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CHAPTER THREE

CUSTOMERS MARKET
 CHAPTER THREE 02/14/2025 2

CONSUMER MARKET AND CONSUMER BUYING BEHAVIOR

Consumer market
Consists all the individuals and households that buy or acquire
goods and services for personal consumption.
Consumer Buying Behavior

Refers to the buying behavior of final consumers—

individuals and households that buy goods and
services for personal consumption.
Buying behavior is never simple, yet understanding it
is an essential task of marketing management. Different
factors at many levels affect consumer buying behavior.
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Consumers around the world vary tremendously

in age, income, education level, and tastes.
They also buy an incredible variety of goods and
services.
How these diverse consumers relate with each
other and with other elements of the world around
them impacts their choices among various
products, services, and companies.
Here we examine the fascinating(attractive)
array of factors that affect consumer
behavior.
 Characteristics affecting consumer behavior 02/14/2025 4

 Many levels of factors affect our buying behavior—from broad

cultural and social influences to motivations, beliefs, and attitudes
laying deep within us.
Consumer purchases are influenced strongly by :-
1. Cultural factors: Cultural factors exert a broad and deep influence
on consumer buying behavior. Marketers need to understand the
role played by the buyer’s culture, subculture, and social class.
 Culture
 The set of basic values, perceptions, wants, and behaviors learned by
a member of society from family and other important institutions.
Every group or society has a culture, and cultural influences on
buying behavior may vary greatly from country to country. A failure
to adjust to these differences can result in ineffective
marketing or embarrassing mistakes.
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 Subculture
A group of people with shared value systems based on
common life experiences and situations. Subcultures include
nationalities, religions, racial groups, and geographic
regions.
 Social class
Relatively permanent and ordered divisions in a society
whose members share similar values, interests, and
behaviors.
2. Social Factors
A consumer’s behavior is influenced by social factors, such
as the consumer’s small groups, family, and social roles
and status.
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 Group
Two or more people who interact to accomplish individual or
mutual goals.
 Family

Family members can strongly influence buyer behavior.

The family is the most important consumer buying
organization in society, and it has been researched
extensively.
Marketers are interested in the roles and influence of the
husband, wife, and children on the purchase of different
products and services
 … contd.
 Roles and Status 02/14/2025 7

The person’s position in different group can be

defined in terms of both role and status.
A role consists of the activities people are expected to
perform according to the people around them. People
usually choose products appropriate to their roles and
status.
3. Personal Factors
A buyer’s decisions are influenced by personal
characteristics such as the buyer’s age and life-cycle stage,
occupation, economic situation, lifestyle, personality and
self-concept.
 … contd.
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4. Psychological Factors
A person’s buying choices are further influenced by
major psychological factors:
omotivation
operception : the process by which people select,
organize, and interpret information to form a meaningful
picture of the world.
oLearning: changes in an individual’s behavior arising
from experience
obeliefs and attitudes: belief is a descriptive thought that
a person holds about something. Attitude is a person’s
consistently favorable or unfavorable evaluations,
feelings, and tendencies toward an object or idea.
 Types of Buying Decision Behavior 02/14/2025 9

 Some purchases are simple and routine, even habitual.

Others are far more complex— involving extensive
information gathering and evaluation.
 Four types of consumer buying behavior based on the
degree of buyer involvement and the degree of
differences among brands are:
a. Complex Buying Behavior
Consumer buying behavior in situations characterized by
high consumer involvement in a purchase and significant
perceived differences among brands. Consumers may be
highly involved when the product is expensive, risky,
purchased infrequently, and highly self-expressive.
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b. Dissonance - reducing buying behavior

Consumer buying behavior in situations characterized by high

involvement but few perceived differences among brands. It occurs

when consumers are highly involved with an expensive, infrequent,

or risky purchase but see little difference among brands.

c. Habitual buying behavior

Consumer buying behavior in situations characterized by low-

consumer involvement and few significantly perceived brand

differences. It occurs under conditions of low-consumer involvement

and little significant brand difference.

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d. Variety-seeking buying behavior

Consumer buying behavior in situations
characterized by low consumer involvement but
significant perceived brand differences.
Consumers undertake variety-seeking buying
behavior in situations characterized by low
consumer involvement but significant perceived
brand differences. In such cases, consumers often
do a lot of brand switching. Brand switching
occurs for the sake of variety rather than because
of dissatisfaction.
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Summary

High involvement Low involvement

Significant differences
Complex Buying Behavior Variety-Seeking Buying
between brands Behavior

Few differences Dissonance-Reducing

between brands Buying Behavior Habitual Buying Behavior
 The Buyer Decision Process 02/14/2025 13

 The actual purchase decision is part of a much larger buying process—

starting with need recognition through how you feel after making the
purchase. Marketers want to be involved throughout the entire buyer
decision process. The buyer decision process consists of five stages:
o Need recognition
 The first stage of the buyer decision process, in which the consumer
recognizes a problem or need.
o Information search
 The stage of buyer decision process in which the consumer is aroused
to search for more information; the consumer may simply have
heightened attention or may go into an active information search.
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oAlternative evaluation
 The stage of buyer decision process in which the consumer
uses information to evaluate alternative brands in the
choice set.
oPurchase decision
 The buyer’s decision about which brand to purchase.

oPost purchase behavior

 The stage of buyer decision process in which consumers
take further action after purchase based on their satisfaction
 The buyer decision process for new products
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 New product
A good, service, or idea that is perceived by some
potential customers as new.
 Adoption process
The mental process through which an individual passes
from first hearing about an innovation to final adoption.
Stages in the Adoption Process
Consumers go through five stages in the process of
adopting a new product:
[Link]: the consumer becomes aware of the new
product but lacks information about it.
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[Link]: the consumer seeks information about the new product.

[Link]: the consumer considers whether trying the new product makes
sense.

[Link]: the consumer tries the new product on a small scale to improve his or her
estimate of its value.
[Link]: the consumer decides to make full and regular use of the new product.
Individual Differences in Innovativeness
 People differ greatly in their readiness to try new products. In each product area,
there are “consumption pioneers” and early adopters.
 Other individuals adopt new products much later. Therefore, People can be
classified into five adopter groups have differing values. They are:
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1. Innovators: are consumers — they try new ideas at

some risk
2. Early adopters: are consumers — they are opinion
leaders in their communities and adopt new ideas early
but carefully
3. Early Majorities: are consumers — although they rarely
are leaders, they adopt new ideas before the average
person
4. Late majorities: are consumers —they adopt an
innovation only after a majority of people have tried it
5. Laggards: are consumers — they are suspicious of
changes and adopt the innovation only when it has
become something of a tradition itself.
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Influence of Product Characteristics on Rate of Adoption

 The characteristics of the new product affect its rate of adoption. Some
products catch on almost overnight while Others take a longer time to gain
acceptance.
 Five characteristics are especially important in influencing an innovation’s
rate of adoption. They are:
1. Relative advantage: the degree to which the innovation appears superior to
existing products.
2. Compatibility: the degree to which the innovation fits the values and
experiences of potential consumers.
3. Complexity: the degree to which the innovation is difficult to understand or
use.
4. Divisibility: the degree to which the innovation may be tried on a limited
basis.
5. Communicability: the degree to which the results of using the innovation
 Class Activity 02/14/2025 19

 Write your own definition of the following business terms and

phrases:
 Customers
 Consumers
 Consumer customers(Consumer Market)
 Business customers(Business Market)
 Consumer buying behavior
 Business buyer behavior
 Form a group of five with your nearby classmates and compare
your definition with your friends.
BUSINESS MARKET AND BUSINESS BUYING BAHAVIOR
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Business Market
 It is one type of customer market in which
customers buy goods and services for further
processing or for use in their production process.
Business Buyer Behavior(BBB)
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
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BBB also includes the behavior of retailing and

wholesaling firms that acquire goods to resell or rent them
to others at a profit.
NB. Therefore, business-to-business (B2B)
marketers must do their best to understand
business markets and business buyer behavior.
Like businesses that sell to final buyers, they
must build profitable relationships with
business customers by creating superior
customer value.
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Business Buying Process

The decision process by which business buyers determine
which products and services their organizations need to
purchase and then find, evaluate, and choose among
alternative suppliers and brands.
Characteristics of Business Markets
The business market is huge. In fact, business markets
involve far more dollars(birrs) and items than do consumer
markets.
Market Structure and Demand
Business markets contain fewer but larger buyers.
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 Business buyer demand is derived from final consumer

demand [= business demand that ultimately comes from
(derives from) the demand for consumer goods].
 Demand in many business markets is more inelastic —not
affected as much in the short run by price changes.
Nature of the Buying Unit
 Business buying is done by trained purchasing agents.
 Technical experts and top management are common in the
buying of major goods
 Business buying involves more decision participants and a
more professional purchasing effort.
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Types of Decisions and the Decision Process

 Business buyers usually face more complex buying decisions.
 Business 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
 The business buying process is more formalized.
 Large business purchases usually call for detailed product
specifications, written purchase orders, careful supplier searches,
and formal approval.
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 B2B marketers may roll up their sleeves and work closely

with their customers during all stages of the buying process
— from helping customers define problems, to finding
solutions to supporting after-sale operation.
 In business buying, buyers and sellers work more closely
together and build close long-term relationships.
Business Buyer Behavior
 Business buying decisions can range from routine to
incredibly complex, involving only a few or very many
decision makers and buying influences.
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 Within the organization, buying activity consists of two major

parts: the buying center, composed of all the people involved in the
buying decision, and the buying decision process.
 The buying center and the buying decision process are influenced
by internal organizational, interpersonal, and individual factors as
well as external environmental factors.
Major Type of Buying Situations
 There are three major types of buying situations. They are:
Straight rebuy: a business buying situation in which the buyer
routinely reorders something without any modifications. It is usually
handled on a routine basis by the purchasing department.
Modified rebuy: a business buying situation in which the buyer
wants to modify product specifications, prices, terms, or suppliers.
 … contd.
New task: a business buying situation in which 02/14/2025
the buyer purchases
27 a
product or service for the first time. In such cases, the greater the cost
or risk, the larger the number of decision participants and the greater
the company’s efforts to collect information.
Participants in the Business Buying Process
 Users: are members of the buying organization who will actually
use the purchased product or service.
 Influencers: are people in an organization’s buying center who
affect the buying decision; they often help define specifications and
also provide information for evaluating alternatives.
 Buyers: are people in an organization’s buying center who make an
actual purchase.
 Deciders: are people in an organization’s buying center who have
formal or informal power to select or approve the final suppliers.
 Gatekeepers: are people in an organization’s buying center who
control the flow of information to others.
 Major Influences on Business Buyers 02/14/2025 28

 Environmental Factors
 Business buyers are heavily influenced by factors in the current
and expected economic environment, such as the level of primary
demand, the economic outlook, and the cost of money.
 Another environmental factor is the supply of key materials.
 Many companies now are more willing to buy and hold larger
inventories of scarce materials to ensure adequate supply.
 Business buyers also are affected by technological, political, and
competitive developments in the environment.
 Finally, culture and customs can strongly influence business buyer
reactions to the marketer’s behavior and strategies, especially in
the international marketing environment.
 Therefore, the business buyer/business manager must watch these
factors, determine how they will affect the buyer, and try to turn
 … contd.
 Organizational Factors 02/14/2025 29

 Each buying organization has its own objectives, strategies,

structure, systems, and procedures, and the business marketer must
understand these factors well.
 Interpersonal Factors
 The buying center usually includes many participants who
influence each other, so interpersonal factors also influence the
business buying process.
 Therefore, whenever it is possible, business marketers must try to
understand these factors and design strategies that take them into
account.
 Individual Factors
 Each participant in the business buying decision process brings in
personal motives, perceptions, and preferences. These individual factors
are affected by personal characteristics such as age, income, education,
professional identification, personality, and attitudes toward risk.
 The Business Buying Process 02/14/2025 30
Eight stages of the business buying process are:
 Problem recognition
The first stage of the business buying process in which someone in
the company recognizes a problem or need that can be met by
acquiring a good or a service.
 General need description
The stage in the business buying process in which a buyer describes
the general characteristics and quantity of a needed item.
 Product specification
The stage of the business buying process in which the buying
organization decides on and specifies the best technical product
characteristics for a needed item.
 Supplier search
The stage of the business buying process in which the buyer tries to
find the best vendors.
 … contd.
 Proposal solicitation 02/14/2025 31

The stage of the business buying process in which the buyer invites
qualified suppliers to submit proposals.
 Supplier selection
The stage of the business buying process in which the buyer
reviews proposals and selects a supplier or suppliers.
 Order-routine specification
The stage of the business buying process in which the buyer writes
the final order with the chosen supplier(s), listing the technical
specifications, quantity needed, expected time of delivery, return
policies, and warranties.
 Performance review
The stage of the business buying process in which the buyer
assesses the performance of the supplier and decides to continue,
modify, or drop the arrangement.