International Business Marketing MARKEC04

International Business Marketing MARKEC04

• This course's topic is Understanding Consumer and Business Markets
• The lecture is part of a 1st year, 1st semester class
• The lecture was given on 6th of 2024-2025

Consumer Decision-Making

• Consumer behavior is a process of selecting, purchasing, using, and disposing of products/services/ideas/experiences to satisfy needs and desires.
• Consumer decisions are influenced by internal, situational, and social factors.

Internal Influences on Consumer Decisions

• Perception: The process of selecting, organizing, and interpreting information from the outside world. Three components(i) exposure- extent to which sensory receptors are registering a stimulus.(ii) attention- extent to which a person devotes mental processing to a stimulus. (iii) interpretation- process of assigning meaning to a stimulus based on prior associations and assumptions.
• Motivation: An internal state that drives us to satisfy needs by activating goal-oriented behavior. Consumers buy products for functional and emotional reasons.
• Learning: A relatively permanent change in behavior caused by information or experience.
• Attitudes: Lasting evaluations of a person, object, or issue. Key components of attitude are: affect(feeling), cognition(knowing), and behavior(doing).
• Personality: The set of unique psychological characteristics that influence the way a person responds to situations in their environment (self-concept and self-esteem).
• Age and Family Life Cycle: Reflects a pattern of living. Psychographics group people according to psychological and behavioral similarities (often based on activities, interests, and opinions- AIOs).

External Influences on Consumer Decisions

• Situational Influences:
  • Physical environment
  • Time;
• Social Influences:
  • Culture
  • Subculture
  • Social class
  • Group memberships
  • Opinion leaders
  • Gender roles

Not All Consumer Decisions are the Same

• Amount of effort in a decision varies based on: level of involvement and perceived risk.
• Consumer approaches decision making differently based on effort. (habitual, extensive, or limited)

Steps in the Consumer Decision-Making Process

• Problem recognition
• Information search
• Evaluation of alternatives
• Product choice
• Postpurchase evaluation

Steps in the Business Buying Decision Process

• Recognize a problem
• Search for Information
• Evaluate alternatives
• Select product and supplier
• Evaluate post purchase

Business-to-Business Markets

• Business-to-business markets involve buying and selling between organizations or institutions.
• Include manufacturers, resellers (retailers, wholesalers), and government/not-for-profit institutions.
• Key Differences in Business vs Consumer Markets: -Size of purchases: Purchases are typically large scale
  • Number of customers: Fewer customers, concentrated geographically
  • Buying process: More complex processes, typically involve more parties involved (buying center).
• Derived Demand: Demand for one product is derived from the demand for another.
• Inelastic demand: Demand that is not considerably affected by price changes.
• Fluctuating Demand: Small changes in customer demand can create large changes in business demand.
• Joint Demand: Two or more goods needed to create a product.
• Buyclass Framework: Straight rebuy, Modified rebuy, and New task buy. This framework is used to classify business buying situations.
• Buying Center: Cross-functional group within an organization working together to make a business buying decision.
  • Roles of individuals within a buying center: Initiator, User, Gatekeeper, Influencer, Decider, Buyer.