CUSTOMER ANALYSIS

BUYING BEHAVIOR OF
CONSUMERS
ORGANIZATIONAL BUYER
BEHAVIOR
 Learning Objectives
•Learn the consumer market and
construct model of consumer buyer
behavior
•Know the four factors that influence buyer
behavior
•Understand the types of buying decision
behavior and stages in the process
•Understanding of organisational buyers
 RISE OF CONSUMER
DEMOCRACY
There has been a seismic change in the
consumer markets in the past two decades
which has been aptly described as the “rise
of consumer democracy”.
Suddenly, due to a number of factors, most
notably technology and the development of
global markets, consumers have more
choices than ever before.
So marketers have to work harder to make
sure that consumer choose their products.
STUDY OF CONSUMER BEHAVIOUR
The marketer should approach the study of a
new market by asking 4 questions :
1. What does the market buy ? Objects Of
Purchase
2. Why does it buy ? Objectives of
purchase
3. Who buys ? Organization of purchase
4. How does it buy ? Operations of
purchasing organization
( FOUR Os OF A MARKET )
 6 Os OF A MARKET
The 4 Os of a market (Objects, Objectives,
Organization and Operations) should be
grasped before one contemplates the 4 Ps
of the marketing mix.
Two further questions of a more
descriptive nature can also be asked of a
market :
5.When does it buy ? Occasions for
purchase
6. Where does it buy ? Outlets for purchase
 CONSUMER MARKET
Consumer Market is the market for
products and services that are
purchased or hired by individuals
and households for personal (non-
business) use.
Consumer Products : Products
purchased for personal use.
 CLASSIFICATION OF CONSUMER
PRODUCTS
(A.) On the basis of their rate of consumption
and tangibility :
DURABLE GOODS (Tangible goods which
normally survive many uses, frequency of
purchase is less)
NON-DURABLE GOODS (Tangible goods
normally are consumed in one or few uses,
frequency of purchase is more)
SERVICES (Intangibles, Activities, benefits or
satisfactions which are offered for sale )
 CLASSIFICATION OF CONSUMER
PRODUCTS
(B.) On the basis of consumers’
shopping habits :
CONVENIENCE GOODS (Which the
customers usually purchase more frequently,
immediately and with the minimum of efforts
in comparing and buying)
SHOPPING GOODS (Which the customers,
in the process of selection and purchase
characteristically compares on such basis as
suitability, price and style, quality , durability
SPECIALITY GOODS (Goods with unique
characteristics and/or brand identification for
which buyers are willing to make a special
purchasing effort)
 Stimulus-Response Model of
Consumer Behavior

Stimuli Buyer’s Black Box Buyer Response

4P’s Buyer characteristics Product choice
Other characteristics Buyer decision process Brand choice
economic Dealer choice
technological Purchase timing
political Purchase amount
cultural
 MODEL OF BUYER BEHAVIOUR

Inferences
Buyer’s Decisions
Marketing Other Buyer’s Buyer’s Decision
Stimuli Stimuli Characteristics Process

ECONOMICAL
PRODUCT
CULTURAL PROBLEM
RECOGNITION
BRAND CHOICE
GEOGRAP
PRICE INFORMATION
HICAL SOCIAL
SEARCH
DEALER CHOICE
PLACE
TECHNOLO PERSONAL
EVALUATION
GICAL

PSYCHOLOGICAL DECISION
PROMOTION
POST PURCHASE AMOUNT
PURCHASE
BEHAVIOUR

BUYER’S BLACK BOX

INPUT PROCESS OUTPUT

FACTORS INFLUENCING BUYER’S
BEHAVIOUR

CULTURAL

SOCIAL
PERSONAL
CULTURE REFERENCE PSYCHOLOGICAL
GROUPS AGE,GENDER,LIFE
Buyer
SUB-CULTURE FAMILY CYCLE STAGE, MOTIVATION,PERC-
OCCUPATION, EPTION,LEARNING,
BELIEF & ATTITUDE
ROLES AND INCOME, PERSONALITY
STATUS
SOCIAL CLASS
 (A.) CULTURAL FACTORS
CULTURE: All aspects of society. It includes
Values, Customs, Arts and Skills.
Transmitted from generation to generation.
SUB-CULTURE: Each culture contains
smaller groups of sub-cultures- Nationality,
Religion, Race, Geographical location.
SOCIAL CLASS: In every society there is
inequality in social status among different
people and the people are categorized into
different social classes.
 B) Social Factors
Reference Group- Aspirational, dissociate
Family-
Family of Orientation (One’s parents, brothers
and sisters)
Family of Procreation (One’s spouse and
children)

ROLES AND STATUS:

(Role of a manager carries more status
than role of clerk and his status).
(C.) PERSONAL FACTORS
AGE
GENDER
LIFE CYCLE STAGE ***
OCCUPATION
INCOME
LIFE STYLE
PERSONALITY etc.
 (D.) Psychological Factors
Motivation
A motive is a need that is sufficiently
pressing to direct the person to seek
satisfaction
Motivation research is based on Freud;
Looks for hidden and subconscious
motivation
Maslow ordered needs based on how
pressing they are to the consumer
Psychological Factors- Perception
Perception is the process by which people
select, organize, and interpret information
Perception Includes:
 Selective attention
Consumers screen out information
 Selective distortion
People interpret to support beliefs
 Selective retention
People retain points to support attitudes
Psychological Factors- Learning
Learning describes changes in an individual’s
behavior arising from experience
Learning occurs through:
 Drives
Internal stimulus that calls for action
 Stimuli
Objects that move drive to motive
 Cues
Minor stimuli that affect response

Reinforcement
Feedback on action
Psychological Factors- Beliefs and
Attitudes
Belief
 a descriptive thought about a brand or service
 may be based on real knowledge, opinion, or
faith
Attitude

describes a person’s evaluations, feelings and
tendencies toward an object or idea
 They are difficult to change
THE BUYING DECISION PROCESS

Marketers have to go beyond the various

influences on buyers and develop an
understanding of how consumers actually
make their buying decisions. Specifically,
marketers must identify who makes the
buying decision (buying roles), the types of
buying decisions (buying behavior / buying
situations) and the steps in buying process
( stages in the buying decision process).
FOUR TYPES OF BUYING BEHAVIOR
(BUYING SITUATIONS)

High Involvement Low Involvement

Significant Complex buying behavior

Differences Variety-seeking buying
(Extensive Problem behavior
between Solving)
Brands
Few Dissonance reducing Habitual buying behavior
Differences buying behavior (Routinized Response
between (Limited Problem Behavior)
Brands Solving)
 FIVE STAGE MODEL OF THE
CONSUMER BUYING PROCESS

Problem Information Evaluation of

recognition search alternatives

Post-purchase Purchase
behavior decision
 The Buyer Decision Process
Need Recognition Information Search

Needs can be triggered by: Consumers exhibit heightened

 Internal stimuli attention or actively search for
Normal needs information.
become strong •Sources of information:
enough to drive Personal
behavior Commercial
 External stimuli Public
Advertisements Experiential
Friends of friends •Word-of-mouth
 The Buyer Decision Process
Evaluation of alternatives Purchase Decision
Evaluation procedure
depends on the Two factors intercede between
consumer and the buying purchase intentions and the
situation. actual decision:
Most buyers evaluate •Attitudes of others
multiple attributes, each •Unexpected situational
of which is weighted factors
differently.
At the end of the
evaluation stage,
purchase intentions are
formed.
 STEPS BETWEEN EVALUATION OF
ALTERNATIVES AND A PURCHASE
DECISION

Attitude
of others
Purchase
Evaluation of Purchase Decision
alternatives intention
Unanticipated
situational
factors
The Buyer Decision Process
Post-purchase Behaviour
Satisfaction is important:
 Delighted consumers engage in positive

word-of-mouth.
 Unhappy customers tell on average 11 other

people.

It costs more to attract a new customer than it
does to retain an existing customer.
Cognitive dissonance is common
THE NATURE OF ORGANIZATIONAL
BUYING
Organization buying is in some ways
similar to consumer buying since it is
not “organizations” making the buying
decisions but people within those
organizations. But there are significant
differences that must be understood by
marketers in order to succeed in the
organizational market.
Organizational Buyers Versus
Final Consumers
The major variations are observed in :
- Market structure and demand
- Buyer characteristics and
- Decision processes and Buying
patterns
 MARKET STRUCTURE AND DEMAND

1.Geographical Concentration
2.Buyers’ Sizes
3.Vertical or Horizontal Markets
4.Derived Demand
5. Inelastic Demand
6. Fluctuating Demand
 BUYER CHARACTERISTICS

(a) Group Involvement : Products purchased by

organizational buyers are often costly and complex, a
group of individuals may be involved in the decision.
(b) Technical Knowledge : Generally technically
competent individuals are involved in purchase
decisions.
(c) Rational Motivations : Organizational buyers are
often strongly directed by rational motivations, costs
and benefits are carefully weighed. (Sometimes
organizational buyers are also influenced by emotional
motivations, but these are difficult to assess)
 DECISION PROCESS AND BUYING
PATTERNS
(a) Formality (greater formalities)
(b) Complexity (decision making is much complex)
(c) Lengthy Negotiation
(d) Multiple Suppliers
(e) Large Orders
(f) Infrequent Purchase (some items are purchased only
once, some annually, some quarterly, and some
monthly- based on their requirements and costs etc.)
(g) Direct Buying
(h) Reciprocity (two organizations agree to purchase from
each other ; for example, an auto company may buy
steel from one supplier and that supplier buys trucks
from the automotive firm)
(i) Importance of Service
Types of Decision Situations

1.New Task Situation

2. Modified Rebuy Situation
3. Straight Rebuy Situation
 The Organizational Buyer’s
Decision Process
1.Problem Recognition
2. Need Description
3. Product Specification
4. Vendor Search
5. Proposal Request
6. Vendor Selection
7. Purchase Routine Selection
8. Post-purchase Evaluation
ATTRIBUTES USED TO EVALUATE SUPPLIERS

1. Overall reputation of the supplier

2. Financing terms
3. Supplier’s flexibility in adjusting to your
company’s needs
4. Experience with the supplier in analogous
situations
5. Technical service offered
6. Confidence in the sales people
7. Convenience of placing the order
8. Data on reliability of the product
ATTRIBUTES USED TO EVALUATE SUPPLIERS

9. Price
10. Technical specifications
11. Ease of operation or use
12. Preferences of principal user of the product
13. Training offered by the supplier
14. Training time required
15. Reliability of delivery date promised
16. Ease of maintenance
17. Sales service expected after date of
purchase