4

Consumer and Business

Buyer Behavior
 ROAD MAP: Previewing the Concepts

• Understand the consumer market and the major

factors that influence consumer buyer behavior.
• Identify and discuss the stages in the buyer
decision process.
• Describe the adoption process for new products.
• Define the business market and identify the major
factors that influence business buyer behavior.
• List and define the steps in the business buying
decision process.

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 Buying Behavior
• Refers to what, where, when, how, how much and
why the buying is made.
• Can be classified into 2:
– Consumer buying behavior
• the buying behavior of people who buy goods
and services for personal use.
– Business buying behavior
• the buying behavior of the organizations that
buy goods and services for use in the
production of other products and services that
are sold, rented, or supplied to others,
including retailers and wholesalers.

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Model of Consumer Buying Behavior

Figure 5.2

turn
enter
into

Influence how consumer Affect buyer’s behavior

perceive and react to
stimuli
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Characteristics affecting Consumer
Behavior
Figure 5.3

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 Factor 1: Cultural
• Culture
• the most basic cause of a person's wants and behavior.
• learned from family, church, school, peers, colleagues.
• includes basic values, perceptions, wants, and behaviors.
• Subculture
• Groups of people with shared value systems based on
common life experiences and situations
• Includes nationalities, religions, racial groups and
geographic region
• Social Class
• Society’s relatively permanent and ordered divisions whose
members share similar values, interests, and behaviors.
• Measured by a combination of: occupation, income,
education, wealth, and other variables.

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 Factor 2: Social Factors
• Small groups
• Include membership groups (to which a person belongs),
reference (opinion leaders) groups and aspirational groups
( to which an individual would like to belong).
• Expose a person to new behaviors and lifestyles, influence
the person’s attitude and self-concept and create pressure to
conform
• Family
• Most important consumer: husbands, wives, children
• Roles & Status
• A person’s position in each group
• Role consists of the activities people are expected to
perform according to persons around them
• Status reflecting the general esteem given to role by society

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 Personal Factors
• Personal characteristic that affect what the consumer buys
include
• age and life-cycle stage
• occupation
• economic situation
• lifestyle
• pattern of living, acting and interacting with the world
• Involves consumer’s major AIO dimensions: activities,
interests, opinions
• personality & self-concept
• Personality
• the unique psychological characteristics that lead to relatively
consistent and lasting responses to one’s own environment.
• Self-concept
• suggests that people’s possessions contribute to and reflect their
identities.
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 Psychological Factors
• Motivation
• a need that is sufficiently pressing to direct the person to
seek satisfaction
• Maslow’s Hierarchy of Need: physiological, safety, social,
esteem and self-actualization
• Perception
• process by which people select, organize and interpret
information to form a meaningful picture of the world
• Perceptual process:
• Selective Exposure: tendency for people to screen out most of
the information to which they are exposed
• Selective Distortion: tendency of people to interpret information
in a way that will support what they are already believe
• Selective Retention: tendency of people to retain only information
that supports their attitudes and beliefs

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 Psychological Factors
• Learning
• Permanent changes in an individual’s behavior arising from
experience
• Strongly influenced by the consequences of an individual’s
behavior
• Behaviors with satisfying results tend to be repeated.
• Behaviors with unsatisfying results tend not to be repeated.
• Belief and attitude
• Belief: descriptive thought that a person has about
something
• Attitude: a person’s consistent evaluations, feelings and
tendencies toward an object or an idea

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Consumer Buying Decision Process
Figure 5.6

In more routine purchases, consumers can skip or even reverse some

of the stage

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Consumer Buying Decision Process
Step #1 = Need Recognition
• Individual aware of his/her problem or need.
• Can come from external stimuli such as advertising
or internal stimuli such as hunger or thirst
• Recognition speed can be slow or fast.

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Consumer Buying Decision Process
Step #2 = Information Search
• May or may not take place
• If it does, consumer can get information from many
sources:
– Personal
• Most effective source
• Include family, friends, neighbors
– Commercial
• Include advertising, salespeople
• provide the most information
– Public
• Include mass media and consumer-rating groups
– Experiential
• Include consumer handling, examining and using the product
themselves

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Consumer Buying Decision Process
Step #3= Alternative Evaluation
• Consumer is now confronted with a number of
options
• Choice involves element of risk
• Consumer will evaluate product options based on
different “evaluative criteria” or attributes
• Consumer will apply different decision rules
depending on complexity of the decision
– May Use Careful Calculations & Logical Thinking
– Buy on Impulse and Rely on Intuition
– Make Buying Decisions on Their Own
– May Make Decisions After Talking With Others

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Consumer Buying Decision Process
Step #4= Purchase
• Consumer forms the purchase intention and but what
they have decided on
• 2 factors that can delay in purchases
– Attitudes of others: doubt of the decision made
– Unexpected situational factors: drop in income or
competitors drop their prices

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Consumer Buying Decision Process
Step #5= Post Purchase
• Customer could experience satisfaction,
dissatisfaction or dissonance
• Satisfaction: function of the consumer expectation
and the perceived product performance
– Performance < Expectations Disappointment
– Performance = Expectations Satisfaction
– Performance > Expectations Delight
• Cognitive dissonance: a buyer’s doubts shortly after
a purchase about whether it was the right decision.

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 Adoption Process
• Adoption process: process for consumer to become a regular user
of a new product
• Stages in the Adoption Process
• Awareness: Consumer becomes aware of the new product, but lacks
information about it.
• Interest: Consumer seeks information about new product.
• Evaluation: Consumer considers whether trying the new product makes
sense.
• Trial: Consumer tries new product on a small scale to improve his or her
estimate of its value.
• Adoption: Consumer decides to make full and regular use of the new
product.
• Product Adopter Categories
• Innovators: adventuresome that try new ideas at some risk
• Early adopters: opinion leaders and adopt new ideas carefully
• Early majority: rarely leaders who adopt before the average person
• Late majority: skeptical, who wait for a majority of people to adopt first
• Laggards: tradition-bound, suspicious of changes
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 Business Markets
• Huge and involves far more dollars and items than do
consumer markets.
• Differ from consumer markets in term of
– Market Structure and Demand:
• Contains far fewer but larger buyers.
• Customers are more geographically concentrated.
• Business demand is derived from consumer demand.
– Nature of the Buying Unit:
• Business purchases involve more decision participants.
• Business buying involves a more professional purchasing effort.
– Types of Decisions and the Decision Process
• Business buyers usually face more complex buying decisions
• Business buying process tends to be more formalized
• Buyers and sellers are much more dependent on each other

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A Model of Business Buyer Behavior
Figure 5.13

affect produce

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 Major Types of Buying Situations

The buyer routinely reorders

Straight Rebuy something without any
modifications.

The buyer wants to modify

Modified Rebuy product specifications,
prices, terms, or suppliers.

The buyer purchases a

New Task product or service for the
first time.

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 Buying Center
• Decision-making unit of a buying organization
• Not a fixed and formally identified unit within the purchasing
department.
• Membership will vary for different products and buying situations.
• Buying center members:
– Users: members who initiate the buying proposal, will use the product
and help define specification for the product
– Influencers: members who help define specification for the product
and provide information for evaluating alternatives eg. Technical
personnel
– Buyers: members who have formal authority to select supplier and
negotiate terms of purchase
– Deciders: members who have formal and informal power to select and
approve the final supplier. In routine buying, the buyers are often the
deciders.
– Gatekeepers: members who control the flow of information

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Major Influences on Business Buyer
Behavior
Figure 5.14

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Stages in the Business Buying
Process
Figure 5.15

Buyers who are facing a new-task situation will usually go through all stages
of the buying process. Those going through modified or straight rebuys may
skip some of the stages.

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 Stages in the Business Buying
Process
• Problem recognition: begins when someone in the company
recognizes a problem or need that can be met by acquiring a
specific product or service
• A general need description: describe the characteristics and
quantity needed of an item.
• The product specification includes the technical product
specifications.
• A supplier search: conducted to find the best vendors. The newer
the buying task, and the more complex and costly the item, the
greater the amount of time the buyer will spend searching for
suppliers.
• The proposal solicitation: the buyer invites qualified suppliers to
submit proposals. When the item is complex or expensive, the
buyer will usually require detailed written proposals or formal
presentations from each potential supplier.

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 Stages in the Business Buying
Process
• Supplier selection: occurs after the buying center reviews the proposals.
The buying center may draw up a list of desired supplier attributes and
their relative importance. Buyers may also attempt to negotiate with
preferred suppliers for better prices and terms before making final
selections.
• An order-routine specification is now prepared that includes the final
order with the chosen supplier or suppliers. It lists items such as
technical specifications, quantity needed, expected time of delivery, return
policies, and warranties. Buyers may use blanket contracts for routine
items; this creates a long-term relationship in which the supplier
promises to resupply the buyer as needed at agreed prices for a set
period of time.
• Finally, buyers conduct a performance review. In this stage, the buyer may
contact users and ask them to rate their satisfaction. This review may lead
the buyer to continue, modify, or drop the arrangement with the seller

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 e-Procurement
• Online purchase by business buyers
• Usually involve MRO materials: maintenance,
repair and operating items
• Advantages for buyers:
– Access to new suppliers
– Lowers purchasing costs
– Hastens order processing and delivery
• Advantages for vendors:
– Share information with customers
– Sell products and services
– Provide customer support services
– Maintain ongoing customer relationships

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