UNIT 2: Understanding The Marketplace. Buyer Behaviour PDF

UNIT 2: UNDERSTANDING THE MARKETPLACE. BUYER BEHAVIOUR 1. Explaining consumer behaviour Consumer buyer behaviour refers to final consumers that buy goods and services for their personal consumption. Consumer markets are all the individuals and households that buy goods and services for pers...

UNIT 2: UNDERSTANDING THE MARKETPLACE. BUYER BEHAVIOUR 1. Explaining consumer behaviour Consumer buyer behaviour refers to final consumers that buy goods and services for their personal consumption. Consumer markets are all the individuals and households that buy goods and services for personal consumption. ¿Where does the data come from? - Online interactions: browsing, purchases, social media… - digital trace. - Mobile devices: Location data, app use, biometric data, call records… - E-commerce: purchase history, preferences, payment information… - IoT Devices: generate data about user habits and preferences. - Surveys and feedback: customer satisfaction, opinions and preferences. - Physical stores: loyalty programs, cameras and sensors, point-of-sale-systems… - Cookies and tracking: websites track online behaviour (time spend, pages, items added…). - Third-party sources: demographics, income levels, psychographic data… Data is collected, stored, processed, analysed, visualized and taken to action. CRM platforms integrate, analyse and apply data to gain a 360-degree view. Marketing Analytics is applied to generate meaningful patterns and gain insights. Ethical considerations: 1. Privacy 2. Data security 3. Data protection 4. Misuse of data Culture is a set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions. Subculture: A group of people with shared value systems based on common life experiences and situations. Reference group: Serves as a point of comparison or reference in shaping a person´s behaviour. Opinion leader: A person who, because of special skills, knowledge, personality or other characteristics, can socially influence others. Word-of mouth influence: Personal recommendations of trusted friends. Family or other consumers on buying behaviour.  Influencer marketing: Established influencers that spread (positive) information about a brand. Roles and status: A person´s position in a group can be defined by role and status. A role consists of activities people are “expected” to perform and each role carries a status. Occupation affects the goods and services bought by consumers. Age and Life Stage affect tastes in food, clothes, furniture… Economic situations include trends in spending, personal income, savings, interest rates… Lifestyle is a person´s pattern of living as expressed in his or her psychographics. Personality refers to the unique psychological characteristic that distinguish a person or group. Sincerity (honest, healthy and cheerful) Emotion (daring, energetic, imaginative and “up to date”) Competence (reliable, intelligent and successful) Sophistication (glamorous, high class and charming) Strength (tough and outgoing) - Motivation: a need that is sufficiently pressing to direct the person to seek satisfaction of the need. - Perception: is the process by which people select, organize and interpret information to form a meaningful picture of the world. - Learning: is changes in an individual´s behaviour arising from experience. - Beliefs and attitudes: are difficult to change. Selective Attention is the tendency for consumer to screen out most of the information they are exposed to. Selective Distortion is the tendency of people to interpret information in a way that will support what they already believe or what they want to believe. Selective Retention: Consumers will usually forget much of the stimuli they have been exposed to, so selective retention allows them to “remember” the good points they favour and to “forget” the negative points that have been made about brands that they don´t like. 2. Types of buying decision behaviour Buyer decision process: 01) NEED RECOGNITION Buyer recognizes a difference between the actual and desired state. o Internal stimulus: needs that are important enough to make a person act. o External stimulus: an image, a store, a smell… 02) INFORMATION SEARCH The buyer is motivated enough to gather information. o Personal sources: family, friends, neighbours… o Commercial sources: ads, sellers, retailers, packaging… o Public sources: mass media, social media… o Own experience: examining and using the product. Relative importance depends on the product and the person. 03) EVALUATION OF ALTERNATIVES There is no single, simple evaluation process used by all consumers or even by a single consumer in all purchasing decisions. The consumer sees each product as a set of attributes with different capabilities to offer the desired benefits and satisfy their needs. The marketer must measure the levels of importance that consumer attribute to the different attributes they consider when purchasing a product and the consumer´s brand beliefs, this is how the consumer values each of the brands in relation to each attribute. 04) PURCHASE DECISION The consumer forms preferences between brands. Buy the preferred brand. Between intention and decision: 1. Attitudes of others 2. Unforeseen Purchase decisions: o Product decision o Brand decision o Establishment decision o Decision at time of purchase o Purchase quantity decision 05) POST PURCHASE BEHAVIOUR The adoption process: Mental process that an individual goes through from when he first hears about and innovation until he finally adopts it. Relative advantage: degree to which the new product is better than the existing ones. Compatibility: degree to which the innovation fits the values of potential customers. Complexity: degree of difficulty in understanding or using the innovation. Divisibility: degree to which the innovation can be tested in a limited way. Communication capacity: degree to which the results of using the innovation can be observed. Business buyer behaviour refers to the buying behaviour of the organizations that buy goods and services for use in the production of other products and services that are sold, rented or supplied to others. The business buying process is the process where business buyers determine which products and services are needed to purchase, and then find, evaluate and choose among alternative brands. Business buyers usually face more complex buying decisions than do consumer buyers. Compared with consumer purchases, a business purchase usually involves: o More decision participants o More professional purchasing effort o More buyer and seller interaction  Straight rebuy is a buying situation in which the buyer routinely reorders something without any modifications. Modified rebuy is a buying situation in which the buyer wants to modify product specifications, prices, terms or suppliers. New task is a buying situation in which the buyer purchases a product or service for the first time. Systems selling is buying a complete solution to a problem from a single seller. Users are those that will use the product or service. Influencers help define specifications and provide information for evaluating alternatives. Buyers have formal authority to select the supplier and arrange terms of purchase. Deciders have formal or informal power to select and approve final suppliers. Gatekeepers control the flow of information. - Problem recognition occurs when someone in the company recognizes a problem or need. o Internal stimuli: Need for new product ow production equipment. o 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 determine if they can be redesign, standardize or made with less costly methods of production. - Supplier search involves compiling a list of qualified suppliers to find the best vendors. - Proposal solicitation is the process of requiring proposals from qualifies suppliers. - Supplier selection is when the buying centre creates a list of desired supplier attributes and negotiates with preferred suppliers for favourable terms and conditions. - Order-routine specifications include 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 order-routine specifications. Institutional markets consist of school, hospitals, nursing homes and prisons that provide goods and services to people in their care. Characteristics → Low budgets and captive patrons