Chapter four
Identifying the market
Consumer and business
Markets Buyer Behavior
Brain storming question
What is business and consumer market
?
What makes them to be different?
2
Types Of Markets
1) Consumer Market: Purchasers and household members who intend to consume or
benefit from the purchased products and do not buy products to make products.
2) Business Mkt :goods or services purchased for use either directly or indirectly in
the production of other goods and services for resale
Consumer Markets and consumer Buyer
Behavior
Definition:
Consumer buyer behavior refers to the
buying behavior of final consumers –
individuals and households who buy
goods and services for personal
consumption
All of these final consumers combine
to make up the consumer market
4
Cont’d
question for marketers is:
“The central question for marketers is:
How do consumers respond to various marketing
efforts the company might use?
5
Model of Buyer Behavior
cont’d…
What is your understanding about the picture
?
7
Factors Influencing Consumer Behaviour
Cultural
Social
Personal
Age and Psycho-
Culture Reference life-cycle logical
groups Motivation
Occupation
Sub- Economic Perception Buyer
culture Family situation Learning
Lifestyle Beliefs and
Roles attitudes
Social Personality
and and
class status self-concept
Question
Read how these factors affect the
consumer buying decision?
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The
The Buyer
Buyer Decision
Decision Process
Process
Need
NeedRecognition
Recognition
Information
InformationSearch
Search
Evaluation
Evaluationof
ofAlternatives
Alternatives
Purchase
PurchaseDecision
Decision
Postpurchase
PostpurchaseBehavior
Behavior
Step
Step 1.
1. Need
Need Recognition
Recognition
Need
NeedRecognition
Recognition
Buyer
BuyerRecognizes
RecognizesaaProblem
ProblemororNeed
Need
Needs
Needscan
canbe
betriggered
triggeredby:
by:
Internal
InternalStimuli
Stimuli External
ExternalStimuli
Stimuli
••Hunger
Hunger ••TV
TVadvertising
advertising
••Thirst
Thirst
••AAperson’s ••Magazine
Magazinead ad
person’snormal
normalneeds
needs ••Radio
Radioslogan
slogan
••Stimuli
Stimuliin
inthe
theenvironment
environment
Step 2. Information Search
Personal •Family, friends, neighbors
Personal Sources
Sources •Most effective source of
information
Commercial •Advertising, salespeople
Commercial Sources
Sources •Receives most information
from these sources
Public •Mass Media
Public Sources
Sources •Consumer-rating groups
•Handling the product
Experiential
Experiential Sources
Sources •Examining the product
•Using the product
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Step 3. Evaluation of Alternatives
Consumer
Consumer MayMay Use
Use Careful
Careful
Calculations
Calculations && Logical
Logical Thinking
Thinking
Consumers
Consumers May
May Make
Make Buying
Buying Decisions
Decisions
on
on Their
Their Own.
Own.
Consumers
Consumers May
May Make
Make Buying
Buying Decisions
Decisions
Only
Only After
After Consulting Others..
Consulting Others
Marketers Must Study Buyers to Find Out
How They Evaluate Brand Alternatives 13
Step 4. Purchase Decision
Purchase
PurchaseIntention
Intention
Desire
Desireto
tobuy
buythe
themost
mostpreferred
preferredbrand
brand
Unexpected
Attitudes Situational
of Factors
Others
Purchase
PurchaseDecision
Decision
Step
Step 5.
5. Post
Post purchase
purchase
Behaviour
Behaviour
Consumer’s
Consumer’sExpectations
Expectationsof
of
Product’s
Product’sPerformance
Performance
Product’s
Product’sPerceived
PerceivedPerformance
Performance
Satisfied
SatisfiedCustomer!
Customer! Dissatisfied
DissatisfiedCustomer
Customer
Part 2 Business Market and Business buying
Behavior
Definition: “Business Marketing is the practice of
individuals, or organizations, including commercial
businesses, governments and institutions, facilitating
the sale of their products or services to other
companies or organizations that in turn resell them,
use them as components in products or services they
offer, or use them to support their operations”
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Business Markets
Characteristics Compared to
consumer markets:
Business markets
have fewer but larger
Marketing Structure and quantity purchasers
Demand Business customers
Nature of the are more geographically
concentrated
Buying Unit Demand is different
Types of Decisions and the Demand is derived/direct
Decision Process Demand is price inelastic
in short run
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Goal 1: Define the business market
Business Markets
Characteristics Compared to consumer
purchases:
Marketing Structure and Involve more buyers in the
Demand decision process
Nature of the More professional
purchasing effort
Buying Unit
Types of Decisions and
the Decision Process
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Goal 1: Define the business market
Business Markets
Characteristics Compared to consumer
purchases
More complex buying
Marketing Structure and decisions
Demand The buying process is more
Nature of the formalized
Buying Unit Buyers and sellers work more
Types of Decisions and closely together and build
the Decision Process long-term relationships
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Goal 1: Define the business market
Stages in the Business Buying Process
Stage 1: Problem Recognition
Stage 2: General Need Description
Stage 3: Product Specification
Value analysis helps to reduce costs
Stage 4: Supplier Search
Supplier development
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Goal 3: List and define the steps in the business buying decision process
Cont’d…
Stage 5: Proposal Solicitation
The buyer is ready to invite qualified suppliers
to submit proposals.
When the item is complex or expensive, the
buyer will require a detailed written proposal
from each qualified supplier.
After evaluating the proposals, the buyer will invite a
few suppliers to make formal presentations.
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Goal 3: List and define the steps in the business buying decision process
Cont’d…
Stage 6: Supplier Selection
They will be selected based on product reliability
and service reliability
Stage 7: Order-Routine Specification
The buyer negotiates the final order, listing the
technical specifications, the quantity needed, the
delivery schedule, and so on
Blanket contracts are often used for maintenance,
repair and operating items(MRO).
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Cont’d…
Stage 8: Performance Review
The buyer periodically reviews the performance of the chosen
Supplier(s).
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Major Types of Buying Situations
There are three major types of buying situations.
At one extreme is the straight rebuy, which is a fairly
routine decision.
At the other extreme is the new task, which may call for
thorough research.
In such cases, the greater the cost or risk, the larger the
number of decision participants and the greater their
efforts to collect information will be.
In the middle is the modified rebuy, which requires
some research.
In a straight rebuy the buyer reorders something
without any modifications.
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Cont’d
Inthe case of modified rebuy, in suppliers
may become nervous and feel pressured to
put their best foot forward to 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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Participants in BM & Their Roles
Major Influences on Business
Buyers
Key Factors Economic trends
Supply conditions
Environmental Technological, political and
competitive changes
Organizational Culture and customs
Interpersonal
Individual
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Goal 2: Identify the major factors that influence business buyer behavior
Major Influences on Business
Buyers
Key Factors Objectives
Policies
Environmental Procedures
Organizational Organizational
Interpersonal structure
Individual Systems
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Goal 2: Identify the major factors that influence business buyer behavior
Major Influences on Business
Buyers
Key Factors Influence of members
in the buying center
Environmental Authority
Status
Organizational Empathy
Interpersonal Persuasiveness
Individual
6 - 29
Goal 2: Identify the major factors that influence business buyer behavior
Major Influences on Business
Buyers
Key Factors Personal characteristics of
members in the buying center
Age and income
Environmental Education
Job position
Organizational Personality
Risk attitudes
Interpersonal Buying styles
Individual
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Goal 2: Identify the major factors that influence business buyer behavior
Cont’d…
Thank you
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