Focus on customers the psychology of buying behaviour

Slide: 1
Slide 1More free downloads and templates at: 1stOutsource Research
Dr Stephanie J. Morgan
Marketing Principles and Practices
Lecture 2 – Customer focus:
The psychology of buyer behaviour

Slide: 2
Lecture 2 - Aims and Objectives
Aims:
Outline theory and methods used in understanding consumer and
organizational buyer behaviour
Provide an understanding of links between decision making and
buying decisions
Objectives
Assess the usefulness of theory and methods in understanding
purchasing behaviour
Outline characteristics and dimensions of organizational purchasing
processes
Identify some choice criteria and personal/social influences on buyer
behaviour

Slide: 3
Why do you buy what you buy?
Think for a moment about your most recent purchases:
 What influenced you?
 Why that item?
 Did you feel it reflected on you as a person?
 Would it make your friends or family happy/jealous?
 What did the marketing people do to influence you?
 Might there be other things that they did that you are not aware of?

Slide: 4
2D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Marketing Concept
The achievement of corporate
goals through meeting and
exceeding customer needs
better than the competition
The Marketing Concept
Customer orientation
Corporate activities are
focused upon providing
customer satisfaction
Integrated effort
All staff accept the
responsibility for creating
Goal achievement
The belief that corporate
goals can be achieved
through customer
satisfaction
Marketing concept
The achievement of corporate
goals through meeting and
exceeding customer needs
better than the competition
Customer
orientation
Corporate activities
are focused upon
providing customer
satisfaction
Integrated
effort
All staff accept the
responsibility for
creating customer
satisfaction
Goal
achievement
The belief that
corporate goals can
be achieved through

Slide: 5
Understanding customers
How do
they buy?
What are
their choice
criteria?
Customers
Who is
important?
Where do
they buy?
When do
they buy?

Slide: 6
Why is it important to understand customers?
 Fundamental marketing decision – choice of customer.
 Vital to enable segmentation, positioning and targeting.
 Informs priorities for product design, distribution, support.
 Even in mass marketing, important for targeting and
communications.
 Remember may be different people involved in a purchase.

Slide: 7
Figure 3.1 Brassington Consumer Buying
Decision-Making Process
Situational
influences
Individual
influences
Group
influences Marketing mix
Decision-making
process

Slide: 8
Alternative views on Influences
on consumer purchasing behaviour
 information
processing
 motivation
 beliefs and
attitudes
 personality
 lifestyle
 lifecycle
 culture
 social class
 geodemo-
graphics
 reference
groups
Personal
influences Social
influences
Consumer
The buying
situation

Slide: 9
The Consumer Decision-Making Process
Need
recognition/problem
awareness
D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill 9
Information
search
Evaluation
Of alternatives
Purchase
Post-purchase
evaluation of
alternatives
Relative Importance?
Need inhibitors?
Stimulation?
Internal, external,
Awareness Set
Impact Internet
Evoked Set
Level of Involvement?
Context, situation,
Ease,
Cognitive Dissonance,
Confirmation Seeking
Remorse? Disposal?
Issues:
Rational?
Simplistic?
How determine?

Slide: 10
Information Search
 What kind of purchase
will address problem?
 How can the product be
obtained?
 What information is
needed?
Source: C&G http://www.cheltglos.co.uk

Slide: 11
Information Evaluation
Information Evaluation involves a process of
narrowing down a wide list of potential options to
an evoked set, typically by constructing
performance criteria with which to judge choices.
Think about how you gather and evaluate
information
– does it vary by type of product, price,
situation?

Slide: 12
The Consumer Decision-Making Process
and Level of Purchase Involvement
Stage
Need recognition
Problem awareness
Information
Search
Evaluation of
alternatives
Post-purchase
Evaluation
Minor
Limited
Few alternatives
Considered
Many alternatives
And choice criteria
Extensive
Major personality
important
Low Involvement High Involvement
Limited
evaluation
Extensive
evaluation

Slide: 13
Normative
beliefs
Personal
beliefs
Purchase
intentions
Purchase
Attitudes
Subjective
norms
High involvement: the Fishbein and Ajzen model of reasoned action
TrialAwareness
Repeat
Purchase
Low involvement: the Ehrenberg and Goodhart repeat purchase model
‘Attitude-Behaviour
Problem’
Evaluation and purchase models

Slide: 14
Determinants of the extent of
problem solving
Self-image
Perceived risk
Social factors
Hedonism Differentiation
and number
of alternatives
Level of
involvement
Time
pressure
Extent of
problem
solving

Slide: 15
Other models of buying decision
process:
 Health Model, Stages of Change (DiClemente & Prochaska):
Precontemplation Contemplation Preparation Action Maintenance
 Customer Activity Cycle Model (Vandermerwe)
Plot on cycle
x product
Pre: Deciding what
to do
During: Doing it
process
Post:
Keeping it
going…

Slide: 16
Choice Criteria Used When
Evaluating Alternatives
Technical-
Reliability
Durability
Performance
Style/looks
Comfort
Delivery
Convenience
Taste
Economic-
Price
Value for money
Running costs
Residual value
Life style costs
Social-
Status
Social belonging
Convention
Fashion
Personal-
Self-image
Morals
Emotions

Slide: 17
Review of the
Decision-Making Process
I’m hungry
What’s available?
Cakes or chocolate?
Snickers!
I should’ve had cake.
Problem recognition
Information search
Information evaluation
Decision
Post-purchase evaluation

Slide: 18
Psychological influences
 Information processing
1. Perception – selective attention, selective distortion,
information framing, selective retention.
2. Learning – classical and operant conditioning, shaping, rote
and vicarious learning, reasoning.
 Motivation.
 Beliefs and attitudes.
 Personality.
 Life-style (psychographics) links beliefs, activities, values and
demographics.

Slide: 19
Personality
Personality can play a role
in consumer behaviour,
particularly with high
involvement products (e.g.,
choice of holiday)
Source: © Hayes & Jarvis (Travel) Ltd http://www.hayesandjarvis.co.uk

Slide: 20
Theories of Motivation
Freud:
Hidden Unconscious
Esteem
Social
Safety
Physiological
Self-
Actualization
Dis-satisfiers
Satisfiers
Herzberg:
Issues:
Sample
Method
Empirical
Support?
Maslow

Slide: 21
Attitudes
Cognitive
Conative
(connects
C & A to
Behaviour)
Affective
(emotions)
What, who etc… How do I feel? Why? What shall I do?

Slide: 22
Skoda Responded to
Negative Attitudes

Slide: 23
Social Influences
 Culture – traditions, taboos, values of society
 Social Class – discriminates consumption patterns
 Geodemographics – postcode clustering
 Reference Groups – friends, family, work colleagues, clubs and
societies
 Life-cycle, people behave differently within society if they are
teenagers, grand-parents etc.
Note – no one classification system works across all product fields and
sometimes best to supplement or use a variety.

Slide: 24
Consumer or Organisational Products
Why was the product Purchased ?
 For personal or
household use
 For use in the operation of a
business or organisation.
 To manufacture other products
 For resale to others
ORGANISATIONAL
PRODUCT
CONSUMER
PRODUCT

Slide: 25
B2B Marketing Defined
B2B marketing is the management
process responsible for the facilitation
of exchange between producers of
goods and services and their
organisational customers
(Brassington & Pettit, 2006)

Slide: 26
Characteristics of Organisational Buying
Derived demand Negotiations
Risks
Reciprocal
buying
Nature and size
of customers
Complexity
of buying
Economic
and technical choice
criteria
Buying to
specific
requirements
Organisational
Purchases

Slide: 27
Implications for Marketing
 Sales force skills, team efforts, multi-level negotiation, account
management to develop relationships.
 Risk analysis, withdrawal from bids,
 Increased likelihood of design for specific customers.
 Marketing mix may vary for each party in a DMU
Bear in mind also changing nature of organisations:
 Just-in-Time buying, increased use of technology, growth in
centralised purchasing etc.

Slide: 28
Types of B2B Customers
 Commercial enterprises
 Government bodies
 Institutions

Slide: 29
Figure 4.2 Brassington
A Clothing Manufacturer and its Suppliers
Suppliers of
raw materials
and
components
Suppliers of
manufacturing
equipment
Suppliers
of labour
Suppliers of
other equipment
and supplies
Suppliers of
services
Manufacturer

Slide: 30
Source: © Goodyear Dunlop Tyres Europe
B.V. http://eu.goodyear.com
Derived Demand
Goodyear’s RunOnFlat Tyres are
featured on
BMWs,
Ferraris,
Corvettes,
Maseratis, and
Mercedes

Slide: 31
Joint Demand
Demand for Samsung’s
Solid State Disk (SSD) is
tightly coupled with the
demand for computers
and other devices with
memory chips

Slide: 32
Buyer
Decider
(Decision
Maker)
Gatekeeper
D Jobber, Principles and Practice of Marketing, © 2001 McGraw-Hill
Users
actually use the
product. They may
be the one who initiates
the purchase process
and may develop the
product
specification.
Influencers
supply information
and advice. Outsiders
such as consultants
sometimes perform
the role.
Gatekeepers
control the flow
of information to the
buying centre. Purchasing
department Staff frequently
fill the role but it could be
any member
of the
organisation.
Buyers
choose suppliers
and negotiate purchase
terms often reducing
the actual purchase
to a clerical task.
Deciders
(Decision Makers)
have the authority
to approve
the purchase.
Deciders
(Decision Makers)
have the authority
to approve
the purchase.
The Buying Centre – DMU’s

Slide: 33
Roles in the Buying Process
 Purchasing - handle relationships with suppliers
 Production/operations - meeting targets for the end product in both
quantity and quality terms
 Engineering - the specification and design
 Research and Development (R&D) – look for new solutions to
problems
 Finance - devolve budgets to appropriate managers
 Marketing - outputs of the production process

Slide: 34
Government/Institutional market
Schools, hospitals, prisons etc.
Tensions include
Cost vs. quality
Low Budget
Complex Buy Processes
Captive
Clientele
Continual Change and
public scrutiny

Slide: 35
Recognition of a problem (need)
Determination of specification and quantity of needed item
Search for and qualification of potential sources
Acquisition and analysis of proposals
Evaluation of proposals and selection of supplier(s)
Selection of an order routine
Performance feedback and evaluation
Buy phases: the organizational
decision-making process

Slide: 36
Major influences on buying behaviour
Environmental:
Demand
Economic outlook
Interest rates
Rate of Tech
change
Political
Competitive
Developments
Social
Responsibility
Organizational:
Objectives
Policies
Procedures
Structures
Systems
Politics
Interpersonal:
Interests
Authority
Status
Empathy
Persuasiveness
Nationality
Individual:
Age
Income
Education
Position
Personality
Risk attitudes
Plus Types of Purchasing
process – routine, strategic
etc.
Note similarities here to
consumer behaviour

Slide: 37
Management styles in the European
Community, US and Japan
Group
Individual
Leadership
Organic Systematic
Organisation
Source: Mole, J. (1990) Mind Your Manners
Italy
Portugal
Greece
Netherlands
Spain France
Germany
USA
Ireland
Belgium
Luxembourg
DenmarkUK

Slide: 38
Building Organizational Relationships
Customer
Services:
Technical, expertise,
resource, etc.
Past, Present,
Future -
Expectation
Management
Competitive
Awareness:
Setting
requirements
Planning and
Strategic
moves
Account
Management:
Understanding and
developing DMU
Consider also stages of relationships

Slide: 39
Psychology of Organizational Relationships
Individual personality,
role set, motivation,
cognition, learning,
decision making
Emotions
Group:
Contagion,
Conformity,
Polarization
Conflict
Inter-personal:
interactions, tactics,
Exchange/equity,
influence processes
Trust
Societal:
Culture, norms,
Stereotyping,
Prejudice…
Discourses
Stories

Slide: 40
Ethical considerations may overlap both types –
consumer and industrial
 Issues with targeting vulnerable groups
 Manipulation
 Intrusive selling or direct marketing
 Deception by salespeople or Account Managers
 Hard selling
 Bribery
 Confidentiality

Slide: 41
Evaluating usefulness of theories
(must do in essay to gain good marks)
 Applicability will vary by product/service type.
 Should be aware of weaknesses of each form of categorisation and
main theories.
 Often descriptive or prescriptive, always consider variety in
cases/processes.
 Often based on small samples and limited timescales.
 However – most are useful tools to help you think through the
customer experience and requirements, and design your marketing
mix in the most appropriate manner.

Slide: 42
Aims and Objectives Achieved?
Aims:
 Outline theory and methods used in understanding consumer and
organizational buyer behaviour
 Provide an understanding of links between decision making and buying
decisions
Objectives
 Assess the usefulness of theory and methods in understanding
purchasing behaviour
 Outline characteristics and dimensions of organizational purchasing
processes
 Identify some choice criteria and personal/social influences on buyer
behaviour

Focus on customers the psychology of buying behaviour

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (20)

Similar to Focus on customers the psychology of buying behaviour

Similar to Focus on customers the psychology of buying behaviour (20)

More from 1STOUTSOURCE LTD

More from 1STOUTSOURCE LTD (12)

Recently uploaded

Recently uploaded (20)

Focus on customers the psychology of buying behaviour

Editor's Notes