Principles of Marketing 162 MKTG Chapter 5: Understanding Consumer and a Business Buyer Behavior Study Guide

The rate of adoption is affected by the characteristics of the new product and the five characteristics are relative advantage, compatibility, complexity, communicability, and divisibility.

What are the rate of adoption affected by and ?

The stages in the buyer decision process containing, need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.

What are the stages in the buyer decision process?

This black box has two parts: buyer characteristics and the buyer's decision process.

What are the two parts of the black box?

In order design good marketing strategies, marketers need to understand what happens within the organization to turn stimuli into purchases responses.

What do markets need to do in order to define good marketing strategies?

The adopter classification suggests that a new firm should complete research on the characteristics of innovators and early adopters in their product categories and direct original marketing efforts toward them.

What does the adopter classification suggest?

The fourth step of the buyer decision process is that next, the consumer makes a purchase decision and actually purchases the product.

What is the fourth step of the buyer decision process?

The consumer market

consists of all the individuals and households that buy or obtain services for personal consumption?

Adoption

the consumer decides to make full and regular use of the new product. Also this process suggest that markets should think about how to assist consumers to move through the five different stages.

Interest

the consumer seeks information about the new product.

Trial

the consumer tries the new product on a small scale to improve his or her estimate of its value.

Communicability

the degree to which the results of using the innovation can be observed or described to others

Customer companies are developing relationships by practicing supplier development, which systematically developing networks of supplier-partners to ensure a dependable supply of the products and materials that they use in making their own products or reselling to others.

How are customer companies developing relationships

Marketing and other stimuli affect the buying organization and produce certain responses from buyers.

What affects the buying organization?

There are more complex buying decision are faced by business buyers than do consumer buyers. Business purchases sometimes involve large quantities of money, complex economic and technical considerations, and interactions among people at many levels of the buyer's organization. The business buying process tends to also be longer and more formalized.

What also involved in the business buying process?

Most business marketers have inelastic and more fluctuating demand. The total demand for many business products not much affected by changes in prices, especially in the short run. The demand for many business services and goods usually change more and more frequently than does the demand for consumer services and goods. Large increases in business demand are a result of a small percentage increase in consumer demand.

What are also other differences between the business market and consumer market?

Early adopters are adopters who are guided by respect as they are opinion leads in their communities and adopt new ideas early but cautiously.

What are early adopters?

Early .mainstream adopters are planned however they are hardly leaders, they adopt new ideas before the normal person.

What are early mainstream adopters?

Innovators are venturesome as they want to try new ideas at some risk.

What are innovators?

Lagging adopter are bound by tradition which means that they are suspicious of changes and adopt the new product only when it has become something of a tradition itself.

What are lagging adopters?

Late mainstream adopters are skeptical they adopt a new product only after most of the people have tried it.

What are late mainstream adopters?

Social factors are small groups, family influences, and social network which strongly affect brand and product choices, as do personal characteristics, such as age, occupation lifestyle, and personality.

What are social factors?

Within the organization, buying activity contains two many parts which the buying center, which composed of all the people who are involved in the buying decision, and the buying decision process.

What are the buying activity that contains two important parts?

The buying decision process and the buying center ae influenced by internal organizational, interpersonal, and individual factors and also external environmental factors.

What are the buying decision process and the buying center influenced by?

In some ways, business markets are extremely similar to consumer markets because they both contain people who assume buying roles and make buying decisions to satisfy needs. Although, business markets are different in many ways from consumer markets. The main differences are in the market structure and demand, the nature of the buying unit, and the types of decisions and the decision process that is involved.

What are the differences between consumer markets and business markets?

The eight stages of the business buying decision process which is 1. problem recognition, 2. general need description, 3. product specification, 4. supplier search, 5. proposal solicitation, 6. supplier selection, 7. order-routine specification, and 8. performance review.

What are the eight states of the business buying decision process?

1. innovators 2. early adopters 3. early majority 4. late majority 5. laggards

What are the many different adopter groups?

There are many influences of business buyers when they make their buying decisions. Some marketers believe that the major influences are economic and think that buyers will favor the supplier who offers the lowest price or the most service or the best product. Such economic factors are extremely important to business buyers, especially in a tough economy. However, business buyers actually responded to both personal and economic factors.

What are the many influences of business buyers?

Business to business marketers needs to do their best to understand business buyer behavior and business markets. They must engage business customers and build profitable relationships with them by creating exceptional customer value.

What do business to business marketer need to do?

Each person who is involved in the business buying decision process brings in personal motives, preferences and perceptions. These individual factors are affected by personal characteristics such as income, education, age, professional identification, personality, and attitudes toward risk. Also, buyers have different styles of buying.

What does each person who is involved in the business buying decision process bring?

Business buyer behavior refers to the buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. This also includes the behavior of retailing and wholesaling firms that obtain goods to resell or rent to others at a profit. In the business buying process, business buyers determine which products and services their organizations need to buy and discover, evaluate, and choose among alternative suppliers and brands.

What does the business buyer behavior refer to?

. Business buyers are also affected by technological, political, competitive and supply developments in the environment. Lastly, culture and customs can strongly influence business buyer reactions to marketer's strategies and behavior, especially in the international marketing environment. The business buyer needs to keep a close eye on these factors to determine how they will affect the buyer and try to turn these difficulties into opportunities.

What else are business buyers affected by?

Organizational factors are also key as each buying organization has its own objectives, strategies, structure, systems, and procedures, and the business marketer must understand these factors well. Interpersonal factors also influence the business buying process. However, it is often challenging to assess such interpersonal factors and group dynamics.Whenever possible, business marketers need to try and understand these factors and design strategies that take them into account.

What factors influence the business buying process?

While in the long run, however, business to business marketers maintain customers by meeting current needs and by partnering with them to assist them to solve their own issues.

What goes in the longs?

During the need recognition stage, the consumer discovers a problem or need that could be satisfied by a service or product.

What happens during the first step of the buyer decision process?

Maslow's Hierarchy of Needs describes that human needs are arranged in a hierarchy from the most pressing at the bottom to the least pressing at the top. They include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs.

What is Maslow's Hierarchy of needs?

A business purchases is compared with consumer purchases which the initial purchase usually involves more decision participants and a more professional purchasing effort. Sometimes business buying is accomplished by trained purchasing agents who spend their career lives learning how to purchase better. The more complex the purchase, the more likely it is that several people will partake in the process of making a decision.

What is a business purchase compared with?

in a modified rebuy, the buy wants to modify product specifications such as prices suppliers, or terms. The "in" suppliers could become nervous and feel pressure to put their best foot forward to protect an account. While "out" suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business with the company.

What is a modified rebuy?

A new product is a good, service, or idea that is perceived by some potential customers as new, which could have been around for some time, but our interest is in how consumers learn about products for the first time and make a choice on whether to adopt them.

What is a new product?

In a straight rebuy, the buyer reorders something without any modifications which is usually handled on the same routine basis by the purchasing department. In order to keep business, "in" suppliers try to keep customer engagement and product and service quality. "Out" suppliers try to find new ways to add value or exploit dissatisfaction so that the buyer will think of them.

What is a straight rebuy?

Consumer buyer behavior is influenced by four important sets of buyer characteristics; cultural, personal, social, and psychological. Also, understanding these factors can assist marketers to discover interested buyers and to shape products and appeals to serve consumers needs better.

What is consumer buyer behavior influenced by?

Consumer buying behavior is lastly influenced by four key sets of psychological factors, perception, beliefs and attitudes, motivation, and learning. Lastly, each of these factors provides a different view for comprehending the workings of the buyer's black box.

What is consumer buying behavior lastly influenced by?

In the process of adopting a new product, the consumer goes through five stages which contain, awareness, interest, evaluation, trial, and adoption.

What is in the adoption process?

We define the adoption process as the mental process through which an person passes from first learning about a change to final adoption. Also, the decision by an individual to become a regular consumer and user of the product is another definition of adoption.

What is the adoption process

The diffusion process in regard to a new product is that consumers respond at different rates, depending on product characteristics and the consumer.

What is the diffusion process in regard to a new product?

The fifth step of the buying process is the proposal solicitation stage of the business buying process is when the buyer invites qualified suppliers to submit proposals. In response, some suppliers will refer the buyer to its web site or promotional material or send a salesperson to call on the prospect. However, when the item is expensive or complex, the buyer will mainly require detailed written proposals or formal presentations from each potential supplier. Business marketers need to be skilled in writing, researching and presenting proposals in response to buyer proposal solicitations.

What is the fifth step of the buying process?

When the company notices a problem is when the buying process starts which is that the need can be met by obtaining specific service or products. Problem recognition could result from external or internal stimuli.

What is the first step of buying process?

Now the buyer needs to conduct a supplier search to discover the best vendors, which the buyer can compile a short list of qualified suppliers by reviewing trade directories, doing online searchers, or phoning other companies for recommendations. Currently, more and more companies are turning toward the internet to find suppliers.

What is the fourth step in the buying process?

The last step in the buyer decision process is post-purchase behavior, which means that the consumer takes action on the recent purchase based on dissatisfaction and satisfaction. Lastly, the marketer's job is to known the buyer's behavior at every stage and the influences that are operating.

What is the last step of the buyer decision process?

The last step of the buying process is the performance review which the buyer reviews supplier performance. The buyer could contact users and ask them to rate their satisfaction. The performance review could lead the buyer to continue, modify, or drop the arrangement. The seller's job is to watch the same factors used by the buyers to make sure that the seller is giving the expected satisfaction.

What is the last step of the buying process?

The buying center concept presents a major marketing difficulty which is that the business marketer needs to learn who participates in the decisions, each participant's relative influence and what evaluation criteria each participant use which can be challenging.

What is the major marketing difficulty that the buying center concept presents?

Culture is the most basic determinant of a person's behavior and wants. People in different cultural, social class groups and sub-cultural have different brand and product preferences.

What is the most basic determinant of a person's wants and behavior?

A new task situation is when a company buys a product or service for the first time. In some cases, the greater the risk or cost, the larger the number of decision partakers and the greater the company's efforts to gather information. Marketer's greatest challenge and opportunity is the new task situation. Not only does the marketer try to reach as many key buying influences as possible but also provides information and help. While the buyer makes the fewest decisions in the straight rebuy and the most in the new task decision.

What is the new task situation?

The second step of the buying process is that the buyer next prepares a general need description that describes the characteristics and quantity of the need item once they have recognized a need. The team might want to rank the importance of reliability, price, durability, price and other attributes desired in the item. In that phase, the alert business marketer can help the buyers define their needs and provide information about the value of different product characteristics.

What is the second step of buying process?

The second step of the buyer decision process is once the need is discovered, the consumer moves into the information search stage.

What is the second step of the buyer decision process?

The seventh step of the buying process is he buyer now prepares order-routine specifications. In the case of maintenance, repair, and operating items, buyers could use blanket contracts instead of periodic purchase orders. A blanket-contract creates a long term relationship in which the supplier promises to resupply the buyer as a need at agreed prices for a set time period.

What is the seventh step of the buying process?

The members of the buying center now look over the proposal and select a supplier or suppliers. During supplier selection, the buying center often will draw up a list of the desired supplier attributes and their relative importance. Many buyers prefer many sources of supplies to avoid being totally dependent on one supplier and to allow comparisons of prices and performance of several suppliers over time.

What is the sixth step of the buying process?

The stimuli model of consumer behavior that marketing stimuli and other major forces go into the consumer's black box. Once in the black box, the inputs result in the response of the buyer, such as purchase behavior, buying preferences and attitudes.

What is the stimuli model of consumer behavior suggest?

The third step of the buyer decision process is that after the information is found, the consumer proceeds to alternative evaluation and assesses brands in the choice set.

What is the third step of the buyer decision process?

The third step of the buying process is the product specifications, usually help with the value analysis engineering team. Product value analysis is an approach to cost reduction in which components are studied carefully to find out if they can be redesigned, standardized, or made by less costly methods of productions. The team then decides on the best product characteristics and specifies them accordingly.

What is the third step of the buying process?

Sales go to suppliers who meet buyers' immediate product and services needs in the short run.

Where do things go in the short run?

The buyer and seller are often much more dependent on each other in the business buying process. Also The business to business marketer works closely with the customer during every stage of the buying process by helping customers define problems in finding solutions to discovering solutions to supporting the after-sale operation.

Who are usually much more dependent on each other in the business buying process?

The buying center usually contains some usual people involved who formally are participating in the decision.

Who is in the buying center?

The buying center

is the decision-making unit of a buying organization which contains all of the individuals and units that play a role i the business purchase decision-making process, which contains the actual users of the product or services, those whole influence the buying decision, those who do the actual buying, those who make the buying decision and those who control buying information.

Relative advantage

is the degree to which the innovation appears superior to existing products.

Compatibility

is the degree to which the innovation fits the values and experiences of possible consumers.

Complexity

is the degree to which the innovation is difficult to understand or use.

Divisibility

is the degree to which the innovation may be tried on a limited basis

Awareness

the consumer becomes aware of the new product but lacks information about it.

Evaluation

the consumer considers whether trying the new product makes sense.