Unit 4 Buyer Behavior

5th Semester

Meaning
The buyer behavior relates to the purchase behavior of individuals, groups and organizations who buy products to meet their needs and solve problems.
Philip Kotler-
Buying behavior is the decision processes and acts of customers involved in buying and using products.
Buyer behavior is the study of how individuals and groups make their decisions to use their resources in terms of time, money and effort.
It includes the study of various aspects of buying, using and disposing products and services.
Importance of buyer behavior
Customer Need Satisfaction
Market Mix Development
New Market Opportunities
Target Market Selection
Product Positioning
Efficient Resource Use
Consumer behavior
Consumer behavior is the buying behavior of ultimate consumers who buy products and services for personal and family use.
It involves the buying decision process and major influences in a consumer’s buying decision.
Consumer behavior is the study of he decision making units and processes involved in acquiring, consuming and disposing of goods, services, experiences and ideas.
Consumer buying process
Low Involvement Purchase
Routine purchase decision.
Familiar with the product.
Many brands.
Low risk.
Small amount of money.
Short purchase time.
Less effort.
Passive interest in product information.
Positive attitude towards the product.
Short term product benefits.
Limited interest in the product characteristics.
Low social importance.
High Involvement Purchase
Extensive decision making.
Buyer behavior is complex.
Consumers are unfamiliar with the product.
Few brands.
High risk.
Large amount of money.
Long purchase time.
Active interest in product information.
Uncertain attitude toward the product.
Long term product benefits.
High interest in the product characteristics.
High social importance.
Stages of consumer buying process
Need or Problem Recognition
Internal: Hunger, thirsts, sleep, shelter etc.
External: Advertisement, window display etc.
Information Search
Collection of information about products, brands,stores, prices,
quality, features, advantages and other attributes and benefits
from internal and external sources.
Evaluation of Alternatives
Product class attributes: Features, name, price, quality, services,
warranty etc.
Purchase Decision
Brand belief: Use past experience, opinions of other people.
Utility function attributes: Expected total satisfaction form various
attributes of the different brands of a product.
Post Purchase Behavior
Consumption and usage, satisfaction and dissatisfaction,
consumer complaints, disposal.
FACTOR DETERMINING CONSUMER BUYING DECISIONS
Consumer’s Income
Saving & Liquid Assets
Availability of Credit
Market Sentiments
Business cycle, inflation, money supply, interest rates,
economic development etc.
Attitude towards spending
Consumer’s Income
Saving & Liquid Assets
Availability of Credit
Market Sentiments
Attitude Towards Spending
Age
• Young is fashion conscious and middle-aged person is status
conscious.
• Young consumers are more likely to to visit departmental stores
and middle-aged consumer prefer discount stores.
• Young consumers show more risk taking behavior in buying new
products that older consumers.
• Young consumers like to experiment new products where as older
consumers prefer brand loyalty.
Family size and the family life cycle
Gender
Life style
It is defined as the patterns in which people live and spend time and m
Occupation
Age
Family size and the family life cycle
Gender
Lifestyle
Occupation
Motivation
A motivation is an energizing force that directs an
individual towards doing something in some manner.
Perception
Perception refers to the process of receiving and
interpreting stimuli by the individual and translating
into response.
Learning
Learning refers to a more or less permanent change
in behavior which occurs as a result of practice or
experience.
Attitudes
Attitude is person’s judgement toward some object,
people or event. It reflect likes and dislikes of consumers
Belief
A belief is a descriptive thought that a consumer holds
about something.
Personality
Personality is the sum total of ways in which an individual
reacts and interacts with others. It is an individual’s
psychological traits that lead to enduring behavioral
responses.
Family
Reference groups
Social class
Status
Culture
Rules/norms of a society
ORGANIZATIONAL BUYER
Organizational buying process refers to the buying behavior of organizations that buy
products for business use, resell or to make other products.
All formal organizations-manufactures, business firms, intermediaries, government,
educational institutions and social institutions purchase products, services and ideas for
conducting their operations.
Eg. Recharge cards by NTC/NCELL/DISH HOME, paper cups by McDonald’s, computer
chips by Toshiba, oil by NOC, accountancy services by other companies etc.
Webster and Wind-
“Organizational buying is the decision making process by which formal organizations
establish the need for purchased products and services and identify, evaluate and choose
among alternative brands and suppliers.”
ORGANIZATIONAL MARKET
Organizational markets are those that buy goods for production purposes or for reselling
purposes.
ORGANIZATIONAL BUYING PROCESS
Need or Problem Recognition
Starts from diminishing inventory levels of raw materials, parts, spares
and supplies or breakdown in current operations from new product
developments, expansion of organizational operations and other reasons.
Preparing Product Specifications
Detail specifications of the product or service requirements by technical
committee.
Supplier Search
Internal search and external search.
Proposal Evaluation
Evaluation in terms of product, price, capability, service, delivery and
other terms and conditions of supply.
Purchase Behavior
Buying of goods and services.
Post Purchase Behavior
Consumption and usage, satisfaction and dissatisfaction, consumer
complaints, disposal.
CONSUMER BUYING PRACTICES IN NEPAL
Consumer buying practices have not been properly taken into account while creating and offering
market mixes.
Nepalese marketers lack knowledge of consumer buying practices.
Marketers know very little about the consumer behavior at every stage of the consumer buying
process.
Post purchase stage is hardly considered to build life long customers.
The disposal aspect is neglected which has created serious environmental problems.
Marketers have not given proper attention to the psychological and social factors that influence
consumer buying practices.
Economic, demographic and cultural factors have been dominant in the design of the marketing mixes
and market positioning.
The marketing resources have not been efficiently utilized.
GLOBAL CONSUMER MOVEMENT AND CONSUMER PROTECTION
http://kulprasadpandey.com.np/consumer-protection-in-Nepal/
BUYING SITUATIONS
Routinized Response Behavior
• Customer is aware of his or her choices.
• Knows what he/she is looking for.
• Decisions is based on personal experience of either self or others.
• Customers spends little or no time choosing an alternative.
• Brand loyalty is relatively higher.
• Customer perceives a low risk in buying the products.
• E.g. Typical shopping behavior of a housewife.
Limited Problem Solving or Modified Re Buy
• The buying situation with a difference.
• Introduction of a new brand or product often requiring a change in the customer’s decision criteria.
Extended Problem Solving (EPS)
• High degree if complexity.
• Often occurs with expensive items or can be fueled by doubts and fears.
• All consumer decision making stages are often used.
• Dissatisfaction often leads to negative word of mouth.
• A longer time is taken to decide.