Buyers Behaviour

UNIT 4 – Buyer BehaviourUNIT 4 – Buyer Behaviour
 Understanding Industrial and Individual BuyerUnderstanding Industrial and Individual Buyer
behaviourbehaviour
 Influencing factorsInfluencing factors
 Online Buyer BehaviourOnline Buyer Behaviour
 Building and measuring customer satisfactionBuilding and measuring customer satisfaction
 Customer relationship managementCustomer relationship management
 Customer acquisition, Retaining & DefectionCustomer acquisition, Retaining & Defection
1.1Hallmark Business School

Consumer BehaviourConsumer Behaviour
 TheThe American Marketing AssociationAmerican Marketing Association
defines Consumer Behaviour as “thedefines Consumer Behaviour as “the
dynamic interaction ofdynamic interaction of affect and cognition,affect and cognition,
behavior and the environment by which humanbehavior and the environment by which human
beings conduct the exchange aspects of theirbeings conduct the exchange aspects of their
lives”.lives”.
 Cognitive- knowledge or informationCognitive- knowledge or information
 Affective- feelings or emotionsAffective- feelings or emotions
 Behavioral- actions regarding object or ideaBehavioral- actions regarding object or idea

Factors influencing ConsumerFactors influencing Consumer
Behaviour or Buyer BehaviourBehaviour or Buyer Behaviour
 Cultural FactorsCultural Factors
 Social FactorsSocial Factors
-Reference Groups-Reference Groups
-- FamilyFamily
-- Role and StatusRole and Status

Personal FactorsPersonal Factors
 Age and Life cycleAge and Life cycle
 Occupation:Occupation:
 LifestyleLifestyle
 PersonalityPersonality
Psychological FactorsPsychological Factors

Buyer BehaviourBuyer Behaviour
 Buying Behavior is the decision processes andBuying Behavior is the decision processes and
acts of people involved in buying and usingacts of people involved in buying and using
productsproducts

Need to understandNeed to understand
 Why consumers make the purchases that theyWhy consumers make the purchases that they
make?make?
 What factors influence consumer purchases?What factors influence consumer purchases?
 The changing factors in our society.The changing factors in our society.

Consumer Buying BehaviorConsumer Buying Behavior
 The decision processes and purchasing activitiesThe decision processes and purchasing activities
of people who purchase products for personalof people who purchase products for personal
or household use and not for business purposesor household use and not for business purposes

Industrial Buying BehaviourIndustrial Buying Behaviour
 Identifying a need or a problemIdentifying a need or a problem
 Developing product specificationDeveloping product specification
 Search for products and suppliersSearch for products and suppliers
 Evaluation of products and suppliersEvaluation of products and suppliers
 Ready to place an orderReady to place an order
 Evaluation of product and supplier performanceEvaluation of product and supplier performance
 Follow on purchaseFollow on purchase

1.13
 Straight rebuy is aStraight rebuy is a routine purchaseroutine purchase decisiondecision
such as a reorder without any modificationsuch as a reorder without any modification
 Modified rebuy is aModified rebuy is a purchase decision thatpurchase decision that
requires some researchrequires some research where the buyerwhere the buyer
wants towants to modify the product specification,modify the product specification,
price, terms, or suppliersprice, terms, or suppliers
 New task is a purchase decision thatNew task is a purchase decision that
requires thorough research such as arequires thorough research such as a newnew
productproduct
Hallmark Business School

Roles people play in the decision-Roles people play in the decision-
making process:making process:
 Initiator – the person who suggests aInitiator – the person who suggests a
product/serviceproduct/service
 Influencer – a person whose advice influenceInfluencer – a person whose advice influence
purchasing decisionpurchasing decision
 Decider – the person who makes the buyingDecider – the person who makes the buying
decisiondecision
 Buyer – the person who makes an actual purchaseBuyer – the person who makes an actual purchase
 User – the person who consumes or uses aUser – the person who consumes or uses a
product/serviceproduct/service

Consumer Adoption ProcessConsumer Adoption Process
 Consumer Adoption Process is used to build anConsumer Adoption Process is used to build an
effective strategy for early market penetration on.effective strategy for early market penetration on.
Adoption is an individual & decision to become aAdoption is an individual & decision to become a
regular user of the product. Stage in the adoptionregular user of the product. Stage in the adoption
process. Adopters of new products have been observedprocess. Adopters of new products have been observed
to move through following five stages.to move through following five stages.
1) Awareness1) Awareness
2) Interest2) Interest
3) Evaluation3) Evaluation
4) Trial4) Trial
5) Adoption5) Adoption

Online Buyer BehaviourOnline Buyer Behaviour
1. Time-starved consumers1. Time-starved consumers
Usually found in a house with two sourcesUsually found in a house with two sources
of income. They areof income. They are willing to pay higherwilling to pay higher
prices or costs more to save time shopping, noprices or costs more to save time shopping, no
matter whether they like it or not on-linematter whether they like it or not on-line
buying experience.buying experience.
2. Shopping avoiders2. Shopping avoiders
Do not like shopping and may use theDo not like shopping and may use the
Internet just to avoid the crowd,Internet just to avoid the crowd, queue orqueue or
traffic congestiontraffic congestion 1.16Hallmark Business School

3.3. New technologistNew technologist
Usually young people and comfortable withUsually young people and comfortable with
technology, online shopping because "it's cool".technology, online shopping because "it's cool".
4.4. Time-sensitive materialist click-and-Time-sensitive materialist click-and-
mortar consumers:mortar consumers: ((Click and mortarClick and mortar is a type of business is a type of business
model that includes both online and offline operationsmodel that includes both online and offline operations))
Only use the Internet to view the products theyOnly use the Internet to view the products they
prefer to make purchases from traditional storesprefer to make purchases from traditional stores
for taking security or other reasonsfor taking security or other reasons

1.18
55. Traditionals :. Traditionals : Just like a traditional store.Just like a traditional store.
Probably not going to do shopping onlineProbably not going to do shopping online..
6. Hunter-gatherers:6. Hunter-gatherers: 20 percent of the total20 percent of the total
number of on-line customers like tonumber of on-line customers like to
comparecompare prices and find the best prices.prices and find the best prices.
7. Brand loyalists:7. Brand loyalists: Purchase online for aPurchase online for a
particular brand as it gets more benefits.particular brand as it gets more benefits.
8. Single shoppers:8. Single shoppers: 16 percent of the total16 percent of the total
number of on-line customers. Liked thenumber of on-line customers. Liked the
Internet notInternet not only for shopping but also foronly for shopping but also for
banking, communication, playing games, newsbanking, communication, playing games, news
and other activities.and other activities.

1.20
When you will get satisfaction?When you will get satisfaction?

Customer SatisfactionCustomer Satisfaction
 Customer satisfaction is a person’s feelings ofCustomer satisfaction is a person’s feelings of
pleasure or disappointment that result frompleasure or disappointment that result from
comparing a product's perceived performance tocomparing a product's perceived performance to
their expectations.their expectations.

List the factors that determinesList the factors that determines
customer satisfactioncustomer satisfaction

How will you measure customerHow will you measure customer
satisfactionsatisfaction

Customer perceived value (CPV)Customer perceived value (CPV)
 Customer perceived valueCustomer perceived value (CPV) is the (CPV) is the
difference between the prospective customer’sdifference between the prospective customer’s
evaluation of all the benefits and all the costs ofevaluation of all the benefits and all the costs of
an offering and the perceived alternatives.an offering and the perceived alternatives.

 Total customer valueTotal customer value is the perceived is the perceived
monetary value of the bundle or monetary value of the bundle or economiceconomic,,
functional, and psychological benefits customersfunctional, and psychological benefits customers
expect from a given market offering.expect from a given market offering.

 Total customer costTotal customer cost is the bundle of costs is the bundle of costs
customers expect to incur in evaluating,customers expect to incur in evaluating,
obtaining , using, and disposing of the givenobtaining , using, and disposing of the given
marketing offering.marketing offering.

Customer touch pointCustomer touch point
 All possible areas of business where customersAll possible areas of business where customers
communicate with that businesscommunicate with that business

Importance of building customerImportance of building customer
satisfactionsatisfaction
 Customer-oriented managementCustomer-oriented management
 To overcome competitionTo overcome competition
 LoyaltyLoyalty
 Leads and ReferralsLeads and Referrals

Measuring customer satisfactionMeasuring customer satisfaction
 Comment card:Comment card:
A card is enclosed with the warranty card and packedA card is enclosed with the warranty card and packed
along with the product, during sales.along with the product, during sales.
The card collects information on name, address, age,The card collects information on name, address, age,
gender, occupation and the factor that influencedgender, occupation and the factor that influenced
customer s decision to buy the product‟customer s decision to buy the product‟

 Customer questionnaireCustomer questionnaire
 Focus groupsFocus groups
A group of customers is gathered in a meeting, aA group of customers is gathered in a meeting, a
series of questions are answeredseries of questions are answered
In this method, inherent feelings associated with aIn this method, inherent feelings associated with a
product or service, discussion and relaxationproduct or service, discussion and relaxation
techniques are used to identify customer s future‟techniques are used to identify customer s future‟
needs.needs.

Toll free numbers:Toll free numbers:
This method is most effective for obtainingThis method is most effective for obtaining
complaints and feedback.complaints and feedback.

Visits to customer place ofVisits to customer place of
business:business:
By this approach, the organization can proactivelyBy this approach, the organization can proactively
monitor the performance of the product, whichmonitor the performance of the product, which
is being used on the spot.is being used on the spot.
This enables them to identify specific problemsThis enables them to identify specific problems

Mass customizationMass customization
 http://www.nike.com/in/en_gb/c/nikeidhttp://www.nike.com/in/en_gb/c/nikeid

Stages in the development of aStages in the development of a
Customer RelationshipCustomer Relationship
1. The Pre-relationship Stage1. The Pre-relationship Stage
 The event that triggers a buyer to seek a new businessThe event that triggers a buyer to seek a new business
partner.partner.
2. The Early Stage2. The Early Stage
 Experience is accumulated between the buyer and sellerExperience is accumulated between the buyer and seller
although a great degree of uncertainty and distancealthough a great degree of uncertainty and distance
exists.exists.
3. The Development Stage3. The Development Stage
 Increased levels of transactions lead to a higher degreeIncreased levels of transactions lead to a higher degree
of commitment andof commitment and
the distance is reduced to a social exchange.the distance is reduced to a social exchange. 1.36Hallmark Business School

4. The Long-term Stage4. The Long-term Stage
 Characterised by the companies mutual‟Characterised by the companies mutual‟
importance to each other.importance to each other.
5. The Final Stage5. The Final Stage
 The interaction between the companies becomesThe interaction between the companies becomes
institutionalizedinstitutionalized

Initiating the relationshipInitiating the relationship
 Engage in strategic prospecting and qualifying;Engage in strategic prospecting and qualifying;
 Gather and study pre-call informationGather and study pre-call information
 Identify buying influencesIdentify buying influences
 Plan the initial sales callPlan the initial sales call
 Understanding of the customer s needs‟Understanding of the customer s needs‟
 Identify opportunities to build a relationshipIdentify opportunities to build a relationship
 Illustrate the value of a relationship with the customerIllustrate the value of a relationship with the customer

Developing the relationshipDeveloping the relationship
 Select an appropriate offeringSelect an appropriate offering
 Customise the relationshipCustomise the relationship
 Link the solutions with the customer’s needsLink the solutions with the customer’s needs
 Discuss customer concernsDiscuss customer concerns
 Summarize the solution to confirm benefitsSummarize the solution to confirm benefits
 Secure commitment.Secure commitment.

Enhancing the relationshipEnhancing the relationship
 Assess customer satisfactionAssess customer satisfaction
 Take action to ensure satisfactionTake action to ensure satisfaction
 Maintain open, two-way communicationMaintain open, two-way communication
 Work to add value and enhance mutualWork to add value and enhance mutual
opportunitiesopportunities

Customer acquisitionCustomer acquisition
 Customer acquisition is a broad term that is usedCustomer acquisition is a broad term that is used
to identify the processes and procedures used toto identify the processes and procedures used to
locate, qualify and ultimately secure the businesslocate, qualify and ultimately secure the business
of new customersof new customers

Strategies for customerStrategies for customer
acquisitionacquisition
 Focused approachFocused approach
 Providing a Win-Win PlatformProviding a Win-Win Platform
 Initiate forum for communicationInitiate forum for communication
 Attempt to minimize FUD (FearAttempt to minimize FUD (Fear
Uncertainty Doubt)Uncertainty Doubt)
 Projection of Benefits and not ProductsProjection of Benefits and not Products
 Focus on Decision processFocus on Decision process

Customer RetentionCustomer Retention
 PeoplePeople involved in theinvolved in the processprocess
 ProductProduct
 OrganizationOrganization
 Concentration on competitorsConcentration on competitors
 Cost analysisCost analysis
 Concentration on paying ability of theConcentration on paying ability of the
customerscustomers
 Knowledge on purchase behavior patternKnowledge on purchase behavior pattern

1.44
 Customer loyalty programmesCustomer loyalty programmes

Customer DefectionCustomer Defection
 Customer defection in short and simple wordsCustomer defection in short and simple words
can be defined as a loss of clients or customerscan be defined as a loss of clients or customers
ReasonsReasons
 PricePrice
 QualityQuality
 Post purchase experiencePost purchase experience
 Service failureService failure

Buyers Behaviour

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