The document discusses consumer and business buying behavior. It identifies several factors that influence consumer purchasing decisions, including cultural, social, and personal factors. It also outlines the key stages in a business's purchasing process, from problem recognition to performance review. Several major influences on business buyers are identified, such as environmental, organizational, interpersonal, and individual factors.

1. Consumer Behavior & Business Buying Behavior www.profmanishparihar.blogspot.com

2. Objectives of this module: What are the underlying psychological processes in making a purchase? How do consumers make purchasing decisions? Basically: Why consumers behave the way they behave?

3. What Influences Consumer Behavior? Cultural Factors Social Factors Personal Factors

4. What is Culture? Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions.

5. Subcultures Nationalities Religions Racial groups Geographic regions

6. Social Classes Upper uppers Lower uppers Upper middles Middle class Working class Upper lowers Lower lowers

7. Characteristics of Social Classes Within a class, people tend to behave alike Social class conveys perceptions of inferior or superior position Class may be indicated by a cluster of variables (occupation, income, wealth) Class designation is mobile over time

8. Social Factors Reference groups Social roles Statuses Family

9. Reference Groups Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups

10. Roles and Status What degree of status is associated with various occupational roles?

11. Personal Factors Age Values Life cycle stage Occupation Personality Self- concept Wealth Lifestyle

12. The Family Life Cycle

13. Brand Personality Sincerity Excitement Competence Sophistication Ruggedness

14. Lifestyle Influences Multi-tasking Time-starved Money-constrained

15. Faysal Bank of Pakistan has extended banking hours for time-pressed executives.

16. VERY IMPORTANT: Model of Consumer Behavior

17. Key Psychological Processes Motivation Memory Learning Perception

18. Motivation Freud’s Theory Behavior is guided by subconscious motivations Maslow’s Hierarchy of Needs Behavior is driven by the lowest, unmet need Herzberg’s Two-Factor Theory Behavior is guided by motivating and hygiene factors

19. Maslow’s Hierarchy of Needs

20. Herzberg’s Two-Factor Theory

21. Perception Selective Attention Subliminal Perception Selective Retention Selective Distortion

22. VERY IMPORTANT Consumer Buying Process Problem Recognition Information Search Evaluation Purchase Decision Postpurchase Behavior

23. Sources of Information Personal Experiential Public Commercial

24. Successive Sets Involved in Consumer Decision Making

25. Stages between Evaluation of Alternatives and Purchase

26. Perceived Risk Functional Physical Financial Social Psychological Time

27. How Customers Use and Dispose of Products

28. Mental Accounting Consumers tend to… Segregate gains Integrate losses Integrate smaller losses with larger gains Segregate small gains from large losses

29. Just as consumers undergo several processes in purchase decisions, so do businesses.. Hence we also have to study the B2B i.e. Business Buying Behavior…

30. Business Markets and Business Buyer Behavior

31. Learning Goals Define the business market and how it differs from consumer markets Identify the major factors that influence business buyer behavior List and define the steps in the business buying decision process Compare the institutional and government markets and explain how they make their buying decisions

32. UPS – A typical seller of business solutions Customer Needs Consumers need fast, friendly, low-cost package delivery Business needs are more complex Shipping part of complex logistics process including purchasing, inventory, order status, invoices, payments, returns Services Its 360,000 people and 88,000 vehicles offer ground, air, freight worldwide Helps customer navigate the complexities of international shipping Offers a wide range of financial services Provides consulting services to improve logistics operations

33. Definition Business Buyer Behavior: The buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. Also included are retailing and wholesaling firms that acquire goods for the purpose of reselling or renting them to others at a profit. Goal 1: Define the business market

34. Sales in the business market far exceed sales in consumer markets. Business markets differ from consumer markets in many ways. Marketing structure and demand Nature of the buying unit Types of decisions and the decision process Characteristics of Business Markets Goal 1: Define the business market

35. Business Markets Compared to consumer markets: Business markets have fewer but larger customers Business customers are more geographically concentrated Demand is different Demand is derived Demand is price inelastic Demand fluctuates more Marketing Structure and Demand Nature of the Buying Unit Types of Decisions and the Decision Process Characteristics Goal 1: Define the business market

36. Business Markets Marketing Structure and Demand Nature of the Buying Unit Types of Decisions and the Decision Process Compared to consumer purchases: Involve more buyers in the decision process More professional purchasing effort Characteristics Goal 1: Define the business market

37. Business Markets Marketing Structure and Demand Nature of the Buying Unit Types of Decisions and the Decision Process Compared to consumer purchases More complex buying decisions The buying process is more formalized Buyers and sellers work more closely together and build long-term relationships Goal 1: Define the business market Characteristics

38. Major Types of Buying Situations Straight rebuy Reordering without modification Modified rebuy Requires modification to prior purchase New task First-time purchase Business Buyer Behavior Goal 1: Define the business market

39. Business Buyer Behavior Systems Selling Buying a packaged solution to a problem from a single seller. Often a key marketing strategy for businesses seeking to win and hold accounts. Goal 1: Define the business market

40. Business Buyer Behavior Buying Center The decision-making unit of a buying organization Includes all individuals and units that participate in the decision making Goal 1: Define the business market

41. Business Buyer Behavior Users Buyers Influencers Deciders Members of the Buying Center Gatekeepers Goal 1: Define the business market

42. Major Influences on Business Buyers Environmental Organizational Interpersonal Individual Economic trends Supply conditions Technological, political and competitive changes Culture and customs Key Factors Goal 2: Identify the major factors that influence business buyer behavior

43. Major Influences on Business Buyers Environmental Organizational Interpersonal Individual Objectives Policies Procedures Organizational structure Systems Key Factors Goal 2: Identify the major factors that influence business buyer behavior

44. Major Influences on Business Buyers Influence of members in the buying center Authority Status Empathy Persuasiveness Environmental Organizational Interpersonal Individual Key Factors Goal 2: Identify the major factors that influence business buyer behavior

45. Major Influences on Business Buyers Personal characteristics of members in the buying center Age and income Education Job position Personality Risk attitudes Buying styles Environmental Organizational Interpersonal Individual Key Factors Goal 2: Identify the major factors that influence business buyer behavior

46. Stages in the Business Buying Process Stage 1: Problem Recognition Stage 2: General Need Description Stage 3: Product Specification Value analysis helps to reduce costs Stage 4: Supplier Search Supplier development Goal 3: List and define the steps in the business buying decision process

47. Stage 5: Proposal Solicitation Stage 6: Supplier Selection Stage 7: Order-Routine Specification Blanket contracts are often used for maintenance, repair and operating items. Stage 8: Performance Review Stages in the Business Buying Process Goal 3: List and define the steps in the business buying decision process

48. E-procurement is growing rapidly Online auctions and online trading exchanges (e-marketplaces) account for much of the online purchasing activity E-procurement offers many benefits: Access to new suppliers Lower purchasing costs Quicker order processing and delivery Business Buying on the Internet - good book: “The world is flat” – Thomas Friedman Goal 3: List and define the steps in the business buying decision process

49. Further reading recommended: Philip Kotler Leon Schiffman www.profmanishparihar.blogspot.com