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Dr Stephanie J. Morgan
Marketing Principles and Practices
Lecture 2 – Customer focus:
The psychology of buyer behaviour
Slide: 2
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Lecture 2 - Aims and Objectives
Aims:
Outline theory and methods used in understanding consumer and
organizational buyer behaviour
Provide an understanding of links between decision making and
buying decisions
Objectives
Assess the usefulness of theory and methods in understanding
purchasing behaviour
Outline characteristics and dimensions of organizational purchasing
processes
Identify some choice criteria and personal/social influences on buyer
behaviour
Slide: 3
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Why do you buy what you buy?
Think for a moment about your most recent purchases:
 What influenced you?
 Why that item?
 Did you feel it reflected on you as a person?
 Would it make your friends or family happy/jealous?
 What did the marketing people do to influence you?
 Might there be other things that they did that you are not aware of?
Slide: 4
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2D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Marketing Concept
The achievement of corporate
goals through meeting and
exceeding customer needs
better than the competition
The Marketing Concept
Customer orientation
Corporate activities are
focused upon providing
customer satisfaction
Integrated effort
All staff accept the
responsibility for creating
customer satisfaction
Goal achievement
The belief that corporate
goals can be achieved
through customer
satisfaction
Marketing concept
The achievement of corporate
goals through meeting and
exceeding customer needs
better than the competition
Customer
orientation
Corporate activities
are focused upon
providing customer
satisfaction
Integrated
effort
All staff accept the
responsibility for
creating customer
satisfaction
Goal
achievement
The belief that
corporate goals can
be achieved through
customer satisfaction
Slide: 5
Slide 5More free downloads and templates at: 1stOutsource Research
2D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Understanding customers
How do
they buy?
What are
their choice
criteria?
Customers
Who is
important?
Where do
they buy?
When do
they buy?
Slide: 6
Slide 6More free downloads and templates at: 1stOutsource Research
Why is it important to understand customers?
 Fundamental marketing decision – choice of customer.
 Vital to enable segmentation, positioning and targeting.
 Informs priorities for product design, distribution, support.
 Even in mass marketing, important for targeting and
communications.
 Remember may be different people involved in a purchase.
Slide: 7
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Figure 3.1 Brassington Consumer Buying
Decision-Making Process
Situational
influences
Individual
influences
Group
influences Marketing mix
Decision-making
process
Slide: 8
Slide 8More free downloads and templates at: 1stOutsource Research
7D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Alternative views on Influences
on consumer purchasing behaviour
 information
processing
 motivation
 beliefs and
attitudes
 personality
 lifestyle
 lifecycle
 culture
 social class
 geodemo-
graphics
 reference
groups
Personal
influences Social
influences
Consumer
The buying
situation
Slide: 9
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The Consumer Decision-Making Process
Need
recognition/problem
awareness
D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill 9
Information
search
Evaluation
Of alternatives
Purchase
Post-purchase
evaluation of
alternatives
Relative Importance?
Need inhibitors?
Stimulation?
Internal, external,
Awareness Set
Impact Internet
Evoked Set
Level of Involvement?
Context, situation,
Ease,
Cognitive Dissonance,
Confirmation Seeking
Remorse? Disposal?
Issues:
Rational?
Simplistic?
How determine?
Slide: 10
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Information Search
 What kind of purchase
will address problem?
 How can the product be
obtained?
 What information is
needed?
Source: C&G http://www.cheltglos.co.uk
Slide: 11
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Information Evaluation
Information Evaluation involves a process of
narrowing down a wide list of potential options to
an evoked set, typically by constructing
performance criteria with which to judge choices.
Think about how you gather and evaluate
information
– does it vary by type of product, price,
situation?
Slide: 12
Slide 12More free downloads and templates at: 1stOutsource Research
10D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
The Consumer Decision-Making Process
and Level of Purchase Involvement
Stage
Need recognition
Problem awareness
Information
Search
Evaluation of
alternatives
Post-purchase
Evaluation
Minor
Limited
Few alternatives
Considered
Many alternatives
And choice criteria
Extensive
Major personality
important
Low Involvement High Involvement
Limited
evaluation
Extensive
evaluation
Slide: 13
Slide 13More free downloads and templates at: 1stOutsource Research
3D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Normative
beliefs
Personal
beliefs
Purchase
intentions
Purchase
Attitudes
Subjective
norms
High involvement: the Fishbein and Ajzen model of reasoned action
TrialAwareness
Repeat
Purchase
Low involvement: the Ehrenberg and Goodhart repeat purchase model
‘Attitude-Behaviour
Problem’
Evaluation and purchase models
Slide: 14
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8D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Determinants of the extent of
problem solving
Self-image
Perceived risk
Social factors
Hedonism Differentiation
and number
of alternatives
Level of
involvement
Time
pressure
Extent of
problem
solving
Slide: 15
Slide 15More free downloads and templates at: 1stOutsource Research
Other models of buying decision
process:
 Health Model, Stages of Change (DiClemente & Prochaska):
Precontemplation Contemplation Preparation Action Maintenance
 Customer Activity Cycle Model (Vandermerwe)
Plot on cycle
x product
Pre: Deciding what
to do
During: Doing it
process
Post:
Keeping it
going…
Slide: 16
Slide 16More free downloads and templates at: 1stOutsource Research
Choice Criteria Used When
Evaluating Alternatives
5D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Technical-
Reliability
Durability
Performance
Style/looks
Comfort
Delivery
Convenience
Taste
Economic-
Price
Value for money
Running costs
Residual value
Life style costs
Social-
Status
Social belonging
Convention
Fashion
Personal-
Self-image
Morals
Emotions
Slide: 17
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Review of the
Decision-Making Process
I’m hungry
What’s available?
Cakes or chocolate?
Snickers!
I should’ve had cake.
Problem recognition
Information search
Information evaluation
Decision
Post-purchase evaluation
Slide: 18
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Psychological influences
 Information processing
1. Perception – selective attention, selective distortion,
information framing, selective retention.
2. Learning – classical and operant conditioning, shaping, rote
and vicarious learning, reasoning.
 Motivation.
 Beliefs and attitudes.
 Personality.
 Life-style (psychographics) links beliefs, activities, values and
demographics.
Slide: 19
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Personality
Personality can play a role
in consumer behaviour,
particularly with high
involvement products (e.g.,
choice of holiday)
Source: © Hayes & Jarvis (Travel) Ltd http://www.hayesandjarvis.co.uk
Slide: 20
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Theories of Motivation
Freud:
Hidden Unconscious
Esteem
Social
Safety
Physiological
Self-
Actualization
Dis-satisfiers
Satisfiers
Herzberg:
Issues:
Sample
Method
Empirical
Support?
Maslow
Slide: 21
Slide 21More free downloads and templates at: 1stOutsource Research
Attitudes
Cognitive
Conative
(connects
C & A to
Behaviour)
Affective
(emotions)
What, who etc… How do I feel? Why? What shall I do?
Slide: 22
Slide 22More free downloads and templates at: 1stOutsource Research
Skoda Responded to
Negative Attitudes
Slide: 23
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Social Influences
 Culture – traditions, taboos, values of society
 Social Class – discriminates consumption patterns
 Geodemographics – postcode clustering
 Reference Groups – friends, family, work colleagues, clubs and
societies
 Life-cycle, people behave differently within society if they are
teenagers, grand-parents etc.
Note – no one classification system works across all product fields and
sometimes best to supplement or use a variety.
Slide: 24
Slide 24More free downloads and templates at: 1stOutsource Research
Consumer or Organisational Products
Why was the product Purchased ?
 For personal or
household use
 For use in the operation of a
business or organisation.
 To manufacture other products
 For resale to others
ORGANISATIONAL
PRODUCT
CONSUMER
PRODUCT
2D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Slide: 25
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B2B Marketing Defined
B2B marketing is the management
process responsible for the facilitation
of exchange between producers of
goods and services and their
organisational customers
(Brassington & Pettit, 2006)
Slide: 26
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4D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Characteristics of Organisational Buying
Derived demand Negotiations
Risks
Reciprocal
buying
Nature and size
of customers
Complexity
of buying
Economic
and technical choice
criteria
Buying to
specific
requirements
Organisational
Purchases
Slide: 27
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Implications for Marketing
 Sales force skills, team efforts, multi-level negotiation, account
management to develop relationships.
 Risk analysis, withdrawal from bids,
 Increased likelihood of design for specific customers.
 Marketing mix may vary for each party in a DMU
Bear in mind also changing nature of organisations:
 Just-in-Time buying, increased use of technology, growth in
centralised purchasing etc.
Slide: 28
Slide 28More free downloads and templates at: 1stOutsource Research
Types of B2B Customers
 Commercial enterprises
 Government bodies
 Institutions
Slide: 29
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Figure 4.2 Brassington
A Clothing Manufacturer and its Suppliers
Suppliers of
raw materials
and
components
Suppliers of
manufacturing
equipment
Suppliers
of labour
Suppliers of
other equipment
and supplies
Suppliers of
services
Manufacturer
Slide: 30
Slide 30More free downloads and templates at: 1stOutsource Research
Source: © Goodyear Dunlop Tyres Europe
B.V. http://eu.goodyear.com
Derived Demand
Goodyear’s RunOnFlat Tyres are
featured on
BMWs,
Ferraris,
Corvettes,
Maseratis, and
Mercedes
Slide: 31
Slide 31More free downloads and templates at: 1stOutsource Research
Joint Demand
Demand for Samsung’s
Solid State Disk (SSD) is
tightly coupled with the
demand for computers
and other devices with
memory chips
Slide: 32
Slide 32More free downloads and templates at: 1stOutsource Research
Buyer
Decider
(Decision
Maker)
Gatekeeper
D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Users
actually use the
product. They may
be the one who initiates
the purchase process
and may develop the
product
specification.
Influencers
supply information
and advice. Outsiders
such as consultants
sometimes perform
the role.
Gatekeepers
control the flow
of information to the
buying centre. Purchasing
department Staff frequently
fill the role but it could be
any member
of the
organisation.
Buyers
choose suppliers
and negotiate purchase
terms often reducing
the actual purchase
to a clerical task.
Deciders
(Decision Makers)
have the authority
to approve
the purchase.
Deciders
(Decision Makers)
have the authority
to approve
the purchase.
The Buying Centre – DMU’s
Slide: 33
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Roles in the Buying Process
 Purchasing - handle relationships with suppliers
 Production/operations - meeting targets for the end product in both
quantity and quality terms
 Engineering - the specification and design
 Research and Development (R&D) – look for new solutions to
problems
 Finance - devolve budgets to appropriate managers
 Marketing - outputs of the production process
Slide: 34
Slide 34More free downloads and templates at: 1stOutsource Research
Government/Institutional market
Schools, hospitals, prisons etc.
Tensions include
Cost vs. quality
Low Budget
Complex Buy Processes
Captive
Clientele
Continual Change and
public scrutiny
Slide: 35
Slide 35More free downloads and templates at: 1stOutsource Research
6D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Recognition of a problem (need)
Determination of specification and quantity of needed item
Search for and qualification of potential sources
Acquisition and analysis of proposals
Evaluation of proposals and selection of supplier(s)
Selection of an order routine
Performance feedback and evaluation
Buy phases: the organizational
decision-making process
Slide: 36
Slide 36More free downloads and templates at: 1stOutsource Research
Major influences on buying behaviour
Environmental:
Demand
Economic outlook
Interest rates
Rate of Tech
change
Political
Competitive
Developments
Social
Responsibility
Organizational:
Objectives
Policies
Procedures
Structures
Systems
Politics
Interpersonal:
Interests
Authority
Status
Empathy
Persuasiveness
Nationality
Individual:
Age
Income
Education
Position
Personality
Risk attitudes
Plus Types of Purchasing
process – routine, strategic
etc.
Note similarities here to
consumer behaviour
Slide: 37
Slide 37More free downloads and templates at: 1stOutsource Research
Management styles in the European
Community, US and Japan
6D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Group
Individual
Leadership
Organic Systematic
Organisation
Source: Mole, J. (1990) Mind Your Manners
Italy
Portugal
Greece
Netherlands
Spain France
Germany
USA
Ireland
Belgium
Luxembourg
DenmarkUK
Slide: 38
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Building Organizational Relationships
Customer
Services:
Technical, expertise,
resource, etc.
Past, Present,
Future -
Expectation
Management
Competitive
Awareness:
Setting
requirements
Planning and
Strategic
moves
Account
Management:
Understanding and
developing DMU
Consider also stages of relationships
Slide: 39
Slide 39More free downloads and templates at: 1stOutsource Research
Psychology of Organizational Relationships
Individual personality,
role set, motivation,
cognition, learning,
decision making
Emotions
Group:
Contagion,
Conformity,
Polarization
Conflict
Inter-personal:
interactions, tactics,
Exchange/equity,
influence processes
Trust
Societal:
Culture, norms,
Stereotyping,
Prejudice…
Discourses
Stories
Slide: 40
Slide 40More free downloads and templates at: 1stOutsource Research
Ethical considerations may overlap both types –
consumer and industrial
 Issues with targeting vulnerable groups
 Manipulation
 Intrusive selling or direct marketing
 Deception by salespeople or Account Managers
 Hard selling
 Bribery
 Confidentiality
Slide: 41
Slide 41More free downloads and templates at: 1stOutsource Research
Evaluating usefulness of theories
(must do in essay to gain good marks)
 Applicability will vary by product/service type.
 Should be aware of weaknesses of each form of categorisation and
main theories.
 Often descriptive or prescriptive, always consider variety in
cases/processes.
 Often based on small samples and limited timescales.
 However – most are useful tools to help you think through the
customer experience and requirements, and design your marketing
mix in the most appropriate manner.
Slide: 42
Slide 42More free downloads and templates at: 1stOutsource Research
Aims and Objectives Achieved?
Aims:
 Outline theory and methods used in understanding consumer and
organizational buyer behaviour
 Provide an understanding of links between decision making and buying
decisions
Objectives
 Assess the usefulness of theory and methods in understanding
purchasing behaviour
 Outline characteristics and dimensions of organizational purchasing
processes
 Identify some choice criteria and personal/social influences on buyer
behaviour

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Focus on customers the psychology of buying behaviour

  • 1. Slide: 1 Slide 1More free downloads and templates at: 1stOutsource Research Dr Stephanie J. Morgan Marketing Principles and Practices Lecture 2 – Customer focus: The psychology of buyer behaviour
  • 2. Slide: 2 Slide 2More free downloads and templates at: 1stOutsource Research Lecture 2 - Aims and Objectives Aims: Outline theory and methods used in understanding consumer and organizational buyer behaviour Provide an understanding of links between decision making and buying decisions Objectives Assess the usefulness of theory and methods in understanding purchasing behaviour Outline characteristics and dimensions of organizational purchasing processes Identify some choice criteria and personal/social influences on buyer behaviour
  • 3. Slide: 3 Slide 3More free downloads and templates at: 1stOutsource Research Why do you buy what you buy? Think for a moment about your most recent purchases:  What influenced you?  Why that item?  Did you feel it reflected on you as a person?  Would it make your friends or family happy/jealous?  What did the marketing people do to influence you?  Might there be other things that they did that you are not aware of?
  • 4. Slide: 4 Slide 4More free downloads and templates at: 1stOutsource Research 2D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Marketing Concept The achievement of corporate goals through meeting and exceeding customer needs better than the competition The Marketing Concept Customer orientation Corporate activities are focused upon providing customer satisfaction Integrated effort All staff accept the responsibility for creating customer satisfaction Goal achievement The belief that corporate goals can be achieved through customer satisfaction Marketing concept The achievement of corporate goals through meeting and exceeding customer needs better than the competition Customer orientation Corporate activities are focused upon providing customer satisfaction Integrated effort All staff accept the responsibility for creating customer satisfaction Goal achievement The belief that corporate goals can be achieved through customer satisfaction
  • 5. Slide: 5 Slide 5More free downloads and templates at: 1stOutsource Research 2D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Understanding customers How do they buy? What are their choice criteria? Customers Who is important? Where do they buy? When do they buy?
  • 6. Slide: 6 Slide 6More free downloads and templates at: 1stOutsource Research Why is it important to understand customers?  Fundamental marketing decision – choice of customer.  Vital to enable segmentation, positioning and targeting.  Informs priorities for product design, distribution, support.  Even in mass marketing, important for targeting and communications.  Remember may be different people involved in a purchase.
  • 7. Slide: 7 Slide 7More free downloads and templates at: 1stOutsource Research Figure 3.1 Brassington Consumer Buying Decision-Making Process Situational influences Individual influences Group influences Marketing mix Decision-making process
  • 8. Slide: 8 Slide 8More free downloads and templates at: 1stOutsource Research 7D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Alternative views on Influences on consumer purchasing behaviour  information processing  motivation  beliefs and attitudes  personality  lifestyle  lifecycle  culture  social class  geodemo- graphics  reference groups Personal influences Social influences Consumer The buying situation
  • 9. Slide: 9 Slide 9More free downloads and templates at: 1stOutsource Research The Consumer Decision-Making Process Need recognition/problem awareness D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill 9 Information search Evaluation Of alternatives Purchase Post-purchase evaluation of alternatives Relative Importance? Need inhibitors? Stimulation? Internal, external, Awareness Set Impact Internet Evoked Set Level of Involvement? Context, situation, Ease, Cognitive Dissonance, Confirmation Seeking Remorse? Disposal? Issues: Rational? Simplistic? How determine?
  • 10. Slide: 10 Slide 10More free downloads and templates at: 1stOutsource Research Information Search  What kind of purchase will address problem?  How can the product be obtained?  What information is needed? Source: C&G http://www.cheltglos.co.uk
  • 11. Slide: 11 Slide 11More free downloads and templates at: 1stOutsource Research Information Evaluation Information Evaluation involves a process of narrowing down a wide list of potential options to an evoked set, typically by constructing performance criteria with which to judge choices. Think about how you gather and evaluate information – does it vary by type of product, price, situation?
  • 12. Slide: 12 Slide 12More free downloads and templates at: 1stOutsource Research 10D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill The Consumer Decision-Making Process and Level of Purchase Involvement Stage Need recognition Problem awareness Information Search Evaluation of alternatives Post-purchase Evaluation Minor Limited Few alternatives Considered Many alternatives And choice criteria Extensive Major personality important Low Involvement High Involvement Limited evaluation Extensive evaluation
  • 13. Slide: 13 Slide 13More free downloads and templates at: 1stOutsource Research 3D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Normative beliefs Personal beliefs Purchase intentions Purchase Attitudes Subjective norms High involvement: the Fishbein and Ajzen model of reasoned action TrialAwareness Repeat Purchase Low involvement: the Ehrenberg and Goodhart repeat purchase model ‘Attitude-Behaviour Problem’ Evaluation and purchase models
  • 14. Slide: 14 Slide 14More free downloads and templates at: 1stOutsource Research 8D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Determinants of the extent of problem solving Self-image Perceived risk Social factors Hedonism Differentiation and number of alternatives Level of involvement Time pressure Extent of problem solving
  • 15. Slide: 15 Slide 15More free downloads and templates at: 1stOutsource Research Other models of buying decision process:  Health Model, Stages of Change (DiClemente & Prochaska): Precontemplation Contemplation Preparation Action Maintenance  Customer Activity Cycle Model (Vandermerwe) Plot on cycle x product Pre: Deciding what to do During: Doing it process Post: Keeping it going…
  • 16. Slide: 16 Slide 16More free downloads and templates at: 1stOutsource Research Choice Criteria Used When Evaluating Alternatives 5D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Technical- Reliability Durability Performance Style/looks Comfort Delivery Convenience Taste Economic- Price Value for money Running costs Residual value Life style costs Social- Status Social belonging Convention Fashion Personal- Self-image Morals Emotions
  • 17. Slide: 17 Slide 17More free downloads and templates at: 1stOutsource Research Review of the Decision-Making Process I’m hungry What’s available? Cakes or chocolate? Snickers! I should’ve had cake. Problem recognition Information search Information evaluation Decision Post-purchase evaluation
  • 18. Slide: 18 Slide 18More free downloads and templates at: 1stOutsource Research Psychological influences  Information processing 1. Perception – selective attention, selective distortion, information framing, selective retention. 2. Learning – classical and operant conditioning, shaping, rote and vicarious learning, reasoning.  Motivation.  Beliefs and attitudes.  Personality.  Life-style (psychographics) links beliefs, activities, values and demographics.
  • 19. Slide: 19 Slide 19More free downloads and templates at: 1stOutsource Research Personality Personality can play a role in consumer behaviour, particularly with high involvement products (e.g., choice of holiday) Source: © Hayes & Jarvis (Travel) Ltd http://www.hayesandjarvis.co.uk
  • 20. Slide: 20 Slide 20More free downloads and templates at: 1stOutsource Research Theories of Motivation Freud: Hidden Unconscious Esteem Social Safety Physiological Self- Actualization Dis-satisfiers Satisfiers Herzberg: Issues: Sample Method Empirical Support? Maslow
  • 21. Slide: 21 Slide 21More free downloads and templates at: 1stOutsource Research Attitudes Cognitive Conative (connects C & A to Behaviour) Affective (emotions) What, who etc… How do I feel? Why? What shall I do?
  • 22. Slide: 22 Slide 22More free downloads and templates at: 1stOutsource Research Skoda Responded to Negative Attitudes
  • 23. Slide: 23 Slide 23More free downloads and templates at: 1stOutsource Research Social Influences  Culture – traditions, taboos, values of society  Social Class – discriminates consumption patterns  Geodemographics – postcode clustering  Reference Groups – friends, family, work colleagues, clubs and societies  Life-cycle, people behave differently within society if they are teenagers, grand-parents etc. Note – no one classification system works across all product fields and sometimes best to supplement or use a variety.
  • 24. Slide: 24 Slide 24More free downloads and templates at: 1stOutsource Research Consumer or Organisational Products Why was the product Purchased ?  For personal or household use  For use in the operation of a business or organisation.  To manufacture other products  For resale to others ORGANISATIONAL PRODUCT CONSUMER PRODUCT 2D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
  • 25. Slide: 25 Slide 25More free downloads and templates at: 1stOutsource Research B2B Marketing Defined B2B marketing is the management process responsible for the facilitation of exchange between producers of goods and services and their organisational customers (Brassington & Pettit, 2006)
  • 26. Slide: 26 Slide 26More free downloads and templates at: 1stOutsource Research 4D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Characteristics of Organisational Buying Derived demand Negotiations Risks Reciprocal buying Nature and size of customers Complexity of buying Economic and technical choice criteria Buying to specific requirements Organisational Purchases
  • 27. Slide: 27 Slide 27More free downloads and templates at: 1stOutsource Research Implications for Marketing  Sales force skills, team efforts, multi-level negotiation, account management to develop relationships.  Risk analysis, withdrawal from bids,  Increased likelihood of design for specific customers.  Marketing mix may vary for each party in a DMU Bear in mind also changing nature of organisations:  Just-in-Time buying, increased use of technology, growth in centralised purchasing etc.
  • 28. Slide: 28 Slide 28More free downloads and templates at: 1stOutsource Research Types of B2B Customers  Commercial enterprises  Government bodies  Institutions
  • 29. Slide: 29 Slide 29More free downloads and templates at: 1stOutsource Research Figure 4.2 Brassington A Clothing Manufacturer and its Suppliers Suppliers of raw materials and components Suppliers of manufacturing equipment Suppliers of labour Suppliers of other equipment and supplies Suppliers of services Manufacturer
  • 30. Slide: 30 Slide 30More free downloads and templates at: 1stOutsource Research Source: © Goodyear Dunlop Tyres Europe B.V. http://eu.goodyear.com Derived Demand Goodyear’s RunOnFlat Tyres are featured on BMWs, Ferraris, Corvettes, Maseratis, and Mercedes
  • 31. Slide: 31 Slide 31More free downloads and templates at: 1stOutsource Research Joint Demand Demand for Samsung’s Solid State Disk (SSD) is tightly coupled with the demand for computers and other devices with memory chips
  • 32. Slide: 32 Slide 32More free downloads and templates at: 1stOutsource Research Buyer Decider (Decision Maker) Gatekeeper D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Users actually use the product. They may be the one who initiates the purchase process and may develop the product specification. Influencers supply information and advice. Outsiders such as consultants sometimes perform the role. Gatekeepers control the flow of information to the buying centre. Purchasing department Staff frequently fill the role but it could be any member of the organisation. Buyers choose suppliers and negotiate purchase terms often reducing the actual purchase to a clerical task. Deciders (Decision Makers) have the authority to approve the purchase. Deciders (Decision Makers) have the authority to approve the purchase. The Buying Centre – DMU’s
  • 33. Slide: 33 Slide 33More free downloads and templates at: 1stOutsource Research Roles in the Buying Process  Purchasing - handle relationships with suppliers  Production/operations - meeting targets for the end product in both quantity and quality terms  Engineering - the specification and design  Research and Development (R&D) – look for new solutions to problems  Finance - devolve budgets to appropriate managers  Marketing - outputs of the production process
  • 34. Slide: 34 Slide 34More free downloads and templates at: 1stOutsource Research Government/Institutional market Schools, hospitals, prisons etc. Tensions include Cost vs. quality Low Budget Complex Buy Processes Captive Clientele Continual Change and public scrutiny
  • 35. Slide: 35 Slide 35More free downloads and templates at: 1stOutsource Research 6D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Recognition of a problem (need) Determination of specification and quantity of needed item Search for and qualification of potential sources Acquisition and analysis of proposals Evaluation of proposals and selection of supplier(s) Selection of an order routine Performance feedback and evaluation Buy phases: the organizational decision-making process
  • 36. Slide: 36 Slide 36More free downloads and templates at: 1stOutsource Research Major influences on buying behaviour Environmental: Demand Economic outlook Interest rates Rate of Tech change Political Competitive Developments Social Responsibility Organizational: Objectives Policies Procedures Structures Systems Politics Interpersonal: Interests Authority Status Empathy Persuasiveness Nationality Individual: Age Income Education Position Personality Risk attitudes Plus Types of Purchasing process – routine, strategic etc. Note similarities here to consumer behaviour
  • 37. Slide: 37 Slide 37More free downloads and templates at: 1stOutsource Research Management styles in the European Community, US and Japan 6D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill Group Individual Leadership Organic Systematic Organisation Source: Mole, J. (1990) Mind Your Manners Italy Portugal Greece Netherlands Spain France Germany USA Ireland Belgium Luxembourg DenmarkUK
  • 38. Slide: 38 Slide 38More free downloads and templates at: 1stOutsource Research Building Organizational Relationships Customer Services: Technical, expertise, resource, etc. Past, Present, Future - Expectation Management Competitive Awareness: Setting requirements Planning and Strategic moves Account Management: Understanding and developing DMU Consider also stages of relationships
  • 39. Slide: 39 Slide 39More free downloads and templates at: 1stOutsource Research Psychology of Organizational Relationships Individual personality, role set, motivation, cognition, learning, decision making Emotions Group: Contagion, Conformity, Polarization Conflict Inter-personal: interactions, tactics, Exchange/equity, influence processes Trust Societal: Culture, norms, Stereotyping, Prejudice… Discourses Stories
  • 40. Slide: 40 Slide 40More free downloads and templates at: 1stOutsource Research Ethical considerations may overlap both types – consumer and industrial  Issues with targeting vulnerable groups  Manipulation  Intrusive selling or direct marketing  Deception by salespeople or Account Managers  Hard selling  Bribery  Confidentiality
  • 41. Slide: 41 Slide 41More free downloads and templates at: 1stOutsource Research Evaluating usefulness of theories (must do in essay to gain good marks)  Applicability will vary by product/service type.  Should be aware of weaknesses of each form of categorisation and main theories.  Often descriptive or prescriptive, always consider variety in cases/processes.  Often based on small samples and limited timescales.  However – most are useful tools to help you think through the customer experience and requirements, and design your marketing mix in the most appropriate manner.
  • 42. Slide: 42 Slide 42More free downloads and templates at: 1stOutsource Research Aims and Objectives Achieved? Aims:  Outline theory and methods used in understanding consumer and organizational buyer behaviour  Provide an understanding of links between decision making and buying decisions Objectives  Assess the usefulness of theory and methods in understanding purchasing behaviour  Outline characteristics and dimensions of organizational purchasing processes  Identify some choice criteria and personal/social influences on buyer behaviour

Editor's Notes

  1. Introduce me as final year PhD on organizational attachment in IT outsourcing. Explain background in IT and managing people remotely. Masters and doctoral research at Birkbeck revealing interesting issues about intranets and e-mail usage. (Possibly explain a little about organizational focus as I see all other talks are to do with shopping type stuff). Could get attention by asking how many of them class themselves as remote workers or work from home sometimes? Aim of the talk today is to highlight the problems (still) faced by managers and staff in these days of increased reliance on electronic communication, and suggest that information overload is not just a ‘stress/overwork’ issue but can lead to increased isolation for remote workers.