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Consumer
&
Industrial
Buying Behavior.
Presented By:
Sanjeev K.c.
• Buyer behavior is the systematic approach consumers follow
when entering the purchase process and making buying decisions.
• Buyer Behavior is the study of how individuals & groups make
their decisions to use resources in terms of Time, money & effort.
• There are two facets of buying Behavior:
i) Consumer Buying Behavior.
ii) Industrial Buying Behavior.
Buyer
Behavior.
Consumer Buying Behavior.
• Consumer Behavior refers to the buying behavior of customers, those
people who purchase products for personal or household use.
• Consumer buying behavior has numerous factors as a part of it which
are believed to have some level of effect on the purchasing decisions
of the customers.
• “Consumer behavior is the study of how people buy, what
they buy, when they buy and why they buy.” ..Philip Kotler.
• “The assumption that people have series of needs which lead to drive
state.” ..Faison and Edmund.
Consumer Buying Decision
Process.
1) Need or problem recognition:
• Need recognition is the first step of the buying process of
consumers.
• Consumer buying process always starts with the emergence and
recognition of a problem or need.
• Internal stimulation: Hunger, thirsty, shelter.
External stimulation: Advertisement and mix.
2) Search for information:
• When consumers realize the existence of a need or problem they
need adequate information to solve the problem.
• Consumer collects information on the products, brands, stores, prices,
quality, and other attributes and benefits of the product or brand
alternatives.
• Information search by the consumers:
i)Passive search.
ii)Active search: There are mainly two types of active
research:
a)Internal search: Experience, previous memory.
b)External search: Consumers seeks information
from the following:
a) Personal sources: Friends, family, relatives.
b) Marketing sources: Advertisement, sales forces, middleman.
c) Public sources: TV, radio, newspaper, internet.
d) Experimental sources: Handling, examine, testing.
3) Evaluation of alternatives:
• Consumers use the information collected by different sources to
clarify various alternatives & relative alternatives.
• Consumers tend to evaluate alternatives in terms of product class
attributes, brand beliefs and utility functions.
i)Product class attributes: Features, brand, price, quality, service,
performance, warranty.
ii)Brand belief: past experience, develop positive and negative
feeling, opinion of other people, family, friends, references.
iii)Utility functions: expected total satisfaction.
iv)Reducing range of alternatives.
4)Purchase Decision:
• Evaluation leads the consumers to form a clear set of product and
brand preferences.
• Consumers tend to purchase the brand for which they have made
purchase intention.
• Three Factors influence the purchase decision of the firm:
i) Social influence: Family members, Friends, & neighbors.
ii) Situation influence: Unexpected change in variables leads to
revise the purchase intention.
iii) Perceived risk.
5) Post Purchase Behavior:
• Understanding the post-purchase behavior of consumers has
become extremely important for marketers as well as the social
planners.
• There are five areas of marketing interest in the post purchase
phase.
• They are Cognitive dissonance, Consumption and usage,
Satisfaction and dissatisfaction, Complaint behavior, and
Product disposition.
Industrial Buying Behavior.
• Industrial buying behavior is the pattern of actions by a company
involved in manufacturing, processing and other heavy industry.
• Buying is a major activity in all the organization.
• Industrial buying is the decisions making process by which formal
organizations establish the need for purchased products and services
and identify, evaluate and choose among alternative brands and
suppliers. …Webster & Wind
Industrial Buying Decision
Process.
1)Need / Problem recognition:
• Organizational buying process starts with the identification of a need or
a problem that can be solved with the procurement of a product or
service.
• Industrial buying process begins with need recognition through internal
and external factors.
i) Internal factor: Develop to new product, machine break down,
unsatisfied material and opportunity.
ii) External factor: Trade show, advertising, receive mail from
producer, calling. Example; accountant needs calculator.
2) Preparing Product Specifications:
• Once the need has been identified, the technical personnel in the
organization prepare detail specification of the product or
service requirements.
• It involves what types of product, quality, price, standard, size,
and quantity requires by firm.
• Product specification is also known as technical specification
that involves product value analysis (PVA).
3) Supplier search:
• Purchase committee conducts a search for potential suppliers
for the required product or services.
• Regularly purchased items are usually purchased from a regular
supplier.
• Purchase committee may search through trade directories or on
the internet for the new product.
4) Proposal Solicitation / Evaluation and
Analysis of Supplier Proposal:
• Purchase manager solicits proposals from potential suppliers of
the product or service.
• Firm will evaluate the proposal in terms of capability, price,
service, documentation, presentation, confidence, company’s
position etc.
5) Supplier Selection and Purchase:
• Purchase committee carefully evaluate the proposals submitted
by potential suppliers in terms of price, delivery capability and
other technical capabilities.
• Before selecting a supplier, the buyer center will specify desired
supplier attributes and indicate their relative importance.
• The purchase committee works with the technical committee to
select the supplier.
Consumer& Industrial Buying Decisions.

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Consumer& Industrial Buying Decisions.

  • 2. • Buyer behavior is the systematic approach consumers follow when entering the purchase process and making buying decisions. • Buyer Behavior is the study of how individuals & groups make their decisions to use resources in terms of Time, money & effort. • There are two facets of buying Behavior: i) Consumer Buying Behavior. ii) Industrial Buying Behavior. Buyer Behavior.
  • 3. Consumer Buying Behavior. • Consumer Behavior refers to the buying behavior of customers, those people who purchase products for personal or household use. • Consumer buying behavior has numerous factors as a part of it which are believed to have some level of effect on the purchasing decisions of the customers. • “Consumer behavior is the study of how people buy, what they buy, when they buy and why they buy.” ..Philip Kotler. • “The assumption that people have series of needs which lead to drive state.” ..Faison and Edmund.
  • 5. 1) Need or problem recognition: • Need recognition is the first step of the buying process of consumers. • Consumer buying process always starts with the emergence and recognition of a problem or need. • Internal stimulation: Hunger, thirsty, shelter. External stimulation: Advertisement and mix. 2) Search for information: • When consumers realize the existence of a need or problem they need adequate information to solve the problem.
  • 6. • Consumer collects information on the products, brands, stores, prices, quality, and other attributes and benefits of the product or brand alternatives. • Information search by the consumers: i)Passive search. ii)Active search: There are mainly two types of active research: a)Internal search: Experience, previous memory. b)External search: Consumers seeks information from the following: a) Personal sources: Friends, family, relatives. b) Marketing sources: Advertisement, sales forces, middleman. c) Public sources: TV, radio, newspaper, internet. d) Experimental sources: Handling, examine, testing.
  • 7. 3) Evaluation of alternatives: • Consumers use the information collected by different sources to clarify various alternatives & relative alternatives. • Consumers tend to evaluate alternatives in terms of product class attributes, brand beliefs and utility functions. i)Product class attributes: Features, brand, price, quality, service, performance, warranty. ii)Brand belief: past experience, develop positive and negative feeling, opinion of other people, family, friends, references. iii)Utility functions: expected total satisfaction. iv)Reducing range of alternatives.
  • 8. 4)Purchase Decision: • Evaluation leads the consumers to form a clear set of product and brand preferences. • Consumers tend to purchase the brand for which they have made purchase intention. • Three Factors influence the purchase decision of the firm: i) Social influence: Family members, Friends, & neighbors. ii) Situation influence: Unexpected change in variables leads to revise the purchase intention. iii) Perceived risk.
  • 9. 5) Post Purchase Behavior: • Understanding the post-purchase behavior of consumers has become extremely important for marketers as well as the social planners. • There are five areas of marketing interest in the post purchase phase. • They are Cognitive dissonance, Consumption and usage, Satisfaction and dissatisfaction, Complaint behavior, and Product disposition.
  • 10. Industrial Buying Behavior. • Industrial buying behavior is the pattern of actions by a company involved in manufacturing, processing and other heavy industry. • Buying is a major activity in all the organization. • Industrial buying is the decisions making process by which formal organizations establish the need for purchased products and services and identify, evaluate and choose among alternative brands and suppliers. …Webster & Wind
  • 12. 1)Need / Problem recognition: • Organizational buying process starts with the identification of a need or a problem that can be solved with the procurement of a product or service. • Industrial buying process begins with need recognition through internal and external factors. i) Internal factor: Develop to new product, machine break down, unsatisfied material and opportunity. ii) External factor: Trade show, advertising, receive mail from producer, calling. Example; accountant needs calculator.
  • 13. 2) Preparing Product Specifications: • Once the need has been identified, the technical personnel in the organization prepare detail specification of the product or service requirements. • It involves what types of product, quality, price, standard, size, and quantity requires by firm. • Product specification is also known as technical specification that involves product value analysis (PVA). 3) Supplier search: • Purchase committee conducts a search for potential suppliers for the required product or services.
  • 14. • Regularly purchased items are usually purchased from a regular supplier. • Purchase committee may search through trade directories or on the internet for the new product. 4) Proposal Solicitation / Evaluation and Analysis of Supplier Proposal: • Purchase manager solicits proposals from potential suppliers of the product or service. • Firm will evaluate the proposal in terms of capability, price, service, documentation, presentation, confidence, company’s position etc.
  • 15. 5) Supplier Selection and Purchase: • Purchase committee carefully evaluate the proposals submitted by potential suppliers in terms of price, delivery capability and other technical capabilities. • Before selecting a supplier, the buyer center will specify desired supplier attributes and indicate their relative importance. • The purchase committee works with the technical committee to select the supplier.