Analyzing Consumer And Business Buying

Behavior

Objectives
How do consumer characteristics influence buying behavior?
What major psychological processes influence consumer responses to
the marketing program?
How do consumers make purchasing decisions?
How do marketers analyze consumer decision making?

Model of Consumer Buyer Behavior

7-4

Consumer Decision Process (CDP) Model

(Engell, Blackwell & Miniard)
INPUT

INFORMATION PROCESSING

DECISION PROCESS

Stimuli:
Marketer
Dominated
& Other

Attention
Comprehension

Internal
Search
Memory

Culture
Social Class
Personal
Family
Situation

Information
Search
Evaluation of
Alternatives

Acceptance

Purchase
Post-Purchase
Evaluation

Retention
External
Search

7-5

Environmental
Influences

Problem
Recognition

Exposure

Dissatisfaction

INFLUENCES

Individual
Differences

Resources
Motivation &
Involvement
Knowledge
Attitudes
Personality,Values
& Lifestyle

Satisfaction

Divestment

Influences on Decision Making Process

Personal Factors

Cultural Factors
Culture & Values
Sub culture
Social class

Social Factors
Reference groups
Opinion leaders
Family
7-6

Consumer
Decision-making
process

Gender
Age & Family
Life-cycle stage
Personality
Self concept
Lifestyle

Psychological factors
Perceptrion
Motivation
Learning
Beliefs & Attitudes

SEC GRID (old)

Illiterate

Education

Occupation

School up
to 4 yrs

School
5-9 yrs.

SSC/
HSC

SSC/ HSC
but not
graduate

Graduate/
postgraduate:
General

Graduate postgraduate:
Professional

Unskilled worker

E2

E2

E1

Skilled worker

E2

E1

B2

B2

Petty traders

E2

E1

B2

B2

Shop owners

B2

B1

A2

A2

None

B2

B1

A2

A2

A1

1-9

B2

B2

B1

A2

A1

A1

10+

B1

B1

A2

A2

A1

A1

A1

Self-employed/
professional

B2

B1

A2

A1

Clerical/
Salesman

B2

B1

B1

Supervisory level

B2

A2

A2

Officers/
Executives: Junior

--

B2

B1

A2

A2

Officers/Executives:
Middle/Senior

B1

B1

B1

B1

A2

A1

A1

Business/
Industrialist with no.
of employees

7-7

Chief Earner: Education (Q2)

THE
NEW
SEC
GRID
2011

Illiterat
e

Literate
but no
formal
schoolin
g/Schoolupto 4
years

None

E3

E2

E2

E2

E2

E1

D2

E2

E1

E1

E1

D2

D2

D2

E1

E1

D2

D2

D1

D1

D1

D2

D2

D1

D1

C2

C2

C2

D1

C2

C2

C1

C1

B2

B2

C2

C1

C1

B2

B1

B1

B1

C1

B2

B2

B1

A3

A3

A3

C1

B1

B1

A3

A3

A2

A2

B1

A3

A3

A3

A2

A2

A2

9+

B1

A3

A3

A2

A2

A1

A1

No. of
Durables
(TRANSFER
FROM Q1)

School 5
to 9 years

SSC/HSC

Some
College
(incl a
Diploma
but not
Grad)

Graduate/
Post
Graduate:
General

Graduate /
Post
Graduate:
Professiona
l

Influences on Decision Making Process

Personal Factors

Cultural Factors
Culture & Values
Sub culture
Social class

Social Factors
Reference groups
Opinion leaders
Family
7-9

Consumer
Decision-making
process

Gender
Age & Family
Life-cycle stage
Personality
Self concept
Lifestyle

Psychological factors
Perceptrion
Motivation
Learning
Beliefs & Attitudes

Behavior
changes
according to life
cycle stage

7-10

Indian Youth
Consumer Psychographics
Source- Marketing Whitebook 2003-04

Homebodies
Two-faced
Wannabes
Rebels
Cool guys

7-11

indian youth psychographics.ppt

Influences on Decision Making Process

Personal Factors

Cultural Factors
Culture & Values
Sub culture
Social class

Social Factors
Reference groups
Opinion leaders
Family
7-12

Consumer
Decision-making
process

Gender
Age & Family
Life-cycle stage
Personality
Self concept
Lifestyle

Psychological factors
Perception
Motivation
Learning
Beliefs & Attitudes

Motivation

7-13

Freuds
Theory

Maslows
Hierarchy
of Needs

Herzbergs
Two-Factor
Theory

Behavior
is guided by
subconscious
motivations

Behavior
is driven by
lowest,
unmet need

Behavior is
guided by
motivating
and hygiene
factors

Motivation

Maslows
Hierarchy of
Needs

7-14

7-15

7-16

7-17

7-18

7-19

7-20

7-21

Perception

Selective Attention

Selective Retention

Selective Distortion

Stages of the Buying Decision Process

Problem recognition
Information search
Evaluation of alternatives
Purchase decision
Post Purchase behaviour
7-23

Successive Sets Involved in

Customer Decision Making

7-24

Business Buying Behaviour

What is the business market, and how
does it differ from the consumer
market?
What buying situations do
organizational buyers face?
Who participates in the business-tobusiness buying process?
7-25

Characteristics of Business Markets

Fewer, larger buyers

Derived demand

Close supplier-customer

Inelastic demand

relationships
Professional purchasing
Many buying influences
Multiple sales calls

7-26

Fluctuating demand
Geographically

concentrated buyers
Direct purchasing

Buying Situation
Straight rebuy

Modified rebuy

New task

7-27

Purchase Decision Process

1Problem recognition
2 General need description

3 Product Specification

4 Supplier search

5 Proposal solicitation

6 Supplier selection

7 Order-routine specification

7-28

8 Performance review

Buygrid Framework :

Major Stages (Buyphases) of the Industrial Buying Process in Relation to

Major Buying Situations (Buyclasses)

7-29

Buyclasses
Buyphases

New
Task

Modified
Rebuy

Straight
rebuy

1Problem recognition

Yes

Maybe

No

2 General need description

Yes

Maybe

No

3 Product Specification

Yes

Yes

Yes

4 Supplier search

Yes

Maybe

No

5 Proposal solicitation

Yes

Maybe

No

6 Supplier selection

Yes

Maybe

No

7 Order-routine
specification

Yes

Maybe

No

8 Performance review

Yes

Yes

Yes

Decision Makers

Who are the

major
decision
participants?

7-30

What
decisions do
they
influence?

What is their
level of
influence?

What
evaluation
criteria do
they use?

The Buying Center

Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
7-31

Key Learnings

7-32

Key Learnings
Marketers need to understand and leverage both external stimuli

and consumer characteristics in order to influence consumer

behaviour

Each stage of the Consumer Decision Process is important and

marketers have to provide the relevant information, service,

imagery etc to help move from the awareness set to the choice set
and finally to purchase

In the post purchase stage also marketers can add value through

facilitating storage, usage, maintenance or even disposal.

7-33

Key Learnings
Focus of marketing strategy will vary with the type of

product/service and the level of consumer involvement.

For low involvement products availability and salience is
important
For utilitarian produts provision of information for decision
making is important
For Self Expressive products focus should be on congruency
between self concept and brand image

7-34

Key Learnings
Business marketers need to be aware of the environmental,

organisational, interpersonal and individual factors which affect

the decision making

Selling process must take into account different members of the

buying center

The approach to selling and relationship building with the buyer

will depend on the type of product/service and the buying

situation

7-35