Buyer Behaviour

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Buyer Behaviour

  1. 1. Buyer Behaviour The Individual, Risk and Involvement
  2. 2. Objectives of this session: <ul><li>Some factors affecting buying behaviour </li></ul><ul><li>B2B buying behaviour </li></ul><ul><li>‘ Risk’ and Buying Behaviour </li></ul><ul><li>‘ Involvement’ and Buying Behaviour </li></ul><ul><li>Buyer behaviour and the DMU </li></ul><ul><li>Buyer behaviour and communication tasks </li></ul>
  3. 3. Factors affecting all buying behaviour <ul><li>Personal Factors </li></ul><ul><ul><li>Demographics: Age, Gender, Income, Education </li></ul></ul><ul><ul><li>Situational: Lifestyle choices </li></ul></ul><ul><ul><li>Experience: previous buying experience </li></ul></ul><ul><li>Social Factors </li></ul><ul><ul><li>Culture, Sub-Culture, Reference Groups </li></ul></ul><ul><li>Psychological Factors </li></ul><ul><ul><li>Personality Type </li></ul></ul><ul><ul><li>Attitudes & Beliefs </li></ul></ul>
  4. 4. Opinions, Attitudes and Beliefs BELIEFS & VALUES ATTITUDES OPINIONS Long term and deeply held – almost impossible to change Sets of Attitudes derived from Beliefs – May only be changed over the medium to long term Derived & Received Opinions – may be changed by Experience, Learning and Persuasion
  5. 5. Three B2B factors affecting the purchaser: <ul><li>As an Individual </li></ul><ul><ul><li>Psycho-Social factors </li></ul></ul><ul><li>As a ‘Role’ </li></ul><ul><ul><li>Expectations and responsibilities of role in DMU </li></ul></ul><ul><li>As a Relationship, between: </li></ul><ul><ul><li>Buyer & Seller Organisations </li></ul></ul><ul><ul><li>Individual and Corporate Image </li></ul></ul><ul><ul><li>Individuals involved in DMP </li></ul></ul>
  6. 6. B2B: DMP and Degree of Complexity <ul><li>Routine: Straight Re-Buy (Low cost, frequently purchased items) </li></ul><ul><ul><li>Strategy: </li></ul></ul><ul><ul><ul><li>Maintain quality / value to retain existing customers </li></ul></ul></ul><ul><ul><ul><li>Introduce promotions to attract new buyers </li></ul></ul></ul><ul><li>Limited Problem Solving: Modified Re-Buy (Less frequent purchase. Higher search for information) </li></ul><ul><ul><li>Strategy: </li></ul></ul><ul><ul><ul><li>Aid customer search for information </li></ul></ul></ul><ul><ul><ul><li>Build confidence in brand </li></ul></ul></ul><ul><li>Extensive Problem Solving: Major or New Buy (Expensive or new product area. Extended search for information) </li></ul><ul><ul><li>Strategy: </li></ul></ul><ul><ul><ul><li>Understand evaluation process of DMP </li></ul></ul></ul><ul><ul><ul><li>Inform customers of key purchasing criteria </li></ul></ul></ul><ul><ul><ul><li>Competitor comparisons </li></ul></ul></ul>
  7. 7. Other influences on B2B purchases <ul><li>Stakeholder Factors </li></ul><ul><ul><li>Stakeholder networks </li></ul></ul><ul><ul><li>Long / short term relationship </li></ul></ul><ul><ul><li>Unsupported or co-operative relationship </li></ul></ul><ul><ul><li>Formalised or casual purchasing process </li></ul></ul><ul><ul><li>Legal, Codes of Practice and other agreements </li></ul></ul><ul><ul><li>Social and cultural values </li></ul></ul><ul><li>Organisational Factors </li></ul><ul><ul><li>Corporate values and objectives </li></ul></ul><ul><ul><li>Resources and costs </li></ul></ul><ul><ul><li>Established procedures </li></ul></ul><ul><li>Individual Factors </li></ul><ul><ul><li>Interpersonal effects </li></ul></ul><ul><ul><li>Relative status of individuals </li></ul></ul><ul><ul><li>Personal rewards and incentives </li></ul></ul>
  8. 8. Individual Factors: Perceived Risk <ul><li>Performance Risk </li></ul><ul><ul><li>Will product deliver promised benefit? </li></ul></ul><ul><li>Financial Risk </li></ul><ul><ul><li>Affordability and costs of incorrect decision </li></ul></ul><ul><li>Physical Risk </li></ul><ul><ul><li>Potential harm to people and equipment </li></ul></ul><ul><li>Social Risk </li></ul><ul><ul><li>Peer group attitudes. </li></ul></ul><ul><ul><li>Consequences of incorrect decision </li></ul></ul><ul><li>Ego Risk </li></ul><ul><ul><li>‘ Feel good factor’ </li></ul></ul><ul><ul><li>Fit with corporate / self-image </li></ul></ul><ul><li>Time Risk </li></ul><ul><ul><li>Time taken on decision Vs other risks </li></ul></ul>
  9. 9. Risk Contexts <ul><li>Situation of the Purchase </li></ul><ul><ul><li>Relative importance of purchase </li></ul></ul><ul><ul><li>Relation to other activities </li></ul></ul><ul><ul><li>Brand and other factors </li></ul></ul><ul><li>Individual Context </li></ul><ul><ul><li>Attitude towards risk taking / risk aversion </li></ul></ul><ul><ul><li>Other personality factors </li></ul></ul><ul><li>Product Context </li></ul><ul><ul><li>Prestige / Cost / Social role of product </li></ul></ul>
  10. 10. Individual Factors: Involvement Theory <ul><li>Interest </li></ul><ul><ul><li>How interested is the individual in the purchase? </li></ul></ul><ul><li>Risk Importance </li></ul><ul><ul><li>How does individual respond to risk? </li></ul></ul><ul><li>Risk Probability </li></ul><ul><ul><li>How likely is an incorrect decision? </li></ul></ul><ul><li>‘ Sign’ Value </li></ul><ul><ul><li>Significance of prestige and other factors </li></ul></ul><ul><li>‘ Hedonic’ Value </li></ul><ul><ul><li>Pleasure / fun associated with purchase </li></ul></ul>
  11. 11. Involvement Theory: Three Perspectives <ul><li>Cognitive </li></ul><ul><ul><li>Perceived relevance to the individual </li></ul></ul><ul><li>Predisposition to act </li></ul><ul><ul><li>Individual able and resourced to act </li></ul></ul><ul><li>Response-based: Purchase as response to stimulus: </li></ul><ul><ul><li>Occurrence of perceived problem </li></ul></ul><ul><ul><li>Occurrence of marketing message </li></ul></ul><ul><ul><li>Other prompt </li></ul></ul>
  12. 12. Involvement Theory: Degree of Involvement <ul><li>High Level Involvement </li></ul><ul><ul><li>High perceived relevance or risk </li></ul></ul><ul><ul><li>Involved search for information </li></ul></ul><ul><ul><li>Trial of alternatives only after attitudes and intentions already set </li></ul></ul><ul><li>Low Level Involvement </li></ul><ul><ul><li>Low cost / risk purchases </li></ul></ul><ul><ul><li>Less involved information search </li></ul></ul><ul><ul><li>Trial of alternatives before attitudes and intentions established </li></ul></ul><ul><li>Zero Level Involvement </li></ul>
  13. 13. Reprise: Individuals’ concerns within the DMU <ul><li>The Gatekeeper </li></ul><ul><li>The Initiator </li></ul><ul><li>The Decider </li></ul><ul><li>The Buyer </li></ul><ul><li>The User </li></ul><ul><li>The Financier </li></ul><ul><li>Other Influencers </li></ul>
  14. 14. The Gatekeeper <ul><li>Concerns: </li></ul><ul><li>“ You better have a good reason for disturbing my boss.” </li></ul><ul><li>“ Let me prove what a good member of the team I am.” </li></ul>
  15. 15. The Initiator <ul><li>Concerns: </li></ul><ul><li>“ I’ve got a problem – Help me!” </li></ul><ul><li>“ Make my job easier!” </li></ul>
  16. 16. The Decider <ul><li>Concerns: </li></ul><ul><li>“ Why should I risk my job or reputation on you?” </li></ul><ul><li>“ If this thing works, how will I get the credit?” </li></ul>
  17. 17. The Buyer <ul><li>Concerns: </li></ul><ul><li>“ Don’t give me more problems – or any more work – than I have already.” </li></ul>
  18. 18. The User <ul><li>Concerns: </li></ul><ul><li>“ I just want this to work – first time, every time.” </li></ul><ul><li>“ I’d like to feel good about using this.” </li></ul>
  19. 19. The Financier <ul><li>Concerns: </li></ul><ul><li>“ How much?” </li></ul><ul><li>“ What R.O.I can I expect?” </li></ul>
  20. 20. Influencers <ul><li>Concerns: </li></ul><ul><li>“ If I’m going to be your advocate, don’t make a liar out of me.” </li></ul>
  21. 21. What effects would you like your communications to have? <ul><li>Find out more </li></ul><ul><li>Visit website / stand / store </li></ul><ul><li>See sales representative </li></ul><ul><li>Purchase </li></ul><ul><li>Provide feedback </li></ul><ul><li>Brand values / image </li></ul><ul><li>What you ‘stand for’ </li></ul><ul><li>Brand – Customer relationship </li></ul><ul><li>‘ Like’ / ‘Prefer’ (DAGMAR) </li></ul><ul><li>Who you are </li></ul><ul><li>What you do </li></ul><ul><li>Why you are better </li></ul><ul><li>How you solve problems </li></ul><ul><li>Where to buy (Place) </li></ul><ul><li>Benefits / Features </li></ul><ul><li>New products / services / offers </li></ul><ul><li>New / improved specification </li></ul>Behaviour (Do) Attitudes (Feel) Knowledge (Think)
  22. 22. Summary <ul><li>There are many individual factors which affect B2B as well as B2C buying behaviour </li></ul><ul><li>Marketers should accept that their communications can have only limited effect </li></ul><ul><li>Understanding customers’ concerns and attitudes to Risk and Involvement is important to creating successful marketing messages </li></ul><ul><li>Clear objectives should be set for all communication tasks </li></ul>

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