Chapter 5

• Consumer behavior


  The study of how individuals, groups and organizations select, buy, use and dispose goods services, ideas or experiences to satisfy their needs and wants
• Marketers must fully understand both theory and reality of consumer behavior
• Consumers make many buying decisions every day
• Companies research consumer buying decisions in great detail to answer questions about what consumers buy, where they buy, how and how much they buy, when they buy and why they buy
• Factors influencing consumer buyer's behavior


  • Cultural
  • Social
  • Personal
• Culture


  A set of basic valves, Perception, wants and behaviors learned by a number of society from family and other important institutions
• Subculture


  A group of people with shared value systems based on common life experiences and situations
• Social class


  Relatively permanent and ordered divisions in a society whose members share similar values, interests and behaviors
• Small groups


  Influence consumer behavior
• Family


  Influence consumer behavior
• Social roles and status


  Influence consumer behavior
• Age and life cycle stage


  Consumer buying is shaped by the stage of the family life cycle
• Occupation


  Affects the goods and services bought
• Economic situation


  Affects product choice
• Lifestyle


  A person's pattern of living as expressed in his/her activities, interest and opinions
• Personality and self concept


  Influence buying behavior
• Motivation


  A motive is a need that is sufficiently pressing to direct the person to seek satisfaction
• Business market


  Consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others
• Characteristics of business markets


  • Fewer, larger buyers
  • Close supplier-customer relationship
  • Professional purchasing
  • Several buying influences
  • Multiple sales call
  • Derived demand
  • Inelastic demand
  • Fluctuation demand
  • Geographically concentrated buyers
  • Direct purchasing
• Straight rebuy


  Purchasing department reorders on a routine basis and chooses from suppliers on an "approved lists"
• Modified rebuy


  Buyer wants to modify product specifications, prices, delivery requirements, or other items
• New task


  Purchaser buys a product or service for the first time
• Participants in the business buying process


  • Initiators
  • Users
  • Influencers
  • Deciders
  • Approvers
  • Buyers
  • Gatekeepers
• Institutional market


  Provide for people in their care (schools, hospitals)
• Government market


  Major buyer of goods & services
• Government suppliers take the lowest bid
• Complex government projects are on a negotiated contract basis
• Government spending is subject to public review and considerable paperwork
• Cost is a major consideration for government purchases
• Suppliers need ways to cut through government red tape
• Some governments in Asia favor local companies and award contracts to them
• Government purchases can involve kickbacks and bribery
• Tying up with influential local businesses is an effective way to penetrate the government market