based on

previous experience, available promotion or consultation
Purchase Decision
Merchandising Influences
Between 25% to 30% of the planned purchase decisions are switched
inside the retail.
Postpurchase Behavior
Postpurchase customer
satisfaction is a key to
building profitable
customer relationships.
Postpurchase cognitive dissonance:

No matter what choice they make, consumers feel at
least some postpurchase dissonance for every
decision.
Objective Outline
1.Describe the adoption and diffusion process for new

products.
Stages in the Adoption Process

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Adopter Categories Based on Relative Time of Adoption of
Innovations

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Characteristics Influencing an Innovation’s Rate of Adoption
Discussion
Now that we’ve looked at consumer

markets and buyer behavior, let’s dig
into business markets and buyer
behavior. Thinking ahead, how are
they the same?
How are they different?
Objective Outline
4.Define the business market and identify the major

factors that influence business buyer behavior.
Business Buyer Behavior

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Business Markets
• Business markets are huge and involve more

money and items than consumer markets.
• Differ from consumer markets in terms of

– Market structure and demand
– Nature of the buying unit
– Types of decisions and the decision process
Details
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Market Structure and Demand
• Business market structure and demand:
– Fewer but larger buyers

– Derived demand: Business demand that comes from
the demand for consumer goods
– Inelastic and fluctuating demand

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Nature of the Buying Unit
• Nature of the business market buying unit

– More decision participants
– More professional purchasing effort

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Types of Decisions
• Business purchases
– More complex buying decisions
– Large sums of money
– Complex technical and economic considerations
– Interactions among people at many levels of the

buyer’s organization

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Decision Process
• Buying processes
– Longer and more formalized procedures
– Buyer and seller more dependent on each other
• Supplier development: Systematic development of

networks of supplier-partners to ensure a
dependable supply of products and materials

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A Model of Business Buyer Behavior

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Types of Buying Situations
Straight rebuy
• Buyer routinely reorders something without any modifications
Modified rebuy
• Buyer wants to modify product specifications, prices, terms, or
suppliers
New task
•Buyer purchases a product or service for the first time
Systems selling (or solutions selling)
• Buying a packaged solution to a problem from a
single seller
• Avoids the separate decisions involved in a complex buying
situation
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Types of Buying Situations
Solutions selling:
Delivering a fun and safe
experience for Six Flags
guests requires careful and
effective management of
thousands of park assets
across its 19 regional theme
parks. IBM works hand in
hand with Six Flags to
provide not just software,
but a complete solution.

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Participants in the Business Buying Process
• Buying center: All the individuals and units that play

a role in the purchase decision-making process
– Actual users of the product or service
– People who make the buying decision
– People and units influencing the buying decision
– People who do the actual buying
– Individuals and units controlling the buying
information

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Major Influences on Business Buying Behavior
Objective Outline
List and define the steps in the business buying decision

process.
Stages of the Business Buyer Decision Process
E-Procurement and Online Purchasing
• Purchasing through electronic connections

between buyers and sellers—usually online.
• E-procurement occurs through

– Reverse auctions (invite suppliers to bid for the
business)
– Online trading exchanges
– Company buying sites
– Extranet links with key suppliers

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Benefits and Problems of E- Procurement
• Benefits
– Cuts transaction costs
– Results in efficient purchasing for both buyers and
suppliers
– Reduces the time between order and delivery
– Helps an organization keep better track of all
purchases
– Frees buyers from a lot of paperwork
• Problems
– Can affect the customer-supplier relationship
– Pits suppliers against one another
Business-to-Business Digital and Social Media Marketing
• B-to-B marketers are now using a wide range of

digital and social media marketing approaches.
• Compared with traditional media and sales

approaches, digital and social media can create
greater customer engagement and interaction.
Marketing Strategy and Consumer Behavior
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Module:

Understanding Consumer and Business Buyer Behavior.

2.Identify and discuss the stages in the buyer

3.Describe the adoption and diffusion process for

4.Define the business market and identify the major

5.List and define the steps in the business buying

6.Discuss how online, mobile, and social media have

Copyright © 2020, 2017, 2015 Pearson

1. Understand the consumer market and the major factors

• Who are our target customers?

But, they likely fall into one of two main categories:

Whether your firm sells mainly to individual consumers or

Understanding the whys of buying

Many levels of factors affect our buying behavior—from broad

Copyright © 2020, 2017, 2015 Pearson

VALUES & Non

McDonald’s sells a vegetarian Maharaja Mac instead of Big Mac in India

Meishi is an important aspect of Japanese business

Copyright © 2020, 2017, 2015 Pearson

Copyright © 2020, 2017, 2015 Pearson

• Groups e.g. Reference groups

Copyright © 2020, 2017, 2015 Pearson

Copyright © 2020, 2017, 2015 Pearson

MINI markets to personality segments of

Copyright © 2020, 2017, 2015 Pearson

Jeep uses an appeal to security needs

Pampers appeals to needs

Identify and discuss the stages in the buyer decision

The consumer has an unsatisfied need &

The consumer considers all possible alternatives by asking relatives,

The consumer assesses all reasonable choices based on

Postpurchase cognitive dissonance:

1.Describe the adoption and diffusion process for new

Copyright © 2020, 2017, 2015 Pearson

Copyright © 2020, 2017, 2015 Pearson

Now that we’ve looked at consumer

4.Define the business market and identify the major

Copyright © 2020, 2017, 2015 Pearson

• Business markets are huge and involve more

• Differ from consumer markets in terms of

• Business market structure and demand:

– Fewer but larger buyers

Copyright © 2020, 2017, 2015 Pearson

• Nature of the business market buying unit

Copyright © 2020, 2017, 2015 Pearson

– Large sums of money

– Complex technical and economic considerations

– Interactions among people at many levels of the

Copyright © 2020, 2017, 2015 Pearson

• Supplier development: Systematic development of

Copyright © 2020, 2017, 2015 Pearson

Copyright © 2020, 2017, 2015 Pearson

Copyright © 2020, 2017, 2015 Pearson

• Buying center: All the individuals and units that play

Copyright © 2020, 2017, 2015 Pearson

List and define the steps in the business buying decision

• Purchasing through electronic connections

• E-procurement occurs through