Foundations of Marketing

David Jobber and John Fahy

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Chapter 3 Understanding Customer Behaviour

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Customer Types
Private Consumers Organisational Customers

Purchase:

Purchase:

For personal or household use

For use in the operation of a business or organisation. To manufacture other products For resale to others

CONSUMER PRODUCT
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ORGANISATIONAL PRODUCT

Understanding Customers
Who is important? What are their choice criteria?

How do they buy?

Customers

Where do they buy?

When do they buy?

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Who Buys? The Buying Decision Making Process

Buyer Decider (Decision Maker) Gatekeeper

User Initiator

Influencer

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Phillips Juicer

Advertisement clearly targets parents of young children who are concerned about their nutrition and health

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How do they buy? The Consumer Decision-Making Process

Need recognition/problem awareness Information Search

Evaluation of alternatives Purchase

Post-purchase evaluation
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How do they buy? The Organizational Decision-Making Process

Recognition of a problem (need) Determination of specification and quantity of needed item Search for and qualification of potential sources Acquisition and analysis of proposals Evaluation of proposals and selection of supplier(s)

Selection of an order routine

Performance feedback and evaluation

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Choice Criteria Used When Evaluating Alternatives

SocialStatus Social belonging Convention Fashion

TechnicalReliability Durability Performance Style/looks Comfort Delivery Convenience Taste

PersonalEconomicPrice Value for money Residual value Life style costs Self image Morals Emotions

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Bang & Olufsen

Advertisement provides Highlights both rational and emotional factors likely to influence purchase

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Influences on consumer purchasing behavior

The buying situation
Personal influences Social influences

information processing motivation beliefs and attitudes personality lifestyle lifecycle

Consumer

culture social class geodemographics reference groups

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Bravia Campaign

Advertisement Demonstrates the visual power of colour and conveys the key brand proposition

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Behavioural Learning Theories:

Classical conditioning: is the process of using an established relationship between a stimulus and a response to cause learning Operant conditioning:

individual respond to the stimulus that offers the most satisfactory rewards and subsequently the behaviour is repeated. The more rewarding the response, the more likelihood of a repeat purchase
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Behavioural Theories and Marketing

Classical conditioning uses an established relationship between stimulus and response to cause learning
In advertising humour is known to elicit a pleasant response and is used in the belief that these pleasant feeling will be a condition of the product.

Operant conditioning is reinforcement through rewards

The use of free samples is based on these principles

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Red Bull

Advertisement uses humour to appeal to its target market of young adults

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Maslow 5 categories of motivation:

1. 2. 3. 4. 5.

Physiological Safety Belongingness and love Self-actualisation Esteem and status

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Influences on Organizational Purchasing Behaviour

Buy class
straight re-buy modified re-buy new task

Product type
product constituents product facilities MROs

Organizational buyer

Importance of purchase
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Product Types in Organisational Buying: Plant & equipment Components

Products & Services

Materials
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Developments in Organizational Purchasing Practice

Just-in-time purchasing Online purchasing Centralised purchasing Relationship Marketing Reverse marketing Leasing

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Chapter Summary
There are key differences between consumer and organizational buying. There are 5 roles in the buying decision making group: initiator, influencer, decider, buyer, user. The level of involvement is a purchase situation will affect the number of stages a consumer goes through before making a purchase decision. In consumer purchasing choice criteria can be categorised as: technical, social, economic and personal. The main influence on consumer buying behaviour are: the buying situation, personal and social influences. The main influence on organizational buying behaviour are: the buy class, the product type, and the importance of the purchase. There have been key innovations in purchasing practice.
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