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Question1 Consumer Buyer Behavior

Consumer buyer behavior refers to the buying behavior of final consumers

individuals and households who buy goods and services for personal consumption

Five stages in the buyer decision process

The Buyer Decision Process

1. Need recognition

2. Information search

3. Evaluation of alternatives

4. Purchase decision5. Post-purchase behavior

Need Recognition

Need recognition occurs when the buyer recognizes a problem or need triggered by:• Internal stimuli

• External stimuli

Information Search

Information search is the amount of information needed in the buying process anddepends on the strength of the drive, the amount of information you start with, the ease of

obtaining the information, the value placed on the additional information, and the

satisfaction from searching

Sources of information:

Personal sources family and friendsCommercial sources advertising, Internet

Public sources mass media, consumer organizations

Experiential sources handling, examining, using the product

Evaluation of Alternatives

Evaluation of alternatives is how the consumer processes information to arrive at brand

choices

Purchase Decision

The purchase decision is the act by the consumer to buy the most preferred brandThe purchase decision can be affected by:

• Attitudes of others

• Unexpected situational factors

Post-Purchase Decision

The post-purchase decision is the satisfaction or dissatisfaction the consumer feelsabout the purchase

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Relationship between:

• Consumer’s expectations

• Product’s perceived performance

Post-Purchase Decision

The larger the gap between expectation and performance, the greater the consumer’sdissatisfaction

Question. Business buying process

Business buying process is the process where business buyers determine which products

and services are needed to purchase and then find, evaluate, and choose amongalternative brands

Business buyer behavior refers to the buying behavior of the organizations that buy

goods and services for use in production of other products and services that are sold,rented, or supplied to others. Also included are retailing and wholesaling firms that

acquire goods to resell or rent to others for profit.

The Buying Process

1. Problem recognition

2. General need description

3. Product specification4. Value analysis

5. Supplier search

6. Proposal solicitation7. Supplier selection

8. Order-routine specifications

9. Performance reviewProblem recognition occurs when someone in the company recognizes a problem or

need

• Internal stimuli

• Need for new product or production equipment

• External stimuli

• Idea from a trade show or advertising

General need description describes the characteristics and quantity of the needed item

Product specification describes the technical criteria

Value analysis is an approach to cost reduction where components are studied to

determined if they can be redesigned, standardized, or made with less costly methods of

productionSupplier search involves compiling a list of qualified suppliers

Proposal solicitation is the process of requesting proposals from qualified suppliers

Supplier selection is the process when the buying center creates a list of desired supplier

attributes and negotiates with preferred suppliers for favorable terms and conditions

Order-routine specifications is the final order with the chosen supplier and lists all of

the specifications and terms of the purchase

Performance review involves a critique of supplier performance to the purchase terms

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Product Life Cycle

Product life cycle (PLC) is the course that a product’s sales and profits take over its

lifetime•

Product development• Introduction

• Growth

• Maturity

• Decline

Introduction stage is when the new product is first launched• Takes time

• Slow sales growth

• Little or no profit

• High distribution and promotion expense

Growth stage is when the new product satisfies the market• Sales increase

• New competitors enter the market

• Price stability or decline to increase volume

• Consumer education

• Profits increase

• Promotion and manufacturing costs gain economies of scale

• Product quality increases

• New features

• New market segments and distribution channels are entered

Maturity stage is a long-lasting stage of a product that has gained consumer acceptance

• Slowdown in sales

• Many suppliers

• Substitute products

• Overcapacity leads to competition

• Increased promotion and R&D to support sales and profits

Market modifying strategy is when a company tries to increase consumption of the

current product• New users

• Increase usage of existing users

• New market segments

Marketing mix modifying strategy is when a company changes one or more of themarketing mix elements

• Price

• Promotion

• Distribution channels

Decline stage is when sales decline or level off for an extended time, creating a weak product

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• Maintain the product

• Harvest the product

• Drop the product

Product Decisions and Social Responsibility

Public policy and regulations regarding developing and dropping products, patents,quality, and safety

Marketing Mix ( 4P vs 4C )

Marketing mix is the set of controllable tactical marketing toolsproduct, price,

place, and promotionthat the firm blends to produce the response it wants in the target

market

The four Ps

Product is the goods and services in combination that the company offers to the targetmarket

Price is the amount of money customers have to pay to obtain the product

Place is the company activities that make the product available to target customers

Promotion is the activities that communicate the merits of the product and persuade

target customers to buy itThe 4 Ps versus The 4 Cs

Product Customer solutionPrice Customer cost

Place Convenience

Promotion Communication

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