Consumer and Business Buyer Behavior
Previewing the Concepts—Chapter Objectives
1. Understand the consumer market and the major factors that influence buyer behavior.
2. Identify and discuss the stages in the buyer decision process.
3. Describe the adoption and diffusion process for new products.
4. Define the business market and identify the major factors that influence business buyer behavior.
5. List and define the steps in the business buying decision process.
Just the Basics
Buying behavior is at the core of marketing: The knowledge and understanding of why we buy and how we buy should be the bedrock of every marketing program. This chapter covers both consumer and business buying behavior.
Consumer behavior incorporates concepts from both sociology and psychology. To understand consumers and their buying processes, therefore, is to understand the myriad influences encountered day in and day out. Cultural, social, personal, and psychological factors affecting buying behavior are explained. These factors clarify the why of buying.
The chapter also details the how of buying, by covering the consumer buying process. This process includes the stages of need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. The chapter also details the buyer decision process for new products as well as providing information on consumer behavior internationally.
Business markets are also defined and analyzed. The differences between the consumer buying process and the business buying process are highlighted, as is the nature of the buying unit in business markets. Also discussed is business buying on the Internet.
a. Buyers of Harley-Davidson motorcycles are intensely loyal and devoted to the brand. Because of this, Harley-Davidson is at the top of the heavyweight motorcycle market.
b. Harley-Davidson’s marketing managers spend a lot of time studying their buyers—they want to know who their customers are, what they think, how they feel, and why they buy a Harley rather than another brand.
c. The research revealed seven core types: adventure-loving traditionalists, sensitive pragmatists, stylish status seekers, laid-back campers, classy capitalists, cool-headed loners, and cocky misfits. Yet all Harley owners appreciated their bikes for the same basic reasons—independence, freedom, and power.
d. The example of Harley-Davidson shows that there are many factors that affect consumer buying behavior.
2. Consumer Markets and Consumer Buying Behavior
a. Consumer buying behavior refers to the buying behavior of final consumers—individual and households who buy goods and services for their own consumption. All of these consumers make up the consumer market.
b. The American consumer market consists of more than 290 million people who consume trillions of dollars’ worth of goods and services each year. The global market consists of almost 6.3 billion people.
Use Key Terms Consumer Market, Consumer Buyer Behavior here.
Use Chapter Objectives 1 here.
Model of Consumer Behavior
c. Most large companies research consumer buying decisions in great detail to answer questions about what consumers buy, where they buy, how and how much they buy, as well as when and why they buy.
d. Learning what, where, when, and how and how much they buy is easy, but understanding the why of buying is very difficult, because those reasons are usually locked deep inside the consumer’s mind.
e. Understanding how consumers respond to varying marketing messages starts with the stimulus-response model of buyer behavior found in Figure 5-1.
Use Figure 5-1 here.
f. Marketing stimuli consist of the four Ps of product, place, price, and promotion.
g. Other stimuli include major forces and events in the buyer’s environment: economic, technological, political, and cultural.
h. All these inputs enter the consumer’s black box and are then turned into responses such as product choice, brand choice, dealer choice, purchase timing and purchase amount.
i. The buyer’s characteristics influence how he or she perceives and reacts to the stimuli, and the buyer’s decision process itself affects the buyer’s behavior.
Characteristics Affecting Consumer Behavior
j. Figure 5-2 shows the factors influencing consumer purchases. For the most part, marketers cannot control these factors, but they must always keep them in mind.
k. Cultural factors exert a broad and deep influence. Roles are played by the buyer’s culture, subculture, and social class.
1. Culture is the most basic cause of a person’s wants and behaviors. This behavior is largely learned from families and other important institutions.
Use Key Term Culture here.
Use Figure 5-2 here.
2. A child born in the United States generally learns the values of achievement and success; activity and involvement; efficiency and practicality; progress; material comfort; individualism; freedom; humanitarianism; youthfulness; and fitness and health.
3. Marketers try to spot cultural shifts so that they can discover new wants and desires, and then develop new products to meet the new wants and desires. An example is the shift toward health and fitness, which created a huge industry.
4. Subcultures are groups of people with shared value systems based on common life experiences and situations. They include nationalities, religions, racial groups, and geographic regions. Four important subculture groups in the United States include Hispanics, African Americans, Asians, and mature consumers.
Use Key Term Subculture here.
a. The U.S. Hispanic market, which includes Americans of Cuban, Mexican, Central American, South American, and Puerto Rican descent, numbers 35 million consumers who bought more than $425 billion worth of goods and services. This group is expected to double in size in the next 20 years. They tend to buy more branded, higher-quality products, and are extremely brand loyal.
b. African Americans number 35 million with a buying power of $646 billion. This population is growing in affluence and sophistication. They can be more price-conscious than other groups, but they are motivated by quality and selection. Black consumers are also the most fashion-conscious of the ethnic groups.
c. Asian Americans are the fastest growing and most affluent segment in the Untied States. They number 12 million and have a disposable income of $296 billion annually. The largest group consists of the Chinese Americans, followed by Filipinos, Japanese Americans, Asian Indians, and Korean Americans. Asian Americans are the most tech-savvy segment, and they shop frequently and are the most brand-conscious of all the ethnic groups. But they are also the least brand loyal.
d. Mature consumers number 75 million, and this group will more than double in size in the next 25 years. Mature consumers are better off financially than are the younger consumer groups.
5. Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. There are seven American social classes, and they are outlined in Figure 5-3.
Use Key Term Social Class here.
Use Figure 5-3 here.
Use Discussing the Issues 1 here.
6. Social class is not determined by a single factor; rather, it is measured by a combination of occupation, income, education, wealth, and other variables.
7. Marketers are interested in social class because people within a given class can exhibit similar buying behavior. Social classes have distinct product and brand preferences in areas such as clothing, home furnishings, leisure activity, and cars.
8. Social Factors
a. A consumer’s behavior is affected by social factors such as small groups, family, and social roles and status.
1. Behavior can be influenced by small groups. These groups include membership groups, to which a person belongs; reference groups, which are indirect points of comparison or reference; and aspirational groups, to which an individual would like to belong. These reference groups expose a person to new behaviors and lifestyles, influence the person’s attitudes and self-concept, and create pressures to conform that may affect a person’s product and brand choices.
Use Key Term Groups here.
Use Discussing the Issues 2 here.
2. Opinion leaders are those people within a reference group who exert influence on others. Buzz marketing is used by enlisting or even creating opinion leaders to spread the word about specific brands.
Use Key Term Opinion Leaders here.
3. Family members can influence buyer behavior. It is the most important consumer buying organization in society, and marketers study the roles of husbands, wives, and even children on the purchases of different products and services.
4. Women make almost 85% of all purchases, totaling $6 trillion each year. Children also can have strong influence on family buying decisions.
5. A person’s position in each group can be defined in terms of role and status. A role consists of the activities people are expected to perform according to the persons around them. Each role carries a status reflecting the general esteem given to it by society. People often choose products that show their status in society.
9. Personal Factors
a. Personal characteristics that affect what a consumer buys include age and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-concept.
1. People change the goods and services they buy over their lifetimes. The family life cycle consists of the stages through which families might pass as they mature over time. Traditional family life cycle stages include young singles and married couples with children. Other alternative stages include unmarried couples, singles marrying later in life, childless couples, same-sex couples, single parents, those recently divorced, and extended parents (those with young adult children returning home).
Use Marketing at Work 5-1 here.
2. A person’s occupation can also affect what he or she buys, as will his or her economic situation.
3. A person’s lifestyle is his or her pattern of living as expressed in his or her psychographics. It involves measuring consumers’ major AIO dimensions—activities, interests, and opinions. Lifestyle profiles a person’s whole pattern of acting and interacting with the world.
Use Key Term Lifestyle here.
4. There are lifestyle classifications, the most popular of which was developed by SRI Consulting. It is called the Values and Lifestyles (VALS) typology. It classifies people according to how they spend their time and their money. It divides people up into eight groups based on two major dimensions: primary motivation and resources. Primary moti-vations include ideals, achievement, and self-expression. Resources are classified as either high or low, and include income, education, health, self-confidence, energy, and other factors.
Use Application Questions 1 here.
5. Forrester research has also developed a “technographics” scheme, which segments con-sumers according to their motivation, desire, and ability to invest in technology.
6. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting response to one’s own environment. Personality generally covers such traits as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness. Personality influences buying behavior.
7. It is posited that brands also have personalities, and consumers will buy brands whose personality matches their own. A brand personality is the specific mix of human traits that may be attributed to a particular brand.
Use Key Term Personality here.
10. Psychological Factors
a. There are four psychological factors that could influence buyer behavior. They are motivation, perception, learning, and beliefs and attitudes.
1. A motive or drive is a need that is sufficiently pressing to direct the person to seek satisfaction. A person has many needs; some are biological, such as hunger and thirst; some are psychological, such as the need for recognition and esteem.
Use Key Term Motive (or Drive) here.
Use Marketing at Work 5-2 here.
2. There are several theories of human motivation, but two of the most popular were developed by Sigmund Freud and Abraham Maslow.
i. Freud assumed that people are unconscious about the real psychological forces shaping their behavior, and that a person does not really understand his or her motivation.
ii. Maslow believed that people are driven by particular needs at particular times, and that needs are arranged in a hierarchy (see Figure 5-4). These needs include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs. A person focuses on his or her most important needs, and as each level of needs ceases to be a motivator, he or she moves up the hierarchy.
Use Figure 5-4 here.
3. Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. How a person acts, or buys, is influenced by his or her perception of the situation. There are three perceptual processes through which people can form different perceptions of the same stimulus:
Use Key Term Perception here.
i. Selective attention is the tendency for people to screen out most of the information to which they are exposed.
ii. Selective distortion describes the tendency of people to interpret information in a way that will support what they already believe.
iii. Selective retention shows that people tend to retain only information that supports their attitudes and beliefs.
4. Learning describes changes in an individual’s behavior arising from experience. It occurs through the interplay of drives, stimuli, cues, responses, and reinforcement.
Use Key Term Learning here.
Use Discussing the Issues 3 here.
Applying the Concept
Video rentals generally include previews of movies that have not yet been released in theaters. How does this apply to the effect of the learning concept just reviewed on your own buyer decision process?
5. A belief is a descriptive thought that a person has about something. An attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or an idea. Attitudes put people into a frame of mind of liking or disliking things, and of moving toward or away from them. Attitudes are difficult to change.
Use Key Terms Belief, Attitude here.
The Buyer Decision Process
l. There are five stages in the buyer decision process (see Figure 5-5): need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. In more routine purchases, consumers can skip or even reverse some of these stages.
Use Chapter Objectives 2 here.
Use Figure 5-5 here.
1. Need recognition is the start of the decision process. The buyer recognizes that he or she has a problem or need.
a. The need can come from external stimuli, such as advertising, or internal stimuli, such as hunger or thirst.
2. Information search may or may not take place. If it does, consumers can get their information from many sources.
a. Personal sources include family, friends, neighbors, and so forth.
b. Commercial sources are advertising, salespeople, packaging, and so forth.
c. Public sources include the media and consumer-rating organizations.
d. Experiential sources include the consumer handling or examining the product itself.
e. The relative importance of each of these sources varies by consumer. The most effective sources tend to be personal; commercial sources tend to inform the consumer, but personal sources can legitimize the products.
Use Discussing the Issues 4 here.
3. Evaluation of alternatives depends on the individual consumer and the buying situation. In some case, consumers can evaluate product alternatives very carefully, using careful calculations and logical thinking. At other times, very little consideration of alternatives is done—impulse buying and relying on intuition rule.
4. The purchase decision entails forming the purchase intention. Typically, consumers will now buy what they have decided on. However, two factors can come between the purchase intention and purchase decision.
a. First, attitudes of others can intervene. If someone close to the consumer casts doubt on the decision made, the purchase might not take place.
b. Second, there could be unexpected situational factors. A consumer could see a drop in income, or a competitor could drop their prices.
5. Post-purchase behavior is also considered part of the buying process. The difference between the consumer’s expectations and the perceived performance of the good purchased determines how satisfied the consumer is. If the product falls short of expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if it exceeds expectations, the consumer is said to be delighted.
a. Cognitive dissonance generally results from every major purchase. This is the discomfort caused by post-purchase conflict. Every purchase involves compromise, through forgoing benefits of other products.
Use Key Term Cognitive Dissonance here.
m. It always costs more to gain new customers than to retain existing customers, and the best way to retain those you already have is to satisfy them. Bad word of mouth travels far more quickly than good.
Let’s Discuss This
Think of the last time you were unhappy with a purchase or with a company. How many people did you tell? Did you let the company know about it? Why or why not? Have you ever returned to that store or brand?
The Buyer Decision Process for New Products
n. A new product is a good, service, or idea that is perceived by some potential customers as new.
Use Key Term New Product here.
Use Chapter Objectives 3 here.
o. The adoption process is the mental process through which an individual passes from first learning about an innovation to final adoption, and adoption itself is defined as the decision by a consumer to become a regular user of the product.
Use Key Term Adoption Process here.
p. There are five stages in adopting a new product.
1. Awareness is when the consumer becomes aware of a new product, but still lacks information about it.
2. Interest occurs as the consumer seeks information.
3. Evaluation is the process through which the consumer considers whether trying the new product makes sense.
4. Trial of the new product on a small scale improves his or her estimate of its value.
5. Adoption occurs when the consumer decides to make full and regular use of the new product.
Use Figure 5-6 here.
Use Discussing the Issues 5 here.
q. There are adopter categories into which consumers fall. See Figure 5-6.
1. Innovators tend to be adventuresome. They will try new ideas at some risk.
2. Early adopters are typically guided by respect. They are opinion leaders and adopt new ideas carefully, although early.
3. The early majority are rarely leaders, but they do adopt new ideas before the average person.
4. The late majority are skeptical; they wait for a majority of people to adopt something new before they do.
5. Laggards are tradition-bound. They can be suspicious of changes and adopt “new” ideas only when they’ve become somewhat of a tradition themselves.
Use Application Questions 2 here.
r. The characteristics of a new product affect its rate of adoption. Five characteristics are especially important in an innovation’s rate of adoption.
1. Does it have a relative advantage over existing products?
2. Compatibility with the values and experiences of potential customers is important.
3. The degree of complexity is also considered. That is, how difficult is it to understand or use the product?
4. Divisibility speaks to how easily the innovation may be tried on a limited basis.
5. Communicability is the degree to which the results of using the innovation can be observed or described to others.
6. Other characteristics that influence adoption of new products are the initial and ongoing costs, the risk and uncertainty involved, and the level of social approval.
Consumer Behavior Across International Borders
s. Understanding the needs of consumers across borders is a daunting task. Consumers in other countries may have many of the same things, but their values, attitudes, and behaviors often vary greatly.
t. Marketers must decide the degree to which they will adapt their products and marketing programs to meet unique cultures and needs in various markets. Standardizing offerings simplifies operations and allows companies to take advantage of cost economies. But adapting marketing efforts within each country results in products and programs that better satisfy the needs of local consumers.
Use Speed Bump: Linking the Concepts here.
3. Business Markets and Business Buyer Behavior
a. Most large companies sell to other organizations. Even large consumer-products companies must first sell their products to other businesses before consumers can buy them.
b. Business buyer behavior refers to the buying behavior 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. It includes the behavior of retailing and wholesaling firms that acquire goods for the purpose of reselling or renting them to others at a profit.
Use Key Term Business Buyer Behavior here.
Use Chapter Objectives 4 here.
Use Figure 5-7 here.
Use Discussing the Issues 6 here.
c. In the business buying process, business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers and brands.
d. The business market is huge. Business markets involve more dollars and items than do consumer markets. There are many sets of business purchases for each set of consumer purchases.
e. Business markets differ in many ways from consumer markets. The main differences are in market structure and demand; the nature of the buying unit; and the types of decisions and the decision process involved.
1. Market structure and demand
a. The business marketer generally deals with far fewer but far larger buyers than the consumer marketer does. Even in large business markets, a few buyers often account for most of the purchasing.
b. Business markets are more geographically concentrated. Eight states account for more than half the nation’s business buyers: California, New York, Ohio, Illinois, Michigan, Texas, Pennsylvania, and New Jersey.
c. Business demand is derived demand—it ultimately derives from the demand for consumer goods. Because of this, business marketers may promote their products directly to final consumers to increase business demand.
Use Key Term Derived Demand here.
Use Focus on Ethics here.
2. Nature of the buying unit
a. A business purchase usually involves more decision participants and a more professional purchasing effort. Business buying is often done by professional purchasing agents.
b. The more complex the purchase, the more likely that several people will participate in the process. Buying committees made up of technical experts and top management are common in buying major goods.
3. Types of decisions and the decision process
a. Purchases often involve large sums of money, complex technical and economic considerations, and interactions among many people at many levels of the buyer’s organization. Because of the complexity, business buying decisions can take longer than consumer decisions.
b. The business buying process is generally more formalized than the consumer process. Detailed product specifications, written purchase orders, careful supplier searches, and formal approval are usually required.
c. In business buying situations, buyer and seller are often much more dependent on one another. They may work closely together, partnering to jointly create solutions to the customer’s problems.
Use Application Questions 3 here.
Business Buyer Behavior
f. The business buyer behavior model, shown in Figure 5-7, shows how marketing and other stimuli affect the buying organization and produce certain buyer responses. As in consumer buying, the marketing stimuli for business consists of the four Ps: product, price, place, and promotion. Other stimuli include environmental forces such as economic, technological, political, cultural, and competitive forces. The stimuli are turned into buyer responses, such as product or service choice, supplier choice, order quantities, and delivery, service, and payment terms.
g. There are three major types of buying situations.
1. In a straight rebuy, the buyer reorders something without any modifications. It is generally handled on a routine basis by the purchasing department.
2. In a modified rebuy, the buyer wants to modify product specifications, prices, terms, or suppliers. The modified rebuy usually involves more decision participants than does the straight rebuy.
3. A new task situation is encountered when a company is buying a product or service for the first time.
4. The buyer makes the fewest decisions in the straight rebuy and the most in the new task situation.
Use Key Terms Straight Rebuy, Modified Rebuy, New Task here.
h. Systems selling is often a key business marketing strategy because many business buyers prefer to buy a packaged solution to a problem from a single seller. In this situation, a buyer may ask sellers to supply the components and assemble the package or system.
Use Key Term Systems Selling here.
i. The decision-making unit of a buying organization is called the buying center. It is comprised of all the individuals and units that participate in the process. It is not a fixed and formally identified unit within the buying organization. Different people assume different roles for different purchases. For some purchases, only one person will participate; for more complex purchases, the buying center could include 20 or 30 people.
Use Key Term Buying Center here.
j. Business buyers are subject to many influences when they make their buying decisions. They respond to both economic and personal factors.
k. The various influences on buyers are shown in Figure 5-8. They include environmental, organizational, interpersonal, and individual influences.
Use Figure 5-8 here.
Use Marketing at Work 5-3 here.
1. Environmental factors can include the current and expected economic environment, as well as shortages of key materials. Technological, political, and competitive developments can also affect business buyers. Culture and customs can also influence buyer reactions to the marketer’s behavior and strategies.
2. Organizational factors are important because each buying organization has its own objectives, policies, procedures, structure, and systems.
3. Interpersonal factors also influence the business buying process. These can be very difficult to ascertain.
4. Individual factors are involved as well. Each participant in the business buying process brings in personal motives, perceptions, and preferences. These are, in turn, influenced by personal characteristics such as age, income, education, professional identification, personality, and attitudes toward risk.
Let’s Discuss This
Business people are supposed to make decisions on a rational basis, using the facts of the situation to make a final determination. That’s where environmental and organizational factors come into play. What about interpersonal and individual factors? Why are these important in a business buying process? How does a marketer take these factors into account when developing marketing messages for business audiences?
l. There are eight stages to the business buying process, which are shown in Figure 5-9. Buyers who are facing a new-task situation will usually go through all stages of the buying process. Those going through modified or straight rebuys may skip some of the stages.
Use Chapter Objectives 5 here.
Use Figure 5-9 here.
1. Problem recognition: The buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a specific product or service.
2. A general need description is generated to describe the characteristics and quantity needed of an item. For complex items, buyers may need to work with others, such as engineers, users, and consultants, to define the item.
3. The product specification includes the technical product specifications. Value analysis is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production.
Use Key Term Value Analysis here.
4. A supplier search is conducted to find the best vendors. The newer the buying task, and the more complex and costly the item, the greater the amount of time the buyer will spend searching for suppliers.
5. The proposal solicitation is the stage in which the buyer invites qualified suppliers to submit proposals. When the item is complex or expensive, the buyer will usually require detailed written proposals or formal presentations from each potential supplier.
6. Supplier selection occurs after the buying center reviews the proposals. During the selection process, the buying center may draw up a list of desired supplier attributes and their relative importance. Buyers may also attempt to negotiate with preferred suppliers for better prices and terms before making final selections.
7. An order-routine specification is now prepared that includes the final order with the chosen supplier or suppliers. It lists items such as technical specifications, quantity needed, expected time of delivery, return policies, and warranties. Buyers may use blanket contracts for routine items; this creates a long-term relationship in which the supplier promises to resupply the buyer as needed at agreed prices for a set period of time.
8. Finally, buyers conduct a performance review. In this stage, the buyer may contact users and ask them to rate their satisfaction. This review may lead the buyer to continue, modify, or drop the arrangement with the seller.
Use Under the Hood/Focus on Technology here.
Business Buying on the Internet
m. Online purchase, sometimes called e-procurement, is growing rapidly. In recent surveys, almost 75% of business buyers said they use the Internet to make at least some purchases, and e-procurement accounts for 14% of the average company’s spending.
Use Key Term e-Procurement here.
n. Most products bought online are MRO materials—maintenance, repair, and operating items. MRO materials account for up to 80% of all business orders, and the transaction costs for order processing are very high.
o. Online procurement in the business-to-business environment shaves transaction costs and results in more efficient purchasing for both buyers and suppliers. On average, companies can trim the costs of purchased goods alone by 15 to 20%.
p. There are some problems with e-procurement, however. For instance, it can erode decades-old customer-supplier relationships. There is also the potential for security disasters; the secure environment that businesses need to carry out confidential interactions is still lacking.
Discussing the Issues
1. Describe how the subculture individuals belong to and their social class can influence their choice of an automobile. Which of these two influences is likely to have the largest influence?
Subcultures, based on nationalities, religions, racial groups, and geographic regions, may have established norms for what constitutes an appropriate vehicle to own (and what is not appropriate). Also, to the degree that individuals wish to conform to a particular subculture, car purchases may reflect the types of autos typically owned by members of the subculture. Social class has implications for affordability (due to income) and for the required car attributes (due to occupation).
2. Reference groups that an individual desires to become associated with are called aspirational groups. What is one of your aspirational groups? What types of products could marketers effectively sell using the aspirational group you selected?
Student responses will vary to this question. Instructors may wish to have students think more deeply by discussing why a particular aspirational group consumes certain goods.
3. Learning is described as changes in an individual’s behavior arising from experience. In what ways do marketers attempt to get consumers to experience their products in order to influence their buying behavior?
Some examples would include test drives for automobiles, free samples in the mail, and the testing of fragrances at department store cosmetics counters. This question can be expanded by having students discuss how learning has impacted their own purchasing decisions.
4. Sometimes a consumer’s information searching is elaborate and other times very minimal. What factors might influence how much information searching a consumer does?
The amount of searching will depend on the strength of the drive to own, the amount of information started with, the ease of obtaining more information, the value placed on additional information, and the satisfaction derived from searching.
5. Think about a new type of product you have recently purchased. Discuss how you proceeded through the five stages of the product adoption process. Did you skip any stages? Were any of the stages in a different order from that presented in the text?
Student responses will vary depending upon the product purchased. Instructors may want to encourage students to think about why stages may have been skipped in the product adoption process. Product involvement level is often a factor in the steps experienced in the decision process.
6. Discuss how business buyer behavior is different from consumer buyer behavior. What does this mean for a company attempting to sell goods to other organizations?
The main differences between the two are in market structure and demand (with business markets having fewer but larger buyers that are geographically concentrated), the nature of the buying unit (with businesses involving more decision participants and a more professional purchasing effort), and the types of decisions and the decision process involved (with business market decisions being more complex, formal, and dependent).
1. Go to SRI Consulting’s website, (www.sric-bi.com/VALS/presurvey.shtml) and complete the VALS survey online. How accurately are you described by your primary and secondary VALS types? Do you think you will be in a different VALS category in 5 to 10 years? Discuss how Kraft food marketers might use this information to sell Velveeta cheese.
Instructors may desire to have students take the survey outside of clas,s and then in class group students together with similar VALS types. In these groups they can discuss the remaining questions. This assignment allows students to consider the nature of psychographic data and how it can be used to round out a company’s profile of their target market beyond just demographic information.
2. Examine the five adopter categories and how they differ from one another. Pick a recent technologically oriented product such as a PDA or DVD player and discuss how such a product should be positioned differently to appeal to each of the five adopter categories. Which group do you feel would be easiest to sell to? Which group might be the most profitable?
The product selected will guide the responses obtained to this question. The ease of selling to the different adopter categories is dependent upon when you assume the product is being sold (i.e., at product introduction versus later in the product life cycle). Students might be encouraged to consider multiple points in time in responding to the question. Profitability has to do with the size of the market, production costs, and the selling price. Have students consider each of these elements when considering which group will be most profitable to sell to.
3. Relationships between the seller and buyer are often mentioned as being more critical in business-to-business transactions than in business-to-consumer transactions. Do you agree or disagree with this? What type of activities might a firm use to develop closer relations with another organization?
Students should consider this statement in light of the growing trend in developing relationships in business-to-consumer transactions, which would suggest that relationships are important in both contexts. Organizations do not have relationships—people in the organizations do. This question can be expanded by having students consider what is important in keeping these organizational relationships strong.
Under the Hood / Focus on Technology
This chapter discusses how consumer and business markets differ from one another. How do you think the company website of a company selling directly to consumers will compare with one selling directly to other businesses? Visit and investigate the corporate websites for Dow Chemical (www.dow.com) and for Kellogg’s (www.kelloggs.com).
1. How are the websites different?
Both will contain similar types of information (e.g., product specifications, company information, contact information), but each will be geared toward their own constituencies.
2. Who is each website designed for?
Have students consider all of the different groups of people that might want to find information about the firms on the websites (e.g., consumers, business partners, students, shareholders, government regulators, competitors, etc.).
3. What types of information are present on both websites?
Information will include product specifications, company information, contact information, financial information, and press releases.
4. How well does each website communicate with its intended audience?
Responses to this question will vary by student. Encourage students to consider ways to improve communication on the website.
Focus on Ethics
As pointed out in the chapter, mature consumers are an attractive market due to their growing ranks, financial stability, and increasing free time. Health-related products are often pitched toward these markets in an effort to help them look as young as they feel and combat the effects of aging.
Traditionally, prescription drug advertising has been aimed directly at physicians. Recently, there has been a rise in prescription drug advertising aimed directly at the consumer, particularly the mature consumer. The goal is clear: If a patient is aware of new drugs that supposedly help combat aging, the patient will ask the physician to prescribe them. The expected result?—an increase in sales for the advertised drug.
Drug manufacturers have increased the amount of direct-to-consumer advertising, from $800 million in 1996 to $2.7 billion in 2001. While a better-educated consumer is a laudable goal, critics suggest that direct-to-consumer advertising partly fuels the escalating cost of prescription drugs, which are rising at an average of 17% per year. The advertising appears to be working. From 1990 to 2000, the volume prescribed of the 50 most advertised drugs increased by 24.6%, compared to only 4.3% for all other prescription drugs. Perhaps most disturbingly, a study in the Journal of Family Practice reported that 71% of family physicians felt direct-to-consumer advertising pressured them to prescribe medication they wouldn’t otherwise prescribe.
1. How do you feel about the rise in direct-to-consumer advertising for prescription drugs? What do you feel are some of the pros and cons of such advertising?
Responses will vary based on students’ attitudes toward this practice. Many students may discuss the advantages of a more-informed consumer versus the disadvantage of inappropriate prescriptions being issued.
2. What actions, if any, should drug manufacturers take to be socially responsible in the creation of consumer advertising?
Possible action would include adequate warnings regarding side effects and who the drug is appropriate for in the advertisements (beyond what is required by law). Instructors may wish to have students discuss the effectiveness of these warnings of side effects in their current form. In this case, it may be useful to show some of the direct-to-consumer advertisements in the class before discussion.
3. Does direct-to-consumer advertising in the drug industry have any negative consequences for pharmaceutical companies?
Potential negative consequences include unfavorable publicity from consumer advocate organizations, increased costs, and the potential for unfavorable governmental regulation on their advertising practices.
Barriers to Effective Learning
1. By and large, students have not been exposed to the consumer behavior concepts in this chapter before. If they have taken a sociology or human behavior course, chances are very high that the concepts were not presented in a way that allowed the students to understand them as they apply to business in general and marketing in particular. After presenting the concepts of consumer behavior, have the students discuss the concepts in terms of their own buying habits, their backgrounds, and how they differ from others in the class.
2. There is a lot of material in this chapter; although it hits only the high points of consumer behavior, the authors have done a good job of summarizing the constructs in a way that allows students to comprehend, albeit in a basic way, why these concepts are important to marketing managers. Explaining that consumer behavior is usually offered as a course unto itself can actually relieve some of their anxiety. Also helpful is continually reminding them of how they can apply this material to more fully appreciating their own motivations for their purchases. This can then lead them to understand how a marketer could approach understanding consumers’ motives in general.
3. Understanding business buyer behavior and the business buying process can be especially difficult for students. Very few have ever had any experience with business purchasing decisions. This requires thorough explanation; the strategic use of personal experience in this regard is particularly helpful. If the instructor has no personal experience in business buying situations, it could be very helpful to bring in a guest speaker for this topic.
4. Business buying centers can be a very nebulous topic for students, and most particularly, their dynamic nature. Business students typically learn about “the real world” in courses that present topics in a more-siloed nature than even the most functionally organized business are run. Discussing the importance and uses of inter-departmental teamwork in this section can be highly enlightening. This can then lead to a discussion of the different types of influencers, users, and so forth that could be found in a business buying center, and what their functions could be in the buying decision–making process.
5. Students may actually be surprised that business buying on the Internet is a separate topic in the text. Explaining the history and use (and expense) of EDI could be helpful, as well as the security concerns when posting critical technical specifications on the Internet. A discussion of the complex nature of many business purchases also helps students to understand why the majority of online business buying still centers around MRO items.
1. Pick five products of your choice and show how culture, subculture, social class, and lifestyle might alter the way that you should market the product. Be sure to detail which groups or specific segments you are discussing. Write up your findings, ideas, and differences.
2. Assume you need an airline ticket to go to Boston on the 18th of next month. Go to a travel website, such as www.orbitz.com, and specify your travel requirements, initiate the search for your options, and print out the search results. Use those results to list your criteria for your evaluation of alternatives. Then identify the option you would choose if you did, in fact, need this airline ticket. Finally, summarize how you felt about using an explicit purchase process for this exercise.
3. Investigate the qualifications needed to be a purchasing manager for your university. Discuss these qualifications in class. What general statements can you make?
Classroom Exercise/Homework Assignment
Mattel, Inc. is best known for its Barbie® dolls. Developed in the 1950s, Barbie has been extremely successful and extremely long-lived. She has evolved over the decades to reflect the changing American culture, yet she is still an icon of the dominant American culture, that of Caucasians. Mattel has not, however, forgotten that there are other cultures and subcultures in the United States. Go to the Mattel website, www.mattel.com, and browse through the site before answering the following questions:
1. How has Barbie evolved over the last five decades?
While the vast majority of Barbie dolls still reflect white culture, the dolls have evolved to show other cultures. In looking at the Barbie Collectibles pages, for example, you will immediately see an Asian Barbie, and you will see a section entitled “World Culture” that highlights Barbies from around the world.
Barbie has also evolved over the years to hold many occupations, reflecting the fact that American women now work in all fields, including those once considered “for men only.”
Barbie does, then, show that cultures, subcultures, and lifestyles do change over the years, and marketers are wise to follow those changes.
2. What has Mattel done to try to expand its marketing to subcultures that might not appreciate the value of Barbie?
Mattel has developed “Flavas,” a hip-hop-themed fashion-doll brand that “celebrates today’s teen culture through authentic style, attitude, and value.” First, by targeting teens, Mattel is marketing to an age group that in the past was not noted for wanting dolls. And by adding in a hip-hop flavor (or flava, in teen lexicon), they are reaching out for girls who might have felt disenfranchised by their previous offerings. In their marketing of the new line, they use terms such as attitude, fearless self-expression, personality, and mood. This is clearly aimed at reaching teen girls’ deepest motivations as reflected in their purchasing.
Mattel also lists their toys in the categories of “Infants and Preschool,” “Girls,” “Boys,” and “Grown-ups and Parents.” This listing can be seen as just a simplified tool for searching for your desired product, but it can also be seen as appealing to age and lifestyle differences.
Classroom Management Strategies
This chapter has a tremendous amount of material. The consumer buying behavior, in particular, presents an incredible amount of information. And all of this information is key to understanding marketing. As in Chapter 3, it is helpful to tie in both sociological and psychological principles in discussing this chapter.
1. More than half the class should be spent on Consumer Markets and Consumer Buyer Behavior. A thorough understanding of this section will make the business part of this chapter that much easier to comprehend. It is divided up into first the “why” of buying and second the “how” of buying. The former is guaranteed to never have crossed the students’ mind prior to this, so lots of examples will help drive home the importance of understanding why people buy what they do. Using their own buying history helps, particularly when really drilling down into why they really choose the school they are attending, the clothes they are wearing, etc. The actual buying process can be illustrated through examples of buying something very complex, such as a computer or a car, and then something very simple, such as salt. The new product buying decision process is also covered, and several minutes should be spent on this topic.
2. The remaining third or so of this class will then be spent on Business Markets and Business Buyer Behavior. Again, the section is divided into the “why” of buying, and then the “how”. There is also a discussion of the different market structure and demand characteristics of business markets. The terminology of the business buying is different, and you should be certain the students understand the differences between straight rebuy, modified rebuy and new tasks. Also, the buying process is more complex and more likely to be followed in practice, particularly for very expensive or very large purchases. Students will need to be aware of the eight steps in the business buying process as well as all of the participants in this process and the roles they play.