Buying behavior

Factors influencing buying

behavior; stages in buying
 The 7 O’s framework of research
1. Who constitutes the markets? Occupants
2. What does the market buy? Objects
3. Why does the market buy? Objectives
4. Who participates in the buying? Organizations
5. How does the market buy? Operations
6. When does the market buy? Occasions
7. Where does the market buy? Outlets
 The 7 O’s framework of research
1. Who constitutes the markets? Occupants
2. What does the market buy? Objects
3. Why does the market buy? Objectives
4. Who participates in the buying? Organizations
5. How does the market buy? Operations
6. When does the market buy? Occasions
7. Where does the market buy? Outlets
In this lecture we focus on -
Factors influencing buyer behavior
Factors
Factors Influencing
Influencing
Consumer
Consumer Behavior
Behavior

Cultural
Social
Personal
Age and Psycho-
Culture Reference logical
groups life-cycle
Occupation Motivation
Sub- Economic Perception Buyer
culture Family situation Learning
Lifestyle Beliefs and
Personality attitudes
Roles and
Social and self-concept
class status
 Factors
Factors Affecting
Affecting Consumer
Consumer
Behavior:
Behavior:
Culture
Culture
Culture
Culture
•• Most
Most basic
basic cause
cause of
of aa person's
person's wants
wants and
and behavior.
behavior.
•• Values,
Values, Perceptions,
Perceptions, Wants
Wants && Behavior
Behavior

Subculture
Subculture Social
Social Class
Class
•• Groups
Groupsofofpeople
peoplewith shared •• Society’s
withshared Society’srelatively
relatively
value
valuesystems
systemsbased
basedonon permanent
permanent&&ordered
ordered
common
commonlife
lifeexperiences.
experiences. divisions
divisionswhose
whosemembers
members
share
share similar
similarvalues,
values,
•• Hispanic
HispanicConsumers
Consumers interests,
interests,and
andbehaviors.
behaviors.
•• African
AfricanAmerican
AmericanConsumers
Consumers •• Measured
Measuredby:by:Occupation,
Occupation,
•• Asian
AsianAmerican
AmericanConsumers
Consumers Income,
Income,Education,
Education,Wealth
Wealth
and
and Other
Other Variables.
Variables.
•• Mature Consumers
Mature Consumers
 Cultural Factors
• Culture exerts a broad and deep influence on
consumer behavior, it is a result if the person’s
upbringing.
• Subculture includes nationalities, religion, racial
groups and geographic regions
• Social class are relatively homogeneous and
enduring divisions in society, which are
hierarchically ordered and whose members
share similar values, interests and behavior
 Factors
Factors Affecting
Affecting Consumer
Consumer
Behavior:
Behavior:
Social
Social
Groups
Groups
••Membership
Membership
••Reference
Reference

Family
Family
••Husband,
Husband, wife,
wife, kids
kids Social
Social Factors
Factors
••Influencer,
Influencer, buyer,
buyer, user
user

Roles
Roles and
and Status
Status
 Social Factors
• Referenced groups – all groups that have a direct, face
to face (primary groups) or indirect (secondary groups)
influence on a person’s attitude or behavior. Reference
groups can also be groups of which an individual is not a
member (aspirational group)
• Family – is the most important consumer- buying
organization, members of a family are the most
important primary reference group
• Roles and statuses – people choose products that
communicate their role and status in life (therefore the
importance of the status symbol potential of brands)
 Factors
Factors Affecting
Affecting Consumer
Consumer
Behavior:
Behavior:
Personal
Personal
Personal Influences
Personal Influences

Age
Age and
and Life
Life Cycle
Cycle Occupation
Occupation
Stage
Stage

Economic
Economic Situation
Situation Personality
Personality && Self-Concept
Self-Concept

Lifestyle
Lifestyle Identification
Identification

Activities
Activities Opinions
Opinions

Interests
Interests
 Personal factors
1. Buyers age and stage in lifecycle
1. From a consumer of baby food to ginseng tablets
2. There is a family lifecycle too – bachelor to solitary
survivor

2. Occupation
3. Economic circumstances
4. Lifestyle
1. Psychographics – the science of measuring and
categorizing consumer lifestyles – AIO framework and
VALS

5. Personality and self concept

AIO statements identify consumer
activities, interests, and opinions
– Activity questions ask consumers to indicate
what they do, what they buy, and how they
spend their time.
– Interest questions focus on what the
consumers’ preferences and priorities are.
– Opinion questions ask for consumers’ views
and feelings on such things as world, local,
moral, economic, and social affairs.
 SRI developed two psychographic
inventories: VALS and VALS 2
• VALS is based upon motivational and
developmental psychological theories
particularly Maslow’s hierarchy of needs
theory.
• VALS 2 was developed specifically to
measure consumer buying patterns.
 The VALS 2 Inventory

• Goal of VALS 2 is to identify specific relationships

between consumer attitudes and purchase behavior.
• Three self-identify orientations: principle oriented people,
status oriented people, and action oriented people.
• Three resource orientations: financial, psychological, and
material. Based upon total number of resources, people
could be categorized based upon their level of resources.
• VALS 2 used by corporations to understand the basis for
consumer lifestyles, which is useful for developing
promotional strategy and even where to place retail
stores such as The Sharper Image.
 Factors
Factors Affecting
Affecting Consumer
Consumer Behavior:
Behavior:
Psychological
Psychological

Motivation
Motivation

Beliefs Psychological
Beliefs and
and Perception
Perception
Attitudes Factors
Attitudes

Learning
Learning
 Psychological factors
1. Motivation – a need becomes a
motivation only when there is an intensity
to satisfy it. Many theories namely
Freudian, Maslow’s and Herzberg’s
2. Perception
3. Learning
4. Belief
Maslow’s
Maslow’s Hierarchy
Hierarchy of
of Needs
Needs

Self
Actualization
(Self-development)

Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst)
 Psychological factors
1. Motivation
2. Perception – How the motivated person acts is
determined by his/her perceptions. Peoples
perceptions are skewed – they experience selective
attention, selective distortion and selective retention
3. Learning – Involves changes in peoples behavior
post experience. They arise from interplay of drives,
stimuli, cues, responses and reinforcement
4. Belief – through doing and learning, people develop
beliefs
The
The Buyer
Buyer Decision
Decision Process
Process

Need
Need Recognition
Recognition

Information
Information Search
Search

Evaluation
Evaluation of
of Alternatives
Alternatives

Purchase
Purchase Decision
Decision

Post-purchase
Post-purchase Behavior
Behavior
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 1.
1. Need
Need Recognition
Recognition

Need
NeedRecognition
Recognition
Buyer
BuyerRecognizes
RecognizesaaProblem
Problemor
orNeed
Need

Internal
Internal Stimuli
Stimuli External
External Stimuli
Stimuli
••Hunger
Hunger ••TV
TVadvertising
advertising
••Thirst
Thirst ••Magazine
••AAperson’s Magazinead ad
person’snormal
normalneeds
needs ••Radio
Radioslogan
slogan
••Stimuli
Stimuliininthe
theenvironment
environment
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 2.
2. Information
Information Search
Search
•Family, friends, neighbors
Personal
PersonalSources
Sources •Most effective source of
information

•Advertising, salespeople
Commercial
CommercialSources
Sources •Receives most information from
these sources

•Mass Media
Public
PublicSources
Sources •Consumer-rating groups

•Handling the product

Experiential •Examining the product
ExperientialSources
Sources •Using the product
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 3.
3. Evaluation
Evaluation of
of Alternatives
Alternatives

Consumer
ConsumerMayMayUse
UseCareful
Careful
Calculations
Calculations&&Logical
LogicalThinking
Thinking

Consumers
ConsumersMay
MayBuy
BuyononImpulse
Impulseand
and
Rely
Relyon
onIntuition
Intuition

Consumers
ConsumersMay
MayMake
MakeBuying
BuyingDecisions
Decisions
on
onTheir
TheirOwn.
Own.

Consumers
ConsumersMay
MayMake
MakeBuying
BuyingDecisions
Decisions
Only
OnlyAfter
AfterConsulting
ConsultingOthers.
Others.

Marketers Must Study Buyers to Find Out

How They Evaluate Brand Alternatives
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 4.
4. Purchase
Purchase Decision
Decision

Purchase
PurchaseIntention
Intention
Desire
Desireto
tobuy
buythe
themost
mostpreferred
preferredbrand
brand

Attitudes of Unexpecte
Others d
Situational
Factors

Purchase
PurchaseDecision
Decision
The
The Buyer
Buyer Decision
Decision Process
Process
Step
Step 5.
5. Post-purchase
Post-purchase Behavior
Behavior

Consumer’s
Consumer’sExpectations
Expectationsof
of
Product’s
Product’sPerformance
Performance

Product’s
Product’sPerceived
PerceivedPerformance
Performance

Satisfied
SatisfiedCustomer!
Customer! Dissatisfied
DissatisfiedCustomer
Customer

Cognitive
CognitiveDissonance
Dissonance
Stages
Stages in
in the
the Adoption
Adoption Process
Process

Awareness
Awareness

Interest
Interest

Evaluation
Evaluation

Trial
Trial

Adoption
Adoption
Percentage of Adopters Adopter
Adopter Categories
Categories

Early Majority Late Majority

Innovators

Early Laggards
Adopters 34% 34%

13.5% 16%
2.5% Time of Adoption
Early Late
 Influence
Influence of
of Product
Product Characteristics
Characteristics

on
on Rate
Rate of
of Adoption
Adoption
Communicability Relative Advantage
Can results be easily Is the innovation
observed or described superior to existing
to others? products?

Product
Product Compatibility
Divisibility Characteristics
Characteristics Does the
Can the innovation innovation
be used on a fit the values and
trial basis? experience of the
target market?
Complexity
Is the innovation
difficult to
understand or use?
 What
What is
is aa Business
Business Market?
Market?
• Business Buyer Behavior refers to the
buying behavior of all 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.

• The business market is huge and involves

many more dollars and items do consumer
markets.
Characteristics
Characteristics of
of Business
Business Markets
Markets
Market
MarketStructure
Structureand
andDemand
Demand
••Fewer,
Fewer,larger
largerbuyers
buyers
••Geographically
Geographicallyconcentrated
concentrated
••Demand
Demandderived
derivedfrom
fromconsumers
consumers
••Fluctuating
Fluctuatingdemand
demand

Nature
Natureof
ofthe
theBuying
BuyingUnit
Unit
••More
Morebuyers
buyers
••More
Moreprofessional
professionalpurchasing
purchasing
effort
effort
Types
Typesof
ofDecisions
Decisions&&the
the
Decision
DecisionProcess
Process
••More
Morecomplex
complexdecisions
decisions
••Process
Processis ismore
moreformalized
formalized
••Buyer
Buyer and seller aremore
and seller are more
dependent
dependenton oneach
eachother
other
••Build
Buildclose
closelong-term
long-termrelationships
relationships
with
withcustomers
customers
 Model
Model of
of Business
Business Buyer
Buyer Behavior
Behavior
Product Marketing
Marketing and
and Economic
Price Other
Other Stimuli
Stimuli Technological

Place Political
Cultural
Promotion

Organization The
The Buying
Buying
The
Organization
Organization
Buying Center Interpersonal
al Influences and Individual
Buying Decision
Process Influences

Product or Service Delivery Terms

Choice and Times
Buyer’s
Buyer’s Response
Response
Supplier Choice Service Terms
Order Quantities Payment
Business
Business Buying
Buying Situations
Situations

New
NewTask
TaskBuying
Buying
Involved Decision Making

Modified
ModifiedRe-buy
Re-buy

Straight
StraightRe-buy
Re-buy
 Participants
Participants in
in the
the Business
Business
Buying
Buying
Process:
Process: The
The Buying
Buying Center
Center
Gatekeepers Users

Buying
Buying Center
Center
Buyers Deciders

Influencers
Major
Major Influences
Influences on
on Business
Business
Buyer
Buyer Behavior
Behavior
Environmental
Environmental
Economic,
Economic,Technological,
Technological,Political,
Political,Competitive
Competitive

Organizational
Organizational
Objectives,
Objectives,Policies,
Policies,Procedures,
Procedures,
Structure,
Structure,&&Systems
Systems
Interpersonal
Interpersonal
Authority,
Authority,Status,
Status,Empathy
Empathy&&
Persuasiveness
Persuasiveness
Individual
Individual
Age,
Age,Education,
Education,Job
JobPosition,
Position,Personality
Personality&&
Risk
RiskAttitudes
Attitudes

Buyers
Buyers
 Stages
Stages of of the
the
Business
Business
Buying
Buying
Problem Process
Process
ProblemRecognition
Recognition

General
GeneralNeed
NeedDescription
Description

Product
ProductSpecification
Specification

Supplier
SupplierSearch
Search

Proposal
ProposalSolicitation
Solicitation

Supplier
SupplierSelection
Selection

Order
OrderRoutine
RoutineSpecification
Specification

Performance
PerformanceReview
Review
 Rest
Rest Stop:
Stop:
Reviewing
Reviewing
the
the
Concepts
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 and diffusion 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.