UNIT FOUR

CONSUMER BUYING BEHAVIOR

 Consumer behavior is a branch of marketing studies about the buying/ shopping behavior
of consumers.
 This unit focused only on consumer market, not business market
Behavior: consistent patterns of action (how a person act and react with in the env’t,, how a person
respond)

OBJECTIVEs of the unit:

 As a marketing students, analyzing consumer behavior helps;

 To UNDERSTAND factors that influence CBB – how consumers behave in a market.

 To PREDICT & MOLD the behavior of consumers (like influencing children behavior)

 To develop marketing program (4Ps)

TOPIC COVERAGE:

4.1.Meanings of Consumer Buying Behavior

4.2.Model of Consumer Buying Behavior

4.3.Factors Affecting Consumer Behavior

 Cultural, Social, Psychological, Personal F actors

4.4.Consumer Buying Decision Process

4.4.1. Stages in consumer buying decision process

 Need recognition--Information search--Evaluating of alternatives--Purchase decision--Post
purchase behavior
4.4.2. Consumer Buying Roles in the Buying Process
 initiator, influencer, decider, buyer, user
4.4.3. The Buyer Decision Process for New Products

In the process of adopting a new product, consumers go through five stages:

 Awareness—Interest—Trial—Adoption--Evaluation

1
4.1. Meanings of Consumer Buying Behavior

 Buying behavior refers to the behavior of individuals and organizations in a market place
 Related to purchase, use and disposal of a product
 Market: can be consumer market and business market
 Business market: consists of organizations buying G/S for the purpose of other than
consumption
 Consumer market – consists of individuals and households who buy G/S for personal
consumption

Consumer-buying behavior:
 It to the buying behavior of final consumers.
 It refers to the buying behavior of individuals and households (Shopping behavior) related to:
 What consumers buy? (product choice, brand choice) (eg: a thirsty person may choose

water, beer, soda – which brand)

 Where do they buy products? (producer, wholesalers, retailers, online, door to door )

 How much they buy? (quantity- mass or retail, payment mode-credit or cash)

 How do they buy? (planned or unplanned, payment mode-advance, cash or credit)

 When do they buy products? (timing/seasonability, frequency)

 Why do they buy products? (basic reason to buy -to meet real needs, stated needs, secret

needs--- to get functional benefits or psychological benefits)

 It describes how individuals and group select, buy, use, and dispose of goods & services to satisfy
their needs.
 What factors influence product and brand choice
 When and where to buy
 How much to buy/use

The need for analyzing CBB:

 To understand, predict and mold consumers behavior

2
 o Through-Product, Price, Placement, Promotion
 To develop successful marketing programs (Marketing mix elements)
o Develop tailored marketing mix

Note that:

 Understanding consumer buying behavior and "Knowing customers" are never simple.

o Customers may state their needs and wants but act otherwise

o They may be influenced to change their mind at the last minute.

 The answers are often locked deep within the consumer’s head.

 Nevertheless, marketers must study their target customers’ wants, perception, preferences, and

shopping & buying behavior.

o Marketing research help the marketer to learn/understand the buying behavior of

consumers.

4.2. Model of Consumer Buying Behavior

 Consumer behavior models are theories that explain consumers' behavior patterns (what, when,
where why or how they make purchase decisions)
 The commonly used model to understand/study the buying behavior of consumers is the
Stimulus – response model.
o The starting point to understand consumer behavior
 Stimuli – are a lot of factors, which stimulate customers to
o Think of buying products and
o To make ultimate decision of buying.
o These all may strike a question in a consumer mind (black-box)
 Response – refers to the buyers response/reaction towards stimuli
o Product/brand choice, time and place of purchase, quantity purchase….
As the model clearly shows:

 Both marketing stimuli and other environmental stimuli may enter the buyer’s consciousness. (black box)
 Then, the combination of the buyer’s characteristics and buying decisions Process may
lead/influence to certain purchase decisions.
3
 Buyer’s responses/decision
Marketing stimuli Other stimuli Buyer’s black box

- Product - Political
- Price - Economic
- Place - Socio-cultural
- Promotion - Technology

Buyer’s characteristics Buyer’s decision process

- Cultural - Problem recognition
- Social - Information search
- Personal - Evaluation
- Psychological - Decision
- Post purchase behavior

FACTORS INFLUENCING CONSUMER BUYING BEHAVIOR

The following picture shows factors that affect or influence the buying behavior of consumers.

4
 Buyer

1. Cultural Factors
Cultural factors exert the broadest and deepest influence on consumer behavior. They include

culture, sub-culture & social class.

Culture
- It is most fundamental factor, which determines a person’s wants and behavior.

- It is a learned behavior

- It refers to a learned behavior including values, perceptions, preferences and /or wants

learned from the family and other important institutions.

A child growing up in the United States is exposed to the following values: achievement and

success, activity & involvement, efficiency and practicality, progress, material comfort,

individualism, freedom, humanitarianism, youthfulness, and fitness & health.

A child growing up in Ethiopian is exposed to the following values: spiritual devotion, social life,

modesty, patriotism, humanitarianism,

Values are the building blocks of culture. Even through it varies from country to country, ever y

group or society has a culture. For example, the culture of Ethiopians is not totally similar to the

culture of Indians or Americans. Therefore, marketers should understand cultural difference among

5
people. International marketers must understand the culture in each international market and adapt

their marketing strategies accordingly.

Generally, culture is defined as the set of the basic values, perceptions, wants, and behaviors learned

by a member of society from family and other important institutions.

Subculture
Each culture consists of smaller subcultures that provide more specific identification and

socialization for its members.

A subculture is a group of people with shared value systems based on common life experiences and

situations. Sub cultures include: Nationalities, Racial groups, religions and geographic regions.

Many subcultures make up important market segments, and marketers often design products and

marketing programs tailored to their needs.

Social Class
A social class is relatively permanent and hierarchal ordered divisions in a society whose members

share similar values, interests, and behaviors.

Social class is not determined by a single factor, such as income, but is a measured as a combination

of occupation, income, education, wealth, area of residence and other factors. Social classes differ

in their dress, speech, patterns, recreational preferences, and many other characteristics.

However, the lines between social classes are not fixed and rigid; people can move to a higher social

class or drop into a lower one. Marketers are interested in social class because people within a given

social class tend to exhibit similar buying behavior.

I. Cultural Factors
Cultural factors exert the broadest and deepest influence on consumer behavior.

They include culture, sub-culture & social class.

6
 1. Culture
- It is most fundamental factor, which determines a person’s wants and behavior.

- It is a learned behavior

- It refers to a learned behavior including values, perceptions, preferences and /or wants

learned from the family and other important institutions.

- The culture of Ethiopians is not totally similar to the culture of Indians or Americans.

Therefore, marketers should understand cultural difference among people.

EXAMPLE: A child growing up in the United States is exposed to the following values:

achievement and success, efficiency and practicality, progress, material comfort,

individualism, freedom, humanitarianism, and fitness & health.

A child growing up in Ethiopian is exposed to the following values: spiritual devotion, social life,

reserve/ shyness, patriotism, humanitarianism, --------

Eg: Abyssiniya bank use patriotism nature of customers and use national patriots to name its

branches,

Eg: Habesha beer use race to design its logo, package,

Eg: oromia bank, tsedey bank, amhara bank, debub global bank use sub-culture to target

customers.

2. Subculture
Each culture consists of smaller subcultures that provide more specific identification and

socialization for its members.

A subculture is a group of people with shared value systems based on common life

experiences and situations.

Sub cultures include:

- nationalities - racial groups and

7
 - religions - geographic regions

II. Social Factors

 including reference groups, family, and roles and status,

 affect the buying behavior of consumers.

A. Reference Groups
 Many groups influence a person’s behavior.

 A persons reference groups are groups that have a direct (face-to-face) or indirect

influence on the person’s:

 attitudes, behavior and lifestyle.

 product and brand choices.

 Generally Includes family, friends, neighbors, co-workers, religious, professional

Membership Groups:

 Groups having a direct influence on a person’s attitudes, behavior and lifestyle.

 Groups in which a person is a member

Membership Groups could take two basic forms:

i. Primary Groups
 Groups with whom the person interacts fairly/honestly, continuously/constantly &

informally/relaxed/no rule.

 Includes:

 Family – parents and relatives influence children preference

 Friends – peer influences choices of cloths, cosmetics, cell phone, recreation, school

 Neighbors – community influence the choice of house, house appliances, auto

 Co-workers –colleagues and work team influence choice of cloths/suits, auto, laptop

 We interacts fairly continuously & informally with these group.

 All affects consumer behavior (WHs)

8
ii. Secondary Groups

 Groups with whom the person interacts in a more formal and less continuous manner

 Include:

 Religious groups or Religion itself - influences choices of cloths, food staffs, , music,

recreation, financial services,

o Also affects when and where to buy?

 Professional groups – sport teams, bankers, doctors’ associations, media people

influence the choice of brand

 Trade union groups - chamber of commerce, consumer associations… they

influence buyers behavior by recommending/suggesting WHAT, WHEN, WHERE

and HOW MUCH to buy

Inspirational groups:
 Groups in which a person is not a member. But

 Groups to which a person would like to belong. (That you want to belong in the future)
 Influence buyers behavior, because people preferred to buy products and brands

parallel/similar to the group they are inspired to be

Eg:

 Globally some persons would like to join or being a member of illuminati (tattoo, clothing)

 Sport groups, medical doctor, bankers, religious associations, influence the choice of products

and brands

 Writers and drawers association influence individuals choice for hair style, clothing/scurf

 Rasta would affect persons’ hair style, clothing, music, books to read

Dissociative groups
 A group whose values or behavior an individual rejects.
9
  A group that a person dislikes, hate and not to be

 Influence buyers’ behavior, because people do not want to act/behave in the same ways

as dissociative groups

Eg:

 If you hate illuminati, you do not act like them- do not use same tattoo, closing, music, films,

 Same thing will happen to same sex marriage pro group -you do not use rainbow color cloths…

Opinion leaders
 For products and brands where group’s influence is strong

 Marketers should identify and influence the opinion leaders in reference groups.

 To shape/mold the buying behavior of customers (easily, effectively and efficiently)

Opinion leaders
 are people within a reference group who exert influence on others. (attitude/behavior/lifestyle)

 because of special skills(Messi/CR7/Balatoly), knowledge (politicians),

personality or other characteristics (religious person).

 is the person with product related information who offers advice or information about a
specific product or product category.

 Opinion leaders are found at all levels of society, and

 One person may be an opinion leader in certain product areas and an opinion follower in

others.

Eg:

 A father may be an opinion leader in some products like – auto, house, OX/sheep,

Recreation, school, and

 A mother may be an opinion leader in some products like – food staffs, kitchen appliances

10
  Successful business persons (Jeff Bezos, mark zukumberg ), celebrities (musicians, actors),

sport persons (haile G., beckham, Tison, Jordan ),

B. Family
 Family members are the most influential primary reference group.

 b/c a child is born and grow up with in a family

 Family members can strongly influence buyer behavior.

 Family consists of one’s parents & siblings.

 From parents a person acquires an orientation toward religion, politics, economics/work,

sense of personal ambition/motivation, self-worth/confidence/respect, & love.

 Family members influence a person’s buying behavior – what, when, where, how much,

how, why to buy

Eg: cloths, food staffs, school, hair style, recreation,

C. Roles and Status

 A person belongs to/participates in many groups like family, clubs, organizations etc.

 the person’s position in each group can be defined in terms of both role and status.

A role:

 consists of the activities that a person is expected to perform.

For example,

 in your own family you may play the role of daughter, son,

 in your parents you may play the role of wife/husband,

 in your company you may play the role of manager/accountant/ marketer-

 Each role carry/bring a status /rank/position

 Each status reflecting the general esteem/respect/prestige given to it by society.

 A person’s role and status may influence some of your buying behavior. (WHs)

 People often choose products that show their role and status in society.

11
 Example:

 A manager of a company preferred to buy suits and ties, executive auto,

apartment/villa, classed restaurants and recreations, business class flights,

newspaper/magazines, and also where, when, how, how much to buy

 Parents preferred to buy cloths, drinks, chairs, bed sets, sleeping room,

different from son/daughter

 An Athlete wear sport cloths, buy sporting cars, eat foods with high
calorie, carbohydrate…, entertain at ‘alcohol free’ centers,

 A banker wear suit and tie

 An executive secretary buy miniskirt and hill shoe, slim cellphone

III. Personal Factors

 A buyer’s decisions/behavior are also influenced by personal characteristics.

 Personal factors, which affect the buying behavior of a person, include age and life cycle
stage, occupation, economic situation, life-style, and personality & self-concept.

A. Age and Life Cycle Stage

 People buy different goods and services over their lifetime.
 They eat baby food in the early years, most foods in the growing and mature years, and
special diets in the later years.
 People’s taste/preference in food, clothes, furniture and recreation is also age related.
Family Life Cycle Stage
 Buying is also shaped by the stage of the family life cycle.

 Family life cycle is the stage through which families might pass as they mature overtime.

Family Life Cycle Stages

Young Middle aged Older

12
 Single Single Older married

Married without children Married without children Older unmarried

Married with children Married with children

Divorced with children Married without dependent children

Divorced without children

Divorced with children

Divorced without dependent children

Family Life Cycle Stages influence buyer’s decisions/behavior:

 WHAT to buy – food staffs/Milk, furniture, home appliance, House, recreation,

Automobile choice (Van),

 WHEN to buy – increase/decrease frequency in as per FLC stage

 HOW MUCH to buy - increase/decrease quantity in as per FLC stage

B. Economic Situation
 Product choice is greatly affected by ones economic circumstances.

 Economic situations consist of a person’s

 Spendable income (its level, stability, and time pattern/daily-weekly-monthly-)

 Savings and Asset (including the percentage that is liquid),

 Debts and Borrowing power, and

 Attitude toward Spending versus Saving.

 These would affects:

 Product and brand choice – Transport, luxury items, furniture, recreation,

education, medication,

 How much and How to pay – Purchasing power , Mode of payments

 When to buy – based on timing of pay Eg: 4th week at convenient goods, recreation…

13
  How Much to buy

 Where to buy – dealers with incentives, discount, credit

C. Occupation
 A person’s occupation also influences his or her consumption pattern.

 A blue-collar worker will buy work clothes, work shoes, lunch boxes, defending cars,

and large quantity foods,

 White-collar workers buy more suits and ties

Eg: A company president will buy expensive suits, air travel, country club membership, and a

large sailboat.

D. Lifestyle
 People coming from the same subculture, social class, and occupation may have quite

different lifestyles.
 Lifestyle is a person’s pattern of living (mode of living) as expressed in his/her AIO

dimensions - activities, interests and opinions.

Activities – work, hobbies/interest, shopping, sports, social events

Interests – food, fashion, family, recreation

Opinions – about themselves, social issues, politics, technology, business, products

 Life style portrays/represent the “Whole person” interacting with his or her environment.

 A lifestyle profiles/outlines a person’s whole pattern of acting & interacting in

the world.

14
 E.g.

 A person can choose to live a “belonging’ lifestyle (sociable and humanitarian)

technological products by wearing conservative clothes, spending a lot of time

with a family and helping a church. Or

 He/she can choose an “achiever” life style (successful/hard worker) by working

long hours or major projects and playing had at travel and sports.

 Time sensitive person buys time saving products (fast foods/electronic

appliances), technological products, willing to pay extra for quick/speed..

E. Personality and Self-Concept

- Everyone 7Bl are unique, no one is like, even identical twins

- Personality is a person’s unique psychological characteristics that

 That distinguish from others

 That influence one’s behavior (response/reaction to environment)

- Personality is usually described in terms of traits such as self-confidence, dominance,

sociability, autonomy, defensiveness, adaptability, and aggressiveness.

- Personality affects consumer behavior for certain product or brand choice.

For example,

 Coffee makers have discovered that heavy coffee drinkers tend to be high on sociability.

 Dominance persons buy products/brand makes them superior- 1st class travel, 1st class
room, residence site,

 Aggressive people prefer to buy big shoe, big cellphone, big car…..

Self-Concept
- It is a concept related to personality and is also known as self-image.

 ‘We Are What We Think/Perceived Ourselves’

- It reflect a person’s identity’ in terms of possession.

 that is, “we are what we have”

15
Eg If Laptop computer is promoted and priced for those who want the best, then its brand image

will match his/her self-image.

 Marketers try to develop brand images that match the target market self-image.

Eg: promotional appeals such as—“le anbesoch…. Le lebamochu (ayat) … letatariochu (nib

bank), …

a. Psychological Factors
A person’s buying behavior (choices) are further influenced by four major psychological factors:

such as: Motivation, Perception, Learning, and Beliefs and attitudes.

Motivation

A person has many needs at any given time. Some needs are biogenic. They arise from

physiological states of tension such as hunger, thirst, and discomfort.

Other needs are psychogenic; they arise from psychological states of tension such as the need of

recognition, esteem, or belonging. A need becomes a motive when it is aroused to a sufficient level

of intensity. A motive is a need that is sufficiently pressing to drive a person to act. Satisfying the

need reduces the felt tension.

Psychologists have developed theories of human motivation of the many psychologists; I will

present you Abraham Maslow’s Hierarchy of needs as follows.

5. Self-actualization
Needs
(Self-development and realization)

4. Esteem needs
(Self-esteem, recognition, status)

3. Social needs

16
 (Sense of belonging, love)

2. Safety needs (Security, protection)

1. Physiological needs (hunger, thirst)

Maslow’s theory helps marketers understand how various products fit in to the plans, goals , and

lives of potential consumers.

Perception

A motivated person is ready to act. How the person acts is influenced by his/her perception of the

situation. Two people with the same motivation and in the same situation may act quite differently

because they perceive the situation differently.

Perception is the process by which people select, organize, and interpret information to form a

meaningful picture of the world.

People can form different perceptions of the same stimulus because of three perceptual processes:

selective attention, selective distortion and selective retention.

Selective Attention: the tendency for people to screen out most of the information to which they
are exposed. People are exposed to a great amount of stimuli every day. For example, the average

person may be exposed to a lot of ads a day. And it is impossible for a person to pay attention to all

these stimuli. Thus, marketers have to work especially hard to attract the consumer's attention. Their

message will be lost on most people who are not in the market for the product. Moreover, even

people who are in the market may not notice the message unless it stands out from the surrounding

sea of other ads.

Selective Distortion: it describes the tendency of people to adapt information to personal meanings.

In other words, noted stimuli do not always come across in the intended way. Each person fits

incoming information into un-existing mind-set. People tend to interpret information in a way that

17
will support what they already believe. Thus, marketers must try to understand the mindsets of

consumers and how these will affect interpretations of advertising and sales information.

Selective Retention: people also will forget much that they learn. They tend to retain information

that supports their attitudes and beliefs. Because of selective retention, a person is likely to

remember good points made about a particular product, which he/she is familiar, and forget good

points made about competing products.

Because of selective exposure, distortion and retention marketers have to work hard to get their

messages through. This fact explains why marketers use so much drama and repetition in sending

messages to their market.

[

Marketers must therefore be careful to take these perceptual processes into account in designing

their marketing campaigns.

Learning

Learning involves changes in an individual's behavior arising from experience. When people act,

they learn. Learning theorist believe that learning is produced through the interplay of drives,

stimuli, responses, and reinforcement.

Beliefs and Attitudes

Through doing and learning, People acquire beliefs and attitudes. These in turn influence their

buying behavior.

A Belief is a descriptive through that a person holds about something.

Manufactures are very interested in the beliefs that people carry in their heads about their products

and services. These beliefs make up product and brand images, and people act on their image.

18
An Attitude is a person’s enduring favorable or unfavorable evaluation, emotional, feelings, and

action tendencies toward some object or idea.

People have attitudes toward almost everything Religion politics clothes, music, food and so on.

Attitude put then into frame of mind of liking or disliking an object, moving toward or away from

it.

Consumer Buying Roles in the Buying Process

 To be successful, marketers have to go beyond the various influences on buyers and

 Marketers must:

 identify who makes the buying decisions,

 identify the types of buying decisions and

 Understand steps in the buying process.

People may play any of several roles in a buying decisions process:

 Initiator: A person who first suggests the idea of buying the product or service

o Who identify his or others needs/problems

 Influencer: A person whose view or advice influences the decision

19
 Decider: A person who decides on any component of buying decision

 whether to buy,

 what to buy,

 how to buy, or

 where to buy.

 Buyer: The person who makes the actual purchase (Ato gizaw)

 User: A person who consume or uses the product or services.

E.g. suppose Abebe wants to learn basic computer skill.

 Abebe’s interest might have been initially stimulated by his/ her friend (initiator).

 In finding for a computer training center, Abebe might have consulted someone he knows,

who made some suggestions about where to learn (Influencers)?

 Abebe made the final decision (decider).

 Abebe’s parents enroll him at the computer training center (buyer).

 Abebe starts learning the computer (user).

Types of Buying Decision Behavior

 Consumer decision-making varies with the type of product to buy

 The decision to buy tooth paste, sugar, purified water, a personal computer,

refrigerator and a new car are all very different.

o Some purchases are Complex and others are not

o Some purchases are expensive and others are not

Which kind of purchases requires more buyer’s involvement in buying decision?

 Complex and Expensive purchases are requires more buyer consideration and more

participants.

 The types of consumer buying behavior differ based on:

i. The degree of buyer involvement

o to what extent the buyer devote time and efforts in searching for different brands
20
 ii. The degree of differences among brands

o to what extent variety of brands are available with differences in quality, feature,

design, style, benefits, price, services

Four Types of Buying Behavior

High Involvement Low Involvement

1. Significant differences Complex buying behavior Varity seeking buying

between brands (TV, behavior
refrigerator, auto, house,
insurance, college)
2. Few difference between Dissonance reducing buying Habitual buying behavior
brands (sugar, salt, water, behavior
fuel, cement, bread)

1. Complex Buying Behavior

 Occurs when Consumers are:

 highly involved in a purchase (devote much time and effort in search for d/f brands)

 aware of significant differences among brands. (differences in quality, features,

benefits, price, services)

 Complex buying behavior involves a three step-process: (a consumer passes through)

 First, the buyer develops beliefs about the product. (descriptive thought)

 Second, the buyer develops attitudes about the product. (evaluation)

 Third, the buyer makes a thoughtful choice, (purchase decision)

 This buying behavior is usually occurred in the case:

 when the product is expensive, bought infrequently, risky (imitation), and

highly self-expressive (that promote one’s wealth, educ, status, power, class).

 when the consumer does not know much about the product category.

o There is significant differences among different brands

Eg: TV, refrigerator, auto, house, insurance, college

21
For example, a person buying a personal computer may not know what attributes to look for.

 the buyer has done some research.

 To know much about the different brands available and their differences

The marketer task: (to influence buying behavior)

 differentiate the brand's features, (from other competing brands)

 use print media to describe the brands benefits, and

 motivate store sales personnel and the buyer's acquaintances

(referrals/influencers) to influence the final brand choice.

2. Dissonance – Reducing Buying Behavior

 Occurs when consumer is highly involved in a purchase but sees little difference in brands.

 The high involvement is based on the fact that the purchase is expensive infrequent

and risky.

 Since there is little difference in brands, the buyer will shop around to learn what

is available

o but will buy quickly, perhaps responding primarily to a good price or to

purchase convenience.

For example, carpet/mat buying is a high involvement decision because carpeting is expensive

and self-expressive, yet the buyer may consider most carpet brands in a given price range to be

the same.

 After the purchase, the consumer might experience dissonance (discomfort) when:

 Noticing certain disturbing features or

 Hearing favorable things about other brands.

 In this case, the consumer will be alert to information that supports his or her decision.
 In Dissonance – Reducing Buying Behavior, the consumer first acted, then acquired new

beliefs, then ended up with a set of attitudes.

 Develop belief and attitude towards a product after purchase(behavior)

Eg: you may buy a cloth then based on information received, you may like or dislike it.

22
The Marketer task: (to reduce post purchase dissonance/discomfort) and (to influence buying

behavior)

 Develop promotions to build beliefs and attitude that help the consumer feel good

about his or her brand choice.

3. Habitual Buying Behavior (routine/usual/expected)

 Occurs when consumers bought products under conditions of low involvement and the

absence of significant brand differences.

 consumers have low involvement because products are low-cost and frequently

purchased.

Eg: sugar, salt, water, fuel, cement, bread

For example: Consider purified Water/salt, consumers have little involvement.

They go to the store and ask for the brand. If they keep asking for the same brand, it is at

of habit, not strong brand loyalty.

 No significant brand differences

o Consumers do not search extensively for information, evaluate

characteristics and make a decision on which brand to buy.

 With these products, consumer behavior does not pass through the normal sequence of

beliefs, attitudes and behavior.

The Marketers task: (to influence buying behavior)

 It is effective to use price and sales promotions to stimulate product trial.

 Television advertising is more effective than print

o because TV is a low-involvement medium that is suitable for passive learning.

23
4. Variety Seeking Buying Behavior

 Occurs when consumer buy products with low involvement but significant brand
differences.

 Here consumers often do a lot of brand switching.

 Try different brands for the sake of variety rather than dissatisfaction

For example: Think about cookies/soda/ice cream/juice.

 The consumer has some beliefs about cookies, chooses a brand of cookies without much

evaluation, and evaluates the product during consumption.

 Next time, the consumer may buy another brand out of a wish for a different taste.

 Brand switching occurs for the sake of variety rather than dissatisfaction.

o The so called - Variety Seeking Buying Behavior

Eg: we seek variety for those products like-cookies/soda/ice cream/juice.

The Marketer Task: to influence buying behavior (to retain or encourage to taste other brand)

 The market leader and the minor brands in thus product category have different

marketing strategies.

 The market leader will try to

o encourage habitual buying behavior

o by dominating the shelf space, avoiding out-of-stock conditions, and

making frequent reminder advertising.

 Competitor firms (minor brands) will try to

o encourage variety seeking buying behavior

24
 o by offering lower prices, deals/credit sales, coupon, free samples, and

advertising that presents/emphasis reasons for trying something new.

THE BUYER DECISION PROCESS

 To reach a buying decision, buyers pass through certain stages;

 it is called the buyer decision process

In the buyer decision process there are five basic stages:

1. Need recognition

2. Information search

3. Evaluating of alternatives
4. Purchase decision, and

5. Post purchase behavior

1. Need recognition

- The buying process starts with need recognition

- It requires the buyer to recognize a problem or need (bio or psycho state of tension)

- Buyer senses a difference between his actual state and some desired state

 Hunger need to be full, thirst need to be satisfied, feeling cold need to be hot…….

- The need can be triggered (caused) by:

 internal stimuli - the person’s biological or psychological state of tension- normal

needs- hunger, thirst,

 external stimuli - for example when you see freshly baked bread it may stimulate your hunger,

2. Information search

25
 - In this state the consumer is motivated to search for more information

- The consumer may get information from sources like

 Personal sources – family, friends, neighbors, acquaintances/colleague/reference

 Commercial sources – advertising, sales people, deals/agreement, packaging, displays

 Public sources – mass media, consumer-rating organization

 Experiential sources – handling/holding/transport, examining/investigation, using the product

 Consumers receive the most information about products from commercial source,
 which are controlled by the marketer.
 The most effective sources – personal sources

 Credible, acceptable, impactful

NOTE THAT:

 Commercial sources normally inform the buyer, but personal sources legitimate/valid or

evaluate products for the buyer.

 When more information is obtained, the consumer’s awareness and knowledge of the

available products increase.

3. Evaluation of Alternatives
- It means choosing among the alternative brands (products)

- It is processing information to arrive at brand /product choices

- While evaluating a brand (a product) the consumer sees different attributes of a product like:

 the quality of the product,

 its price,

 ease of use, and

 other attributes. Like brand image – the set of beliefs consumers hold about a
particular product /brand

- It is measuring the benefits and costs of each brand

- It involves evaluating products, ranking products and forming purchase intentions

4. Purchase Decision

26
 - In this stage the consumers actually buys the product

- The consumer will buy the most preferred brand (better quality, price,…)

- But two factors can come between the purchase intention(plan/aim) and the purchase decision.

a. The first factor is the attitudes of others –

for example if your friend / husband/mother/child feels strongly that you should buy the lowest –

priced product, then the chances of you to buy a more expensive product will be reduced.

b. The second factor is unexpected situational factors.

 Most often purchase intentions are made based on factors like expected income, expected

price and expected product benefit.

 However, unexpected factors too may affect your purchase intention (plan/aim) like

losing your job, a close competitor may drop its price etc.

5. Post purchase Behavior

 The marketer’s job does not end when the product is purchased.

 Involves consumer’s further action after purchase based on their satisfaction or dissatisfaction.

 To determine whether customers are satisfied or dissatisfied we have to compare

o Consumers base their expectations on information they receive from sellers, friends,

and other sources

 consumer’s expectation and the products’ perceived performance.

 If the product falls short of expectation, the consumer is disappointed,

 if is meets expectations, the consumer is satisfied,

 if it exceeds expectation, the consumer is delighted.

 Most of the time after major purchases there will be a cognitive dissonance, or discomfort

caused by post purchase conflict.

 The cause of such a discomfort could be:

o losing the benefits of the products not purchased (loss of opportunity) and

o acquiring the drawbacks of the chosen (purchased) product.

27
Why is it Important to Satisfy Customers?

 It is important to satisfy customers because

 the company’s sales come from these customers (new customers and retained customers).

 It usually costs more to attract new customers than to retain current ones, and

 the best way to retain current customers is to keep them satisfied.

Satisfied customers:

- Buy a product again

- Talk favorably to others about the product

- Pay less attention to competing brands & advertising, and

- Buy other products from the same company

The Buyer Decision Process for New Products

Before discussing the stages of new products purchase, we have to define what a new product is.

A new product is a good, service, or idea that is perceived by some potential customers as new.

 That customers never been sought before. (heard/seen/wanted)

 New for the customer, not for the company/producer (Mac Donald, Safaricom telecom
services, lab grown meat, a newly opened cafeteria ….)

 After hearing (learning) about an innovation (a new product), customers may likely go

through the adoption process.

 The adoption process extends from hearing about a new product, to a final

adoption/acceptance.

 Adoption means a final decision by an individual to become a regular user of the product.

Stages in the Adoption Process

In the process of adopting a new product, consumers go through five stages:

1 – Awareness 4 - Trial

28
 2 – Interest 5 - Adoption

3 – Evaluation

1. Awareness: the consumer becomes aware to the product but lacks information about it.

2. Interest: the consumer seeks information about the new product.

3. Evaluation: the consumer consider whether trying the new product makes sense (benefits/value)

4. Trial: the consumer tries the new product on a small scale to improve his/her estimate of its value

5. Adoption: the consumer decides to make full & regular use of the new product.

Individual Differences in Innovativeness

 People differ greatly in their readiness to try new products.

 In each product area, there are “consumption pioneers” and early adopters. Other

individuals adopt new products much later.

There are five adopter groups having different values.

Innovat

adopters

majority

majority
ors

Early

Early

Late

laggards

1) Innovators: are venturesome (adventurers/brave/pioneers)

 Also called- “consumption pioneers”

 They try new ideas at some risk.

 Risk takers (if products are harmful for health, poor quality, technical problem)

 Get first mover advantages – receive the benefits of trying new product eg: low

price (penetration pricing), promotional quality, fashion, status/respect,

29
  Are few in numbers (compared to the next three groups)

2) Early adopters: are guided by respect (intelligent, make intellectual/informed decisions)

 They are opinion leaders in their communities (influence others decision)

 adopt new ideas early but carefully. (based on tangible evidence and earliest than majority)

3) Early majority: are deliberate (careful, cautious, calculated)

 they rarely are leaders, (seldom influence others)

 they adopt new ideas before the average person.

4) Late majority: are skeptical – (doubtful, uncertain)

 they adopt an innovation only after a majority of people have tried it.

5) Laggards: are traditions bound – (custom/tradition oriented, conservatives)

 they are suspicious of changes

 adopt the innovation only when it has become something of a tradition itself.

In general, innovators tend to be:

 relatively younger, better educated, and higher in income than later adopters and non-

adopters.

 Moreover, they are receptive to unfamiliar things,

 rely more on their own values and judgment, and are more willing to take risks.

 They are less brand loyal and more likely to take advantage of special promotions such

as discounts, coupons, and samples.

Influence of Product Characteristics on Rate of Adoption

 The characteristics of the new product affect its rate of adoption. (increases/decreases)

 Some products gain acceptance within short time, whereas others take a long time to gain

acceptance.

30
The following five characteristics of a new product influence the rate of adoption:

(increases/decreases)
1. Relative advantage 4. Divisibility

2. Compatibility 5. Communicability

3. Complexity

1. Relative advantage:
 the degree to which the innovation appears superior to existing products,

 the strength of the new product over existing products.

 Rate of adoption increases/decreases when?

2. Compatibility:

 the degree to which the innovation fits the values and experiences of potential

consumers.

 Rate of adoption increases/decreases when?

3. Complexity:
 the degree to which the innovation is difficult to understand or use.

 Rate of adoption increases/decreases when?

4. Divisibility:
 the degree to which the innovation may be tried on a limited bases.

 Possibility of testing the product before actual purchase; sample

 Rate of adoption increases/decreases when?

5. Communicability:

 the degree to which the results of using the innovation can be observed or

described to others; (demonstration and description).

 Rate of adoption increases/decreases when?

31
 6. Other characteristics like initial and on giving/operating costs, risk and uncertainty,

and social approval may also affect the rate of adoption.

 Rate of adoption increases/decreases when?

BUSINESS BUYING BEHAVIOR

 Based on the purpose of buying products, broadly. Markets can be classified as business

markets and consumer markets

 The buying behavior of business markets is different from that of consumer markets

The business market

 Consists of all business users, organization that buy goods and services for one of the

following purposes.

1. To make other goods and services

 Buying goods/services to use as an inputs for production or further processing

 To add value on the products

 They buy raw materials, parts, components

 Eg: furniture makers, bakery, garments

2. To resell to other business users or to consumers

 Buying finished goods for reselling at a profit

 Without adding value (quality and form)

 But, create time (24/7), place (convenience) and quantity (retail quantity) utilities

 Eg: wholesalers, retailers

3. To conduct the organizations operations

 To consume with in the business to running daily business operations

32
  Eg: hospitals, schools, NGOs, government organizations,

 Buy fuels, stationaries, utility services, furniture, machinery, maintenance

equipment and supplies required to run them

Components of the Business Market

 Traditionally, business markets were referred to as industrial markets. This

caused many people to think the term referred only to manufacturing firms.

 But there are also six other components – agriculture, resellers, government
agencies, service companies, non-profit organizations, and international.

1. The industrial markets:

 Consists of manufacturing firms

 They buy goods/services for production of goods.(Inputs - Outputs)

 Manufactures constitute a major portion of the business market

 Includes: all manufacturers, mining companies, construction firms

2. The Agriculture Market

 Consists of all Agribusinesses – farming, livestock, food processing, forestry, fishing and

other large scale farming related businesses

 They buy machineries, seeds, fertilizers, pesticides, chemicals, agricultural products

3. The Reseller Market

 Intermediaries like wholesalers and retailer constitute the reseller market.

 The basic activity of resellers –is buying products from suppliers organizations and
reselling these items in the same form to the resellers’ customers.

 In economic terms, resellers’ create time, place, and possession utilities, rather than form

utility.

 Resellers also buy many goods and services for use in operating their businesses

33
  items such as office supplies and equipment, warehouses, material handling
equipment, legal services, utility services, and material supplies.

4. The Government Market

 The government market includes the federal, state, and local units

 They spend a huge amount for buying for government institutions, such as schools, offices,

hospitals, and military bases.

 Government procurement processes are different from those in the private sector

 A unique feature of government buying is the competitive bidding system.

5. The Service Market

 Currently, service firms greatly outnumbered firms that produces goods.

 That is, there are more service firms than the total of all manufacturers, mining
companies, construction firms and enterprise engaged in farming, forestry and

fishing.
 The service market includes are transportation carriers and public utilities, and the

many financial, insurance, legal and real estate firms, rental housing, recreation and

entertainment, repairs, health care, personal care and business/marketing services.

6. The “non-business” business market

 so-called non-business or non-profit organizations.

 The non-business market includes such diverse institutions as churches, colleges and

universities, museums, hospital, and other health institutions, political parties, labor

unions, and charitable organizations.

 These organizations do almost all the things that businesses do –

 offer a product, collect money, make investment, hire employees

 they also conduct marketing campaigns.
 they spend billions of dollars buying goods and services to run their operations.
7. The international Markets:

34
  Consists of all businesses operate internationally
 Hiring, purchasing, producing, selling and financing operations are stretched more than
one nation/country
 They are different in location, culture, political and legal variables, economic conditions,

Characteristics of Business Market Demand

 Four demand characteristics differentiate the business market from the consumer market:

1. Demand is derived
 The demand for a business product is derived from the demand for the consumer products.

 An increase in demand for consumer products leads to an increase in demand for business product

Eg:

 The demand for steel depends on consumers demand for automobiles and refrigerators.

 The DD for cotton and textile depends on consumers DD for cloths

 The DD for construction equipment and materials depends on the DD for residential houses

2. Demand is inelastic
 Elasticity of demand refers to how responsive demand is to a change in the price of a

product.

 DD is elastic, when the DD for a product is highly responsive for a change in price

of that product. (an increase/decrease in price leads to buy/not to buy the product)

 DD is inelastic, when the DD for a product has no/little responsive for a change in

price of that product. (an increase/decrease in price does not affects their purchase)

 The demand for may business products is relatively inelastic

 which means that the demand for a product responds very little to changes in its price.

 there is no change in the demand for the business product.

3. Demand is widely fluctuating

 the demand for business goods fluctuates considerably more than the demand for

consumer products.

 Based on the changes in DD for consumer goods.

35
  BB/c Business market DD id derived from Consumer market DD.

4. Buyers are well informed

 business buyers are better informed about what they are buying than are ultimate

consumers.

 They know more about the relative merits of alternatives sources of supply and

competitive products

Model of business buying behavior

The environment The buying organization Buyer response

Marketing stimuli Other stimuli The buying center Product choice

Product Economic forces Supplier choice

Price Political forces Order quantities

Place Technological forces Buying decision process Delivery terms and times

promotion Competitive force Service terms

Organizational influences Payments

Types of business buying situations

1. New-task buying

 A business buying situation in which the buyer purchases a product for the first time
 This is the most difficult and complex buying situation

 because it is a first-time purchase of a major product.

 Typically it is characterized by:

 More people are involved in new task buying than in the other two situations

because the risk is great.

 Information needs are high and the evaluation of alternative is difficult because

the decision makers have little experience with the product.

36
2. Straight re-buy

 A business buying situation in which the buyer routinely reorders products without any
modifications.

 Typically it is characterized by:

 This is a routine, low involvement purchase with no great considerations of

alternatives.

 These buying decision are made in the purchasing department, usually from a

predetermined list of acceptable suppliers.

3. Modified re-buy

 The business buying situation in which the buyer wants to modify product specifications,

prices, terms, or suppliers.

 Typically it is characterized by:

 Involve more decision participants than straight rebuy

 Others (out) suppliers see this situation as an opportunity to make a better offer and
gain new business.
 Current (In) suppliers may become nervous and feel pressured

Multiple Buying influences – The Buying center

Thus a buying center includes the people who play any of the following roles.

1. Users: -

 The people who actually use the business product

 Perhaps a secretary, and executive, a production live worker, or a truck driver.

2. Influences: -

 The people who set the specifications and aspects of buying decisions

 because of their technical expertise, their organizational position, or even their

political power in the firm

37
3. Deciders: -

 The people who made the actual buying decision regarding the product and the supplier.

 Top management or purchasing agent may be the decider

4. Gate keepers: -
 The people who control the flow of purchasing information within the organization as

well as between the firm and potential vendors.

 These people may be purchasing agents, secretaries, receptionist or technical personnel

5. Buyers: -
 The people who interact with the suppliers, arrange the terms of sale, and process the

actual purchase orders.

 Typically this is the purchasing department’s role.

 But as gain, if the purchase is an expensive, complex new buy, the buyer’s role may be

filled by someone in top management.

38