This document provides an overview of consumer buyer behavior and business buyer behavior. It defines key terms and concepts, describes models of consumer behavior like the stimulus-response model and characteristics that affect consumer behavior such as cultural, social, personal and psychological factors. It also outlines the stages in the consumer decision-making process and differences in buying behavior for new products versus established products. For business buyer behavior, it defines what constitutes a business market, compares business and consumer markets, and identifies major types of business buying situations.

1. Consumer Buyer
Behaviour

2. Definitions
• Cons ume r Buying Be ha vior
 Buying be ha vior of individua ls a nd
hous e holds tha t buy products for
pe rs ona l cons umption.
• Cons ume r Ma rke t
 All individua ls /hous e holds who buy
products for pe rs ona l cons umption.
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3. Model of
Consumer Behavior
• S timulus Re s pons e Mode l
 Ma rke ting a nd othe r s timuli e nte r the
buye r’s “bla ck box” a nd produce
ce rta in choice /purcha s e re s pons e s .
 Ma rke te rs mus t figure out wha t is
ins ide of the buye r’s “bla ck box” a nd
how s timuli a re cha nge d to
re s pons e s .
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4. Characteristics Affecting
Consumer Behavior
Key Factors • Culture
• S ubculture
• Cultura l  Re ligion
• So c ia l  Ethnic
• Pe rs o na l • S ocia l Cla s s
• Ps y c ho lo g ic a l  S ocio-e conomic cla s s
(S EC)
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5. Culture
The fundamental determinant of
a person’s wants and behaviors
acquired through socialization
processes with family
and other key institutions.
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6. Fast Facts About American
Culture
• The a ve ra ge Ame rica n
 che ws 300 s ticks of gum a ye a r
 goe s to the movie s 9 time s a ye a r
 ta ke s 4 trips pe r ye a r
 a tte nds a s porting e ve nt 7 time s
e a ch ye a r
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7. Characteristics Affecting
Consumer Behavior
Key Factors • Groups
 Me mbe rs hip
• Cultura l  Re fe re nce
 A p ira tio na l g ro up s
s
• So c ia l  Opinion le a de rs
• Pe rs o na l • Fa mily
 Childre n ca n influe nce
• Ps y c ho lo g ic a l • Role s a nd S ta tus
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8. Characteristics Affecting
Consumer Behavior
Key Factors • Age a nd life cycle
• Occupa tion
• Cultura l • Economic s itua tion
• Life s tyle
• So c ia l  Activitie s , inte re s ts , a nd
opinions
• Pe rs o na l  Life s tyle s e gme nta tion
• P e rs ona lity a nd s e lf-
• Ps y c ho lo g ic a l conce pt
 Bra nd pe rs ona lity
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9. Stages in the Family Life Cycle
1. Bachelor stage: Few financial burdens. Fashion opinion leaders.
Young, single, not living Recreation oriented. Buy: basic home equipment,
at home furniture, cars, equipment for the mating game;
vacations.
2. Newly married Highest purchase rate and highest average
couples: purchase of durables: cars, appliances, furniture,
Young, no children vacations.
3. Full nest I: Home purchasing at peak. Liquid assets low.
Youngest child under six Interested in new products, advertised products.
Buy: washers, dryers, TV, baby food, chest rubs
and cough medicines, vitamins, dolls, skates.
4. Full nest II: Financial position better. Less influenced by
Youngest child six or over advertising. Buy larger-size packages, multiple-unit
deals. Buy: many foods, cleaning materials,
bicycles, music lessons, pianos.
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10. Characteristics Affecting
Consumer Behavior
Brand Personality Dimensions
• S ince rity • Excite me nt
• Rugge dne s s • Compe te nce
• S ophis tica tion
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11. Characteristics Affecting
Consumer Behavior
Key Factors • Motiva tion
 Ne e ds provide motive s for
cons ume r be ha vior
• Cultura l  Motiva tion re s e a rch
 Ma s low’s hie ra rchy of ne e ds
• So c ia l • P e rce ption
 S e le ctive a tte ntion, s e le ctive
dis tortion, s e le ctive re te ntion
• Pe rs o na l • Le a rning
 Drive s , s timuli, cue s ,
• Ps y c ho lo g ic a l re s pons e s a nd re inforce me nt
• Be lie fs a nd a ttitude s
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12. Characteristics Affecting
Consumer Behavior
Maslow’s Hierarchy of Needs
S e lf-a ctua liza tion
Es te e m Ne e ds
S ocia l Ne e ds
S a fe ty Ne e ds
P hys iologica l Ne e ds
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13. Types of Buying-Decision Behavior
Diffe re nc e I lve m e nt Le ve l
nvo
be twe e n bra nd s High Low
S ignifica nt Com plex Variety-seeking
Diffe re nce s buying behavior buying behavior
Dissonance- Habitual buying
Fe w
Diffe re nce s reducing buying behavior
behavior
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14. The Buyer Decision
Process
• Five S ta ge s :
 Ne e d re cognition
 Informa tion s e a rch
 Eva lua tion of a lte rna tive s
 P urcha s e de cis ion
 P os tpurcha s e be ha vior
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15. The Buyer Decision
Process
Process Stages • Ne e ds ca n be
trigge re d by:
• N e d re c o g nitio n
e  Inte rna l s timuli
• I rm a tio n s e a rc h
nfo  N rm a l ne e d s
o be c o m e
• Ev a lua tio n o f a lte rna tive s s tro ng e no ug h to d riv e
be ha vio r
• Purc ha s e d e c is io n
 Exte rna l s timuli
• Po s tp urc ha s e be ha vio r  A v e rtis e m e nts
d
 Frie nd s o f frie nd s
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16. The Buyer Decision
Process
Process Stages • Cons ume rs e xhibit
he ighte ne d a tte ntion or
• N e d re c o g nitio n
e a ctive ly s e a rch for
• I rm a tio n s e a rc h informa tion.
nfo
• Ev a lua tio n o f a lte rna tive s • S ource s of informa tion:
 P e rs ona l
• Purc ha s e d e c is io n
 Comme rcia l
• Po s tp urc ha s e be ha vio r  P ublic
 Expe rie ntia l
• Word-of-mouth
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17. Successive Sets Involved in Customer Decision
Making
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18. The Buyer Decision
Process
Process Stages • Eva lua tion proce dure
de pe nds on the cons ume r
a nd the buying s itua tion.
• N e d re c o g nitio n
e
• Mos t buye rs e va lua te
• I rm a tio n s e a rc h
nfo
multiple a ttribute s , e a ch of
• Ev a lua tio n o f a lte rna tive s which is we ighte d
• Purc ha s e d e c is io n diffe re ntly.
• Po s tp urc ha s e be ha vio r • At the e nd of the e va lua tion
s ta ge , purcha s e inte ntions
a re forme d.
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19. The Buyer Decision
Process
Process Stages • Two fa ctors inte rce de
be twe e n purcha s e
• N e d re c o g nitio n
e inte ntions a nd the
• I rm a tio n s e a rc h
nfo a ctua l de cis ion:
• Ev a lua tio n o f a lte rna tive s  Attitude s of othe rs
• Purc ha s e d e c is io n  Une xpe cte d
• Po s tp urc ha s e be ha vio r s itua tiona l fa ctors
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20. The Buyer Decision
Process
Process Stages • S a tis fa ction is importa nt:
 De lighte d cons ume rs
e nga ge in pos itive word-
• N e d re c o g nitio n
e of-mouth.
• I rm a tio n s e a rc h
nfo  Unha ppy cus tome rs te ll on
a ve ra ge 11 othe r pe ople .
• Ev a lua tio n o f a lte rna tive s  It cos ts more to a ttra ct a
• Purc ha s e d e c is io n ne w cus tome r tha n it doe s
to re ta in a n e xis ting
• Po s tp urc ha s e be ha vio r cus tome r.
• Cognitive dis s ona nce is
common
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21. Buyer Decision Process
for New Products
• Ne w P roducts
 Good, s e rvice or ide a tha t is
pe rce ive d by cus tome rs a s ne w.
• S ta ge s in the Adoption P roce s s
 Ma rke te rs s hould he lp cons ume rs
move through the s e s ta ge s .
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22. Buyer Decision Process
for New Products
Stages in the Adoption Process
• Awa re ne s s • Inte re s t
• Eva lua tion • Tria l
• Adoption
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23. Buyer Decision Process
for New Products
• Individua l Diffe re nce s in
Innova tive ne s s
 Cons ume rs ca n be cla s s ifie d into five
a dopte r ca te gorie s , e a ch of which
be ha ve s diffe re ntly towa rd ne w
products .
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24. Buyer Decision Process
for New Products
Adopter Categories
• Innova tors • Ea rly Adopte rs
 Enthus ia s ts  Opinion le a de rs
• Ea rly Ma jority • La te Ma jority
 P ra gma tis ts  Cons e rva tive s
• La gga rds
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25. Business Buyer Behavior

26. Definition
• Bus ine s s Buye r Be ha vior:
 The buying be ha vior of
orga niza tions tha t buy goods a nd
s e rvice s for us e in the production of
othe r products a nd s e rvice s or for
the purpos e of re s e lling or re nting
the m to othe rs a t a profit.
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27. Business Markets
• Cha ra cte ris tics of Bus ine s s
Ma rke ts
 S a le s in the bus ine s s ma rke t fa r e xce e d
s a le s in cons ume r ma rke ts .
 Bus ine s s ma rke ts diffe r from cons ume r
ma rke ts in ma ny wa ys .
 M rke ting
a s truc ture a nd d e m a nd
 N ture o f the buy ing unit
a
 Ty p e s o f d e c is io ns a nd the d e c is io n p ro c e s s
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28. Business Markets
Characteristics • Compa re d to
cons ume r ma rke ts :
• M rke ting Struc ture
a  Bus ine s s ma rke ts
 ha ve fe we r but la rg e r
a nd De m a nd c us to m e rs
• N ture o f the
a  Bus ine s s cus tome rs
 a re m o re g e o g ra p hic a lly
Buy ing Unit c o nc e ntra te d
• Ty p e s o f De c is io ns  De ma nd is diffe re nt
 De m a nd is d e rive d
a nd the De c is io n  De m a nd is p ric e ine la s tic
Pro c e s s  De m a nd fluc tua te s m o re ,
a nd c ha ng e s m o re q uic kly
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29. Business Markets
Characteristics • Compa re d to
cons ume r purcha s e s :
• M rke ting Struc ture
a  Bus ine s s purcha s e s
a nd De m a nd involve more buye rs
in the de cis ion
• N ture o f the
a proce s s .
Buy ing Unit  P urcha s ing e fforts a re
• Ty p e s o f De c is io ns unde rta ke n by
a nd the De c is io n profe s s iona l buye rs .
Pro c e s s
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30. Business Markets
Characteristics • Compa re d to
cons ume r purcha s e s :
• M rke ting Struc ture
a  Bus ine s s buye rs fa ce
a nd De m a nd more comple x buying
de cis ions .
• N ture o f the
a
 The buying proce s s is
Buy ing Unit more forma lize d.
• Ty p e s o f De c is io ns  Buye rs a nd s e lle rs
a nd the De c is io n work more clos e ly
Pro c e s s toge the r a nd build
long-te rm
re la tions hips . 6 - 30

31. Business Buyer Behavior
• Ma jor Type s of Buying S itua tions
 S tra ight re buy
 Re o rd e ring witho ut m o d ific a tio n
 Modifie d re buy
 Re q uire s m o d ific a tio n to p rio r
p urc ha s e
 Ne w ta s k
 Firs t-tim e p urc ha s e
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32. Business Buyer Behavior
Participants in the
Business Buying Process
• Initia tors • Influe nce rs
• Us e rs • De cide rs
• Buye rs • Approve rs
• Ga te ke e pe rs
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33. Major Influences on Busi.
Buyers’ decisions
Key Factors • Economic tre nds
• S upply conditions
• Enviro nm e nta l • Te chnologica l
• O rg a niz a tio na l cha nge
• Re gula tory a nd
• I rp e rs o na l
nte politica l e nvironme nts
• I ivid ua l
nd • Compe titive
de ve lopme nts
• Culture a nd cus toms
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34. Major Influences on Busi.
Buyers’ decisions
Key Factors • Obje ctive s
• P olicie s
• Enviro nm e nta l
• P roce dure s
• O rg a niz a tio na l
• Orga niza tiona l
• I rp e rs o na l
nte s tructure
• I ivid ua l
nd • S ys te ms
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35. Major Influences on Busi.
Buyers’ decisions
Key Factors • Authority
• Enviro nm e nta l • S ta tus
• O rg a niz a tio na l • Empa thy
• I rp e rs o na l • P e rs ua s ive ne s s
nte
• I ivid ua l
nd
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36. Major Influences on Busi.
Buyers’ decisions
Key Factors • Authority
• Age
• Enviro nm e nta l
• Educa tion
• O rg a niz a tio na l
• J ob pos ition
• I rp e rs o na l
nte • P e rs ona lity
• I ivid ua l
nd • Ris k a ttitude s
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37. Business Buying Process
• Eight S ta ge s :
 S ta ge 1: P roble m Re cognition
 S ta ge 2: Ge ne ra l Ne e d De s cription
 S ta ge 3: P roduct S pe cifica tion
 Va lue a na ly s is he lp s to re d uc e c o s ts
 S ta ge 4: S upplie r S e a rch
 Sup p lie r d e ve lo p m e nt
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38. Business Buying Process
• Eight S ta ge s :
 S ta ge 5: P ropos a l S olicita tion
 S ta ge 6: S upplie r S e le ction
 S ta ge 7: Orde r-Routine
S pe cifica tion
 Bla nke t c o ntra c ts a re o fte n us e d fo r
m a inte na nc e , re p a ir a nd o p e ra ting
ite m s .
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39. Business Buying Process
• Bus ine s s Buying on the Inte rne t
 E-procure me nt is growing ra pidly.
 Re ve rs e a uctions
 E-procure me nt offe rs ma ny be ne fits :
 A c e s s to ne w s up p lie rs
c
 Lo we r p urc ha s ing c o s ts
 Quic ke r o rd e r p ro c e s s ing a nd d e live ry
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40. Institutional and
Government Markets
• Ins titutiona l Ma rke ts
 Cons is t of s chools , hos pita ls , a nd
othe r ins titutions tha t provide goods
a nd s e rvice s to pe ople in the ir ca re .
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41. Institutional and
Government Markets
• Ins titutiona l Ma rke ts
 Ofte n cha ra cte rize d by low budge ts
a nd ca ptive pa trons .
 Ma rke te rs ma y de ve lop s e pa ra te
divis ions a nd ma rke ting mixe s to
s e rvice ins titutiona l ma rke ts .
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42. Institutional and
Government Markets
• Gove rnme nt Ma rke ts
 Gove rnme nta l units – ce ntra l, s ta te ,
a nd loca l – tha t purcha s e or re nt
goods a nd s e rvice s for ca rrying out
the ma in functions of gove rnme nt.
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43. Institutional and
Government Markets
• Gove rnme nt Ma rke ts
 Gove rnme nt buye rs ofte n fa vor:
 De p re s s e d bus ine s s firm s a nd a re a s
 Sm a ll bus ine s s e s
 M rity -o wne d bus ine s s e s
ino
 Firm s whic h p ra c tic e no n-
d is c rim ina to ry p ra c tic e s
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44. Institutional and
Government Markets
• Gove rnme nt Ma rke ts
 Mos t firms tha t s e ll to gove rnme nt
buye rs a re not ma rke ting orie nte d.
 S ome compa nie s ha ve s e pa ra te
gove rnme nt ma rke ting de pa rtme nts .
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45. Factors considered by
Indian Industry
• Continuous & re lia ble product
pe rforma nce
• Gua ra nte e d de live ry
• Te chnology fit
• P rice
• S e rvice
• Compa ny s a le s force
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