SESSION 4:

CONSUMER AND BUSINESS-TO-BUSINESS

MARKET BUYER BEHAVIOUR: UNDERSTANDING
WHAT DRIVES CUSTOMERS AND HOW
MARKETERS USE THE KNOWLEDGE EFFECTIVELY

MSc. TRAN HONG HANH

VJCC Institute, Foreign Trade University
hanhth@[Link]
LESSON OBJECTIVES

• Understand basic concepts of consumer purchasing

behaviours
• Understand the definition and importance of
segmentation, and how to segment the market
• Customer buying process
• Customer experience
 BASIC CONCEPTS OF
CONSUMER BUYING BEHAVIOURS
Consumer Buying Behaviour
✔ Consumer buying behaviour refers to the actions,
decisions, and processes that individuals or groups go
through when they are purchasing products or services. It
involves understanding why, how, when, and where
consumers make purchasing decisions, and what factors
influence these decisions.
✔ The central question for marketers is:
- “How do consumers respond to various marketing
efforts the company might use”
Model of Buyer Behaviour
Market segment consists of:

A group of customers who share a similar

set of needs and wants

Source: Kotler, P. and K. L. Keller (2015) Marketing Management, 15th Ed. Global Edition,
Pearson
How can the company segment
the market?
The Four Steps for an effective segmentation:

1. Identifying product-related need sets or problems

2. Grouping customers with similar needs
3. Describing each group
4. Selecting an attractive segment(s) to serve

Hawkins D., Mothersbaugh D. and R. Best (2016) Consumer Behavior. McGraw-Hill Irwin, 10th edition
There are different ways for the company to do the market
segmentation

1. Consumer segmentation
2. Need segmentation
3. Category segmentation
4. Product segmentation
5. Channel segmentation
6. Shopper segmentation
 (1) Consumer Segmentation
Consumer segmentation - Dividing the market into major consumer groups, being used
for total analysis, on the purpose of strategic decision making.

Demographics
• Age, gender, nationality, race, religion
• Geographic information
• Human body

Social Economics
• Career, degree, income, group member, community, class
Psychographic
• Beliefs, lifestyles, attitudes, values, interests, philosophy, personalities
Behaviour pattern
• Purchase pattern, digital habit, shopping experience
Personality traits
• OCEAN model
 ● Demographics

Family and life

By age By gender Income
stage

Newborn Men Parents Middle income

Baby Women Professionals Higher income
Kids 2-8yrs
Kids 9-14yrs
Adults
 ● Social economics: Define how people look like in the society such
as career, degree, income, group member, community, class

By class • Luxury brands aim at boss to skim high pricing

• Marketing manager
• Senior finance
By career
• Controller
• CEO

• CRM classifies customer data as a base to design

By membership
promotion schemes

• Under-graduate
By degree • Post-graduate
• Doctorate
● Psychographic: refer to human mind, defining how people think,
perceive, believe, including: belief, attitudes, values, interests, philosophy,
personalities

• Skincare brands exploit healthy & green lifestyle of young

By lifestyle
consumer groups

• Premium limited edition collections create a consumer

By belief
wave of hunting

• KOL-endorsed music events attract young consumer

By interest
groups

• Modern-marketing brands sell emotion to consumers via

By values
its great philosophy
 Behavioral patterns: define significantly repeating behaviors in relation
to the market: purchase pattern, digital habit, shopping experience

• New user
By category
• Non user
purchase
• Competitor user

• Thematic promotion days (Pay Day, Black

By shopping
Friday, Super Brand Day) activates deal-
experience
hunting behaviour

• Small size
By volume • Medium size
usage • Big size
• Jumbo size

By • CR classifies customer as a base to design

membership promotion schemes
Personality traits: OCEAN model – an important base to learn human
expected capabilities and behaviours
Personality traits: OCEAN model – an important base to learn human
expected capabilities and behaviours
 Segmentation in the toothpaste market
Segment name
Worrier Sociable Sensory Independent
25 – 40 Teens 35 – 40
Demographic Children
Large families Young smokers Male
Profile High self-
Conservative: High sociability: High autonomy:
Psychographic improvement:
hypochondriacs active value ỏiented
hedonists
Signal Macleans Colgate
Product examples Own label
Mentadent P Ultra brite Aquafresh
Large tubes
What is bought, Large canisters Medium tubes
Product features Whitening Small tubes
where, when and Health properties Flavouring
properties
how
Outlet Supermarket Supermarket Supermarket Independent
Purchase
Weekly Monthly Monthly Quarterly
frequency
Why it is bought Benefits sought Stop decay Attract attention Taste Functionality
Price paid Medium High Medium Low
Percentage of
50% 30% 15% 5%
market
Potential for
Low High Medium Nil
growth
 (2) Need segmentation

• Human needs are the root cause why things are made, thus, do
need segmentation by each context to understand its connection
with solutions of the market, brands, products.

• Maslow’s hierarchy of expanded needs expresses human’s core

needs, being an important base to justify human psychology and
behavior.

• In business, market value chains differ by market, we need to equip

another need angle: functional, social and emotional to get into
brand competition.
Maslow’s hierarchy of extended needs. Source: Maslow (1954) &
 (3) Category segmentation

• When having a core need, consumers look for solutions in multiple categories

• Following the natural thinking flow of a shopper when he steps in a retailer,

starting with a need “I want to buy …”

• When needs arise, consumers look for solutions across multiple categories,
and category competition depends on barriers and drivers towards consumers.
Our market’s likely to compete with various substitutable categories.

• Category segmentation is the act of dividing the category into groups of sub-
category, following some criteria, so that we can do analysis over size, growth,
movement trend.
Category thinking process:

Beauty Care Segmentation

Male Female Baby & Kids

● Shampoo
● Body care
● Shaving
● Hair gel

Skincare Skincare Skincare

● Facial cleanser ● Shampoo

● Toner ● Dry shampoo
● Body wash
● Moisturizer ● Mask
● Soap
● Serum ● Repair water
● Body lotion
● Essence ● Styling
● Spray ● Coloring
 (4) Product segmentation

• The division of product groups based on common product

elements: features, benefits, experience
• Product segmentation is the division of product groups based on
common product elements: features, benefits, experience,
providing holistic landscape over major product benefits.

• The practice of segmentation requires MT visit, take-note. Do

interview with distributors, retailers, buyers to clarify hypothesis and
movement trend.
(5) Channel segmentation

• Learn channel natures, roles, shopping experience and retailers’ needs so as

to meet business objectives.

Product Listings In-store activities

This requires deep learning of This requires deep learning of
retailers’ needs & insights so that we channel natures & features so that
can sell suitable portfolio that we can design & run suitable
benefits retailers impactful in-store activities
Criteria of channel segmentation

Channel features • Understand how the channel is positioned

& expertise • What dominant channel identities

Retailer portfolio • Understand strength of portfolio

Shopper segments • Understand their profiles & shopping mission

Shopping
• Understand how shoppers experience the channel
experience
 Example: Ice-cream category
Convenience Highway resting Supermarket/
stores Grocery stores
station Mall

• Solve emergency • Solve emergency • Solve emergency & • A large entertainment

needs with service & essential needs in resting needs ecosystem integrated
Channel store utilities • Have place to rest, and with restaurants
various categories
feature & • Stores are modernly & toilet to use
• Small, unstructured
expertise trendily designed design stores
• Often update portfolio
& shopper promotions
• Majors in water & dry • Very strong in RTD & TRE,
Retailer • Very strong in RTD & • Very strong in RTD & dishes snacks, ice-cream as an
portfolio RTE categories RTE categories • RTD water & ice-cream important part of relaxed,
are important to self-pleasure experience
quence/snack

• Junior, senior, uni • Junior, senior, uni • Junior, senior, uni • Families with kids,
Shopper students, young office students, housewives students, young groups of friends,
segments workers, housewives with kids people, housewives colleagues
with kids with kids

Shopping • Take-away, in-store • Grab & go • Resting, use toilet, • Entertain, relax,
experience consumption short-time break, need resting
to recharge
 (6) Shopper segmentation
• Shoppers make purchase decision while Consumers benefit from the
brand/ product usage
• Shoppers & Consumers can be either the same person or not
⇒ Shopper Insights are different among various shoppers although they
make the same purchase for one consumer. Therefore, it’s very important
to understand Shopper Insights

Shopper Drivers: Consumer Drivers:

Shopping experience-based elements & Product experience-based elements &
customer experience after-sales services
Category: Beauty care
Channel: Beauty Box

1. Demographics: young, modern-style

Implications for in-store activities:
office workers, open, good income
● Use creative, fun, visuals,
2. Shopper mission: look for something
product display to trigger
new, fun, trendy rewards for herself
pleasant spirits
3. Shopper mode: explorative, relaxed, ● warm neutral lighting bring
eye-shopping, product trial, deal hunting relaxing atmosphere
● Make-up & product trial zone to
4. Shopper insight: impulse purchase,
entertain
willing to spend if feeling pleasant,
● Promotion deal highlighted
entertained
 Role of shopper segmentation:
• Each shopper segment may require different approach in retail context, so that
we can design suitable shopping experience to drive purchase behaviours

• Differentiate consumers and shoppers to understand different value drivers

• Shopper segmentation helps get deep analysis & hypothesis over important
shopper insights so as to design & run proper in-store activities.
BUYER DECISION PROCESS
Consumer behavior Customer journey 🡺 sales funnel
• People need to know and
understand there are solutions to
AWARENESS & ATTRACT their problems
“Hey – What is that?” • The company wants to attract the
specific group of people

• People get interested in the

solution & look for
INTEREST & ENGAGEMENT information and alternative
“Wow, that looks interesting” solutions
• The company wants to engage
with specific group of people

• People take decision to buy/

DECISION &
not buy
CONVERSION • The company wants to
“I would like to have this” stimulate the purchase

• People become loyal & repeat

RETAIN & REPEAT purchase of the same brand
“I’ll go ahead to get it” • The company wants to retain
customers & turn them into
evangelists
⇒ Altogether influence the whole customer journey
 Before purchase During shopping After purchase

CONSUMERS SHOPPER CONSUMERS

How to get the brand How to get the brand How to get the brand
into consumer’s need into shopper’s final into consumer’s re-
priority list? purchase? purchase choice?
Buying Problem Information Evaluation of Purchase Post-Purchase
Behaviour Type Recognition Search Alternatives Decision Behaviour

Complex Buying Clear and Extensive and Thorough Careful and well- Likely to experience
Behaviour conscious need active search comparison thought decision dissonance; seeks
among brands reassurance

Dissonance- Clear need, Limited Few perceived Quick decision May feel doubt or
Reducing Buying problem-solving information brand differences based on regret post-
Behaviour search convenience or purchase
price
Variety-Seeking Driven by Casual or mood- Quick Impulsive, Not brand loyal,
Buying curiosity or driven comparisons to exploratory continues
Behaviour boredom try something decision experimenting
new
Habitual Buying Habitual, No or minimal No deliberate Quick and Passive; no strong
Behaviour automatic search evaluation routine decision post-purchase
recognition evaluation
Consumers experience a brand in various touchpoints
• Customer experience is the totality of cognitive, affective, sensory, and behavioral
consumer responses during all stages of the consumption process including pre-
purchase, consumption, and post-purchase stages
• Focused platforms/ touchpoints – right & focused investment
• Values design – deliver suitable or exceptional values with purpose to customers
 2010 ~
Age of
1990 – 2010
Customers
Age of
Information
1960 – 1990
Age of
Distribution
- 1960s
Age of
Production
Omni-channel Management

• Omnichannel is a customer-centric approach in which all channels are integrated

so the customer has a unified and consistent experience whether they are at a
physical store, using an app, or on a website (McKinsey, 2022)
• Omni-channel Management: broad view over roles of each channel contributing
to total shopping journey
○ Strongly link all channels together, especially O2O (online to offline)
○ Well-planned channel management with reasonable KPI
○ Allocate resources suitably with suitable channel marketing activities by
channel
 Foundation of
Customer Experience
 Brand Touchpoint
The whatever brand management points customer interact with

PLATFORM TOUCHPOINT
● A channel is a customer contact ● Touchpoints represent any interaction the company may have
point, or a medium through which with current or potential customers that can be measured and
the firm and the customer interact recorded (Neslin et al., 2006).
(Neslin et al., 2006) ● Experience points designed to deliver values to customers
● Strategic engagement points require
long-term investment, operation and
innovation
Think strategic role Think value creation
 Foundation of Customer Experience – Example 1

Tourists finding
accommodation

Google Search Results showing up Google & Facebook ads targeting Browsing on Agoda website

Receiving Agoda cash Deciding to choose &

for writing review Staying experience Receiving booking confirmation
making online payment
 Foundation of Customer Experience – Example 1

Platform Strategic Role Touchpoint Value Creation

Get top recommended websites

Recommend credible
websites matched with
keywords

Convincing ads attract to view and

click
Targeting suitable
targets

• Impress with many booking

choices
• Impress with great images &
Selling pricing
• Great deals
• Good reviews
 Foundation of Customer Experience – Example 1

Platform Strategic Role Touchpoint Value Creation

Inform, remind, confirm, • Great headlines/ deals

re-selling attract to click

• Convincing ads attract to

Product experience
view and click
 BROAD VIEW:
• Helicopter
view get all
touchpoints
connected Attract customers & Shop assistant Large fitting room
as a whole impulse their consults customers with mirrors and
demand on size, categories… lights

TOUCHPOINT

DEEP VIEW:
• Detailed
look to
design great
values for
important
touchpoints How to attract How can we make How will we make
customers? customers want to customers buy the
try the outfit? products?
Popular platforms with strategic goals

Content Hub Media Event/ Workshop Offline Store

Online Store CRM & Sale Product

Support
Content Hub

Strategic roles
• Funnel attracting users, nurturing, closing sales deals &
encourage repeat purchase
• Contents are diverse in direction, creativity & formats
• Require resource investment: in-house team, agencies or
freelancers

Important touchpoints
• Content writings, images, videos offer various values:
Brand remind, product education, promotion
announcement, entertainment
• Interface offer trust & interest values: no of followers,
engagement, professionalism, video thumbnails
Content Hub

Banners create
professionalism

Content diversity -
Useful & interesting
content hub
 Content Hub

● Basic info offers

trust value
● Diversity useful &
interesting
content hub
● Content
thumbnails
encourage user
engagement
 Event/ Workshop/ Webinar

Strategic roles

• Platform to provide in-depth information or

entertainment
• Activities/ contents are creative & well-
prepared, able to get qualified leads
• Require heavy investment in new & creative
contents

Important touchpoints

• Activities: theme, process, people, ambience,

location
Media

Strategic roles
• Paid content (advertising, PR) to reach target
consumer groups of the brand
• Require media budget to book & air, in combination
with Media & Content Strategy
• Platforms provide detailed criteria of target consumer
group (demo, interest, behavior, lookalike)
• Drive specific behaviors: engagement, sales, provide
leads
Important touchpoints
• Activities: theme, process, people, ambience, location
Offline Store

Strategic roles
• Most important platform: Selling products
• Either owned stores or third party stores
• Owned stores: location rental, interior design, store concept,
sales consultants, operation, stock management, activities
• 3rd party store: less choice in product display, require
coordination with retailers to run channel activities

Important touchpoints
• Lighting, product display, sale consultant, POSM, aroma
• Channel activities: thematic merchandise, consulting service,
activation, promotions
Online Store

Strategic roles
Product image – impact
• Same principles as an offline store: visuals
merchandise, SKU listing, promotions,
product images, service, return policies
Deal- encourage impulse
• Require skillset of both offline (stock, purchase
customer service, shipping) & online
(media, set ads, analytics)

Shop rating – offer trust

Important touchpoints
• E-merchandise, banner, review, deal, Real evidence – boost trust
etc.,.
CRM & Sales Support

Email & SMS Chat & Hotline

Strategic roles Strategic roles

• Serve current customers • Serve current & potential customers

• Announce new news, promotion, new • Customer service people are trained &
product, booking following scripts to answer customer
• Simple management & operation but inquiry, handle requests/ complaints
impactful

Important touchpoints Important touchpoints

• Email: email title, top banner, key • Attitude, answer/ respond/ consult, images
message, images
• SMS: message, link
CRM & Sales Support

Key message - encourage to click

Message explanation - encourage to click

Chatbot software - Options are visualized

Chat script - indicate professionalism
Product Strategic roles
• The most basic foundation of brand building, strongly
requires superior in quality

Important touchpoints
• Design: Product appearance/ packaging plays important
role in convincing purchase & product experience
• Concept: The product theme often showed on
packaging/ communication helps to convince benefits or
trigger desire
• Feature: The substances make up the physical products,
the important ones often go with benefits offered to
customers
• Ritual: Interesting way of using the product, offering
greater product experience
Product

Up-down drinking ritual

Pack concept Feature design Convince
product benefits
Convince benefits & create trust
Customer Experience Management
5 Core Principles of CX Management
1. Customer Centric – Design, improve or redesign values based on
customer psychology, need and behavior
2. Managing high-risk touchpoints – Well-prepared solutions for
specially risky touchpoints
3. Performing high-standard service – Managing consistently high-
performing service across various platforms
4. Creative value design – Design exceptional value onto important
platform/ touchpoints
5. Technology Application – Increase customer value by applying
technology
Group exercise:
1. How do customers make purchasing decisions?
2. What online and offline touchpoints does the customer use to engage with the brand?
 Awareness Interest Consideration Purchase Post Purchase

Customer • View online • Conduct research • Research • Make a purchase • Make another
Action ad competitors • Receive product purchase
• See social • Compare features & • Contact • Share
media pricing customer service experience
campaign • Visit the stores • Read product &
• Ask for CS
reference documentation
• Make payment
Customer Website & App • Website • Advertisng (TVC, • Shorten waiting • Website,
touchpoints • Friendly UI, • Social media promotion time Forums, social
speedy & • Word of mouth campaign, OOH, • Point of media
convenient • Stores (coverage, fanpage purchase platforms,…
access location,…) livestream,…) • Payment • Call centers to
• Consulting • Advertisng (TVC, • Stores (coverage, methods identify
website rather promotion campaign, location,…) • Security staff,… customers
than sales OOH, fanpage • Convenient parking identity/ history
website livestream,…) areas
• Dedicated security
and staff
• Consulting desks
and environment

Customer Interested, Curious, Excited Excited Satisfied Satisfied

Experience hesitant Frustrated Somehow Loyal