Consumer And Business Markets PDF

Module 4 Subtopic 2: Consumer and Business Markets Principles of Marketing  Subtopic 2: Consumer and Business Markets Business Organizations Business organizations are profit-seeking economic institution that serves...

Module 4 Subtopic 2: Consumer and Business Markets Principles of Marketing  Subtopic 2: Consumer and Business Markets Business Organizations Business organizations are profit-seeking economic institution that serves as a link between scarce resources and consumer satisfactions Consumer Buying Behavior it refers to the actions taken (both on and offline) by consumers before buying a product or service. This process may include consulting search engines, engaging with social media posts, or a variety of other actions.). The major factors that influence Consumer Buyer Behavior? 1.Cultural Factors - Culture is not always defined by a person's nationality. It can also be defined by their associations, their religious beliefs or even their location.  The major factors that influence Consumer Buyer Behavior? CULTURE – Most basic cause of wants and behavior, largely learned – Cultural influences on buying behavior vary greatly (e.g. green caps in Taiwan) – Cultural shifts – e.g. shift to concern for health => new market opportunities  The major factors that influence Consumer Buyer Behavior? CULTURE Subculture –Groups of people with shared value systems based on common life experiences and situations –Nationalities, religions, racial groups, geographic location – Examples –Hispanic, African American, Asian American, the 50+ market  The major factors that influence Consumer Buyer Behavior? CULTURE Social class –Society's relative permanent and ordered divisions –Members share similar values, interests, and behavior –Class is defined by a combination of occupation, income, education, wealth, and other variable The major factors that influence Consumer Buyer Behavior? Social Factors - Elements in a person's environment that impact the way they see products. The major factors that influence Consumer Buyer Behavior? SOCIAL FACTORS Groups – Membership groups – Person belongs to, and has a direct influence on the person – Reference groups – Serve as points of comparison in forming attitudes or behavior – Does not require membership in the group – E.g. aspirational group – a group to which the person wants to belong  The major factors that influence Consumer Buyer Behavior? SOCIAL FACTORS – Opinion leaders – People in a reference group who because of some characteristics exert influence on others Family – Family = most important buying “organization” – Interactions of family ties – Women are getting jobs, men are making more buying decisions constantly  The major factors that influence Consumer Buyer Behavior? SOCIAL FACTORS Roles and status – Role = activities people are expected to perform according the persons around them – Status = reflects the general esteem given to role by society  The major factors that influence Consumer Buyer Behavior? PERSONAL FACTORS Personal Factors - These may include someone's age, marital status, budget, personal beliefs, values, and morals.  The major factors that influence Consumer Buyer Behavior? PERSONAL FACTORS Age and life-cycle stage – Tastes in food, clothes, furniture etc are age related – Family situation no longer directly age related Occupation – Blue collar => more rugged clothes, white collar => more business suits Economic situation – Buying behavior affected by e.g. income/wealth and business cycle  The major factors that influence Consumer Buyer Behavior? PERSONAL FACTORS Personality and self-concept – Personality = unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment – Self-concept = self-image = people's possessions contribute to and reflected their identities (“we are what we have”)  The major factors that influence Consumer Buyer Behavior? PSYCHOLOGICAL FACTORS Psychological Factors – A person's state of mind when they are approached with a product will often determine how they feel not only about the item itself but the brand as a whole (DJ Team 2020).  The major factors that influence Consumer Buyer Behavior? PSYCHOLOGICAL FACTORS Psychological Factors – A person's state of mind when they are approached with a product will often determine how they feel not only about the item itself but the brand as a whole (DJ Team 2020). Types of buying decision behavior The Four (4) Types of Buyers? 1. The Analytical Buyer - Motivated by logic and information, this buyer will look at all the data on competing brands and products before making an informed decision. The four (4) Types of Buyers? 2. The Amiable Buyer - Warm and friendly, this buyer just wants everyone to be happy. That is why they are often paralyzed by big decisions when there is the perception of a win/lose outcome. The four (4) Types of Buyers? 3. The Driver Buyer - Drivers are most concerned with how others view them and whether they follow. The trendsetters, Drivers are most concerned with their appearance rather than the relationships that are formed during a transaction. The four (4) Types of Buyers? 4. The Expressive Buyer - Relationships are key to the Expressive Buyer. They cannot stand feeling isolated or ignored during a transaction. Instead, they want to feel like your most important asset. Organizational Buyer Behavior  The behavior of an organization shown in buying goods or services is called organizational buying behavior.  The organizations buy goods or services for business use, resale, produce other goods or provide services.  Business and industrial organizations buy goods to use in business or produce other goods.  Resellers buy goods for reselling them at profitable price. Consumer Buying Behavior Vs. Business Buying Behavior Buying behavior varies greatly between consumers and businesses. That's because while consumers purchase goods and services for personal use, businesses buy these things either to manufacture other goods or to resell them to other businesses or consumers. The participants, characteristics, influences and the buying process are different for both groups. Consumer Buying Behavior Vs. Business Buying Behavior  The Number of Participants  Differing Behavioral Characteristics  Influencing Factors and Motivations  The Buying Process Business buying usually involves multiple participants, such as the  final users of the product,  influencers who establish the need for certain products,  gatekeepers who screen potential suppliers  purchasing managers and senior management who approve the funds for the purchases. Differing Behavioral Characteristics  The consumer market consists of thousands of customers located in different geographies and with different buying habits. However, their needs are usually the same for a particular product  for example, everybody uses washing machines in the same way. The business market usually consists of a few large buyers who are often concentrated in specific geographic markets. Differing Behavioral Characteristics  Businesses generally form close and long-term relationships with their suppliers. Different businesses might use the same product differently. For example, a retail business might install computers to track its inventory, while a technology company might use them for product research. Influencing Factors and Motivations  The influences on consumer buying behavior include basic needs, membership in groups, family requirements, occupation, age, economic situation and lifestyle choices.  The psychological influences include perception of certain products and brands, beliefs and attitudes.  Influences on business buying behavior include environmental and organizational factors. Influencing Factors and Motivations  The influences on consumer buying behavior include basic needs, membership in groups, family requirements, occupation, age, economic situation and lifestyle choices.  The psychological influences include perception of certain products and brands, beliefs and attitudes.  Influences on business buying behavior include environmental and organizational factors.  Competitive pressures, technological evolution and changing macroeconomic conditions are some of the environmental influences, while corporate objectives, policies and procedures are some of the organizational factors.  The Buying Process  The buyer decision process examines how consumers make buying decisions. Need Recognition is the first stage of the buyer decision process in which the consumer recognizes a problem or need.  a. The need can be triggered by internal stimuli when one of the person’s normal needs rises to a level high enough to become a drive.  b. A need can also be triggered by external stimuli  c. At this stage, the marketer needs to determine the factors and situations that usually trigger consumer-need recognition. Information research is the stage of buyers decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search.  Personal sources such as family and friends  Commercial sources such as advertising and salespeople  Public sources such as the mass media and consumer-rating organizations  Experiential sources such as handling, examining, or using the product Information research Alternative Evaluation is the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands choices.  The consumer arrives at attitudes toward different brands through some evaluation procedure.  In some cases, consumers use careful calculation and logical thinking. Alternative Evaluation  In other instances, consumers buy on impulse and rely on intuition.  Sometimes consumers make buying decision on their own. At other times, they ask friends, buying or consumer guides, or salespeople for advice.  Marketers should study buyers to find out how they actually evaluate brand alternatives Purchase decision is the stage of the buyer-decision process in which the consumer actually buys the product. a. Other people’s attitude – how much another person’s attitudes will affect individual choices depends both on the strength of the other person’s attitude toward the buying decision and the individual’s motivation to comply with that person’s wishes. b. Unexpected situational factors – if unexpected situational factors arise as the consumer is about to act, the purchase intention may be affected. Post purchase behavior is the stage of the buyer-decision process in which consumers take further action after purchase based on their satisfaction or dissatisfaction. Determinates are: a. The relationship between the consumer’s expectations and the product’s perceived performance. The larger the gap between expectations and performance, the greater the consumer’s dissatisfaction. b. Some sellers might even understate performance levels to boost consumer satisfaction with the product Cognitive dissonance is buyer discomfort caused by post-purchase conflict and it Is very common It is very important to satisfy customers because a company’s sales come from two basic groups: new customers and retained customers  Since it is more costly to attract new customers than to retain current one’s, it is important to keep current customers happy.  A satisfied customer also tells other about their experience References : AB Ilano; (2016). Principles of Marketing: Rex Book Store,; 856 Nicanor Reyes, Sr. St. Zarate, C; ( 2017). Principles of Marketing: C & E Bookstore; Quezon City Online site: DJ Team (2020). What Is Consumer Buying Behavior? Retrieved from: https://www.demandjump.com/blog/what-is-consumer-buying- behavior https://www.investopedia.com/terms/o/organizational- behavior.aspu