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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.

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 MEANING
Marketing attempts to provides answers to the following questions by studying buyer behavior.
Who participates in buying? Participants in buying.
What do they buy? Objects of buying.
Why do they buy? Reasons for buying.
When do they buy? Occasions for buying.
Where do they buy? Channels/Place for buying.
How often do they buy? Frequency for buying.
How often they use it? Frequency of use.
What they do to the residual part of the product after the use? Disposal methods.

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.

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IMPORTANCE OF BUYER BEHAVIOR

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 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 the decision making units and processes involved in
acquiring, consuming and disposing of goods, services, experiences and ideas.

Acquiring Consuming Disposing

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 CONSUMER BUYING PROCESS

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. 2/8/2023 7:01 AM
 CONSUMER BUYING PROCESS

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. 2/8/2023 7:01 AM
 CHARACTERISTICS OF BUYING DECISIONS

Characteristics
Brand of the product Many Few
Level of buying risk Low High
Amount of money involved Small Large
Purchase time needed Short Long
Interest in product information Passive Active
Attitude toward the product Positive Uncertain
Product benefits Short term Long term
Interest in the product Limited High
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 STAGES OF CONSUMER BUYING PROCESS
Need or Problem Internal: Hunger, thirsts, sleep, shelter etc.
Recognition External: Advertisement, window display etc.

Collection of information about products, brands, stores, prices,

Information Search quality, features, advantages and other attributes and benefits
from internal and external sources.

Product class attributes: Features, name, price, quality, services,

Evaluation of Alternatives warranty etc.
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.
Purchase Decision

Consumption and usage, satisfaction and dissatisfaction,

Post Purchase Behavior
consumer complaints, disposal.
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 PRODUCT DISPOSAL
Rent it Lend it

Give it Throw it
Trade it Sell it
away away

Use it for Use it for new

Store it
original purpose purpose

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FACTOR DETERMINING CONSUMER BUYING DECISIONS

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
1. Consumer’s Income

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
2. Liquid Assets

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
3. Saving, Debt and Credit Availability

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FACTOR DETERMINING CONSUMER BUYING DECISIONS

4. Economy Condition
Business cycle, inflation, money supply,
interest rates, economic development etc.

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FACTOR DETERMINING CONSUMER BUYING DECISIONS

5. Attitude towards spending

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
1. Consumer’s Income
2. Liquid Assets
3. Saving, Debt and Credit Availability
4. Economy Condition
5. Attitude Towards Spending

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
1. 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.

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
2. Family size and the family life cycle

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
3. Gender

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
4. Life style
It is defined as the patterns in which people live and spend time and money.

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
5. Occupation

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
1. Age
2. Family size and the family life cycle
3. Gender
4. Lifestyle
5. Occupation

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
1. Motivation
A motivation is an energizing force that directs an
individual towards doing something in some manner.

2. Perception
Perception refers to the process of receiving and
interpreting stimuli by the individual and translating
into response.

3. Learning
Learning refers to a more or less permanent change
in behavior which occurs as a result of practice or
experience.

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FACTOR DETERMINING CONSUMER BUYING DECISIONS
4. Attitudes
Attitude is person’s judgement toward some object,
people or event. It reflect likes and dislikes of consumers.
Personal experience, environment and situation molds
attitude.
5. Belief
A belief is a descriptive thought that a consumer holds
about something. It can be knowledge, opinion or faith.

6. 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. 2/8/2023 7:01 AM
FACTOR DETERMINING CONSUMER BUYING DECISIONS
1. Family
2. Reference groups
3. Social class
4. Status
5. Culture
6. Rules/norms of a society

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 ORGANIZATIONAL BUYER BEHAVIOR
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.” 2/8/2023 7:01 AM
 CONSUMER & ORGANIZATIONAL BUYER
Organizational Consumer
Characteristics
Market Market
1. Few buyers Yes No
2. Close supplier / customer relationship Yes No
3. Geographical concentration of market Yes No
4. Derived and fluctuating demand Yes No
5. Large buyers Yes No
6. Inelastic demand Yes No
7. Fluctuating demand Yes No
8. Professional purchasing Yes No
9. More buying influences Yes No

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 ORGANIZATIONAL MARKET
Organizational markets are those that buy goods for business use, production purposes or
for reselling purposes.

Business and industries buy Resellers buy products to Government buys products Non-governmental organizations buy
products for business use or resell at a profit. for use in offices and products to provide service to their
to produce other products. clients. They can be hospitals,
development projects or to
educational institutions, political parties,
provide service to people. religious and social organizations.
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 ORGANIZATIONAL BUYING PROCESS
Need or Problem Starts from diminishing inventory levels of raw materials, parts, spares
Recognition and supplies or breakdown in current operations from new product
developments, expansion of organizational operations and other reasons.
Preparing Product Detail specifications of the product or service requirements by technical
Specifications committee.

Internal search and external search.

Supplier 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.

Consumption and usage, satisfaction and dissatisfaction, consumer

Post Purchase Behavior complaints, disposal. 2/8/2023 7:01 AM
FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS
1. Level of demand
2. Economic health
Prosperity
Recession
Recovery
3. Competition
Pure competition (many competitors with similar
products)
Oligopoly (few competitors with similar products)
Monopolistic (many competitors with different
products)

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS
1. Level of technology
2. Pace of technological change

E-commerce and development in information technology have

revolutionized purchasing and inventory management by business
buyers.
Technological changes have destroyed existing industries and
started entirely new industries.

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS
1. Political Factors:
Government policies
Regulations
Political climate

2. Legal Factors:
Legal provisions
Business Laws

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS
• Pursuit of goals that are good for society.
• Should protect society’s interest.
• Should protect environment and meet
community needs.
• Buying of domestic products should be
preferred.
• Organizational buying should be sensitive to
the interests of the various pressure groups.

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS
Business firm-Quality
Government-Lowest bidders
Intermediaries-Favor products with greater brand value.

Centralization & Decentralization

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS

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FACTOR DETERMINING ORGANIZATIONAL BUYING DECISIONS

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 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. Very little research has been done
in this area.
Product positioning has remained largely neglected because of the lack of knowledge about he
behavior of consumer niches.
Marketers know very little about the consumer behavior at every stage of the consumer buying
process. The post-purchase stage is hardly considered. The disposal aspect is neglected which has
created serious environmental problems due to the rising levels of pollution.
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. Only the price is given high consideration.
The marketing resources have not been efficiently utilized. Rural markets have been neglected.
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 GLOBAL CONSUMER MOVEMENT
The Consumer Movement defined:
 An effort to promote consumer protection through an organized social movement which is in many
places led by consumer organizations.
 Policies aimed at regulating products, services, methods and standards of manufacture, selling,
advertising in the interests of the buyer.

Philip Kotler and G. Armstrong

"Consumerism is an organized movement of citizens and Government to impose the rights and
powers of buyers in relation to sellers".

Cravens and Hills

"Consumerism is a social force within the environment designed to aid and protect the consumer by
exerting legal, moral and economic pressure on business".

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 GLOBAL CONSUMER MOVEMENT
• Started in the year 1920.

• Protect the interest of the consumers and to give them

satisfaction in purchase.

• Advocates for the rights of consumers.

• Adam Smith wrote Wealth of Nations in 1776. He said that

consumers will make choices that give them the greatest

amount of satisfaction.

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 IMPORTANCE OF GLOBAL CONSUMER MOVEMENT
Protection from Unsafe Products

Protection Against Pollution

Bringing consumer together

Creating consumer awareness

Protection against unfair trade practices

Timely supply of essential commodities

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 CONSUMER PROTECTION
EMERGE

-1985 UN GUIDELINES-”LET THE BUYER

BE AWARE”.
-1988 IN NEPAL.

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 IMPORTANCE OF CONSUMER PROTECTION
• ADVISE THE GOVERNMENT ON CONSUMER ISSUES
• CONDUCT MARKET SURVEYS AND RESEARCH INTO CONSUMER PROTECTION PROBLEMS
• CONDUCT PRODUCT TESTING FOR SAFETY AND QUALITY

PROBLEMS
• LACK OF AWARENESS AMONG CONSUMERS ABOUT THEIR RIGHT AND DUTIES.
• MAJORITY OF POOR AND ILLITERATE.
• CONSUMER NEGLIGENCE.
SOLUTIONS
• ORGANIZED CONSUMER TOGETHER
• IMPLEMENT PUNISHMENT FOR THE SERVICE PROVIDER.
• INSPECT MARKET REGULARLY.
• EDUCATE THE CONSUMER.
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 CONSUMERS ARE ENCOURAGED TO AVOID PRODUCTS THAT:

• CAUSE ENVIRONMENTAL DEGRADATION DURING THE

EXTRACTION OF NATURAL RESOURCES OR DURING THEIR
MANUFACTURE, USE AND DISPOSAL
• UTILIZE LARGE AMOUNTS OF ENERGY DURING THEIR
MANUFACTURE, USE OR DISPOSAL
• CAUSE UNNECESSARY WASTE, DUE TO OVER-PACKAGING OR
SHORT LIFE SPAN

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 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.
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 BOARD QUESTIONS
1. Point out the process of organization buying. -1
2. List any two points of importance of consumer behavior. -1
3. State any three types of purchase situation faced by the consumer. -1
4. Write down the steps of consumer buying decision process. -1
5. List the determinants of organizational buying behavior. -1
6. Explain the buying process of consumer. -1
7. What is buying behavior? -1
8. List out the buying process of organization buyer behavior. -1

9. What is consumer behavior? Explain the determinants of consumer buying decision. -10
10. What are the determinants of organizational buying behavior? Explain them. -5
11. What is organizational buying? How does it differ from consumer buying? Explain. -5
12. Explain the determinants of industrial buying process. -5
13. Discuss the consumer buying decision process. -5
14. Describe the importance of global consumer movements for consumer protection. -5

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 CASE I- WOMEN SHOPPERS OVER THE YEARS
1980 AD: A housewife plans a shopping trip MS Rita Shrestha is married with two teenage kids, husband a
manager in a private firm. Shrestha’s are upper middle class Family. After sending husband to work and children
to school, Rita takes off her apron, puts on lipstick, picks up her shopping list and carry bag and is off to the near
by market. She makes the shopping list once a week, which includes grocery, toiletry, washing powder and
occasional chocolate for the kids. She walks the half of kilometer distance to the market. On return journey she
will take a taxi as she would be carrying her shopping too.
2010 AD: Working women plan shopping well in advance. Holidays are meant for shopping, house cleaning and
visiting friends. Today, miss Rina Sharma is planning a shopping expedition. She calls her friends Prema and
Rimi on her cell phone in conference mode. They decide to meet at 11 AM at the city Center at Kamal Pokhari.
“Let us do some window shopping first and then we can decide to go for the real thing.” They enter the cosmetic
area and get busy trying out different shades of lipsticks, eye shadows, and nail polishes. Prema buys some items
and flashes her credit card to make the purchase. Next they are in a store for ready to wear dresses. Here Rina
wants to buy a dress to wear at the next birthday party. Dress is selected after she has tried out a dozen dresses.
Next, she must get matching shoes and accessories which are luckily all available in the same shop at different
counters. Time for a Coffee break, food court in the next stop. After shopping and snacks, they visit 4D movies
for the final thrill.
Questions for Discussions
Analyze the changes in shopping behavior of the middle-class and the upper middle-class in the context of the
cultural transformation in the urbanites of Nepal.
How should marketers in Nepal response to those changes ? 2/8/2023 7:01 AM
Case Study II: Cool Corporation
The marketing manager of Cool Corporation was wondering about the marketing strategy for a new brand of air-conditioner that his company was shortly going to introduce.
The model of the air-conditioner, he knew, had been tested successfully for its technical qualities and series. He felt that he did not know enough about the prospective buyers
of air-conditioners.
Cool Corporation had been manufacturing and marketing household refrigerators for the last twenty years. The company was a market leader in the refrigerator field. Over the
years, the company had built up a large network of sales, distribution an service facilities. The company also enjoyed good reputation for service. The company had added deep
freezers to its product line five years ago. The market for these was, however, largely institutional, the marketers of ice cream and soft drinks being the primary customers.
The research and development department had successfully developed an air-conditioner, which was found to be efficient in terms of both, cooling power as well as energy
consumption. The cost structure was such that the product could be competitively priced.
The marketing manager wanted to first introduce the product in a few cities and then extend it elsewhere. However, in order to formulate the marketing strategy, the marketing
manager felt he needed to know about the customer’s purchasing decision process. Therefore a research group was asked to submit their findings and recommendations.
Finding of the study:
1. Need initiator: It was found that 44% felt the need for an air-conditioner by themselves and 36% said that the need was initiated by family members. The most important
par in initiating the need was played by the head of the family and the wife.
2. Need influencer: The survey showed that atmospheric condition was ranked as first important factor, financial condition as second, building a house as third and status
symbol as forth important factor as need influencer.
3. Awareness: Newspaper advertisement was considered in top priority followed by television, magazines and hoardings.
4. Source and type of information: Respondents collected information from users, friends, dealers, and company show-rooms.
5. Product attributes: The most important attribute of an air-conditioner was durability followed by service delivered by the air-conditioner and the capacity.
6. Purchase influencer: The purchase transaction was finalized mostly by the head of the house and among the family members, by the wife.
7. Market segmentation: Higher incomer groups possessed more number of air-conditioners. Most of the owners of air-conditioners were businessmen and industrialists.
8. Time taken for buying process: One group purchased air-conditioner in shorter duration (less that six months) and the other took as much as two or more years. The
second group consisted for mainly businessmen.
9. Post purchase experience: Experience with regard to performance, electricity consumption and repair service determined the extent to which users were satisfied with
their units.
The marketing managers’ dilemma
The marketing manager of Cool Corporation was trying to interpret the finding. He was not sure how he could use this understanding of buyer behavior in formulating the
strategy.
Questions:
a. Who are the buyers of air conditioners?
b. Identify the elements of buyers behavior in the above case.
c. Who are the key actors in making purchase decision?
d. Based on buyer behavior information, what should be the marketing strategy of air conditioners?
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