BBMK2103: PRINCIPLES OF

MARKETING
TOPIC5-CONSUMER BEHAVIOUR & B2B
MARKETING

PREPARED BY: NOR LINDA BINTI MOKHTAR

 INTRODUCTION

 As individual consumers, we are always involved in the buying decision-

making process and the purchase of products or services.
 The interesting fact is that there are differences, significant or insignificant,
among consumers in terms of their purchasing behavior.
 Marketers are attracted to end consumers behavior in their buying decision
making, buying and post-purchase behavior.
 INFLUENCING FACTORS

 An individual will be influenced by several factors in buying decision.

 The influencing factors build the internal traits of the consumer.
 Consumers purchase is very much influenced by cultural, social, personality and
psychological aspects.
 The impacts of these factors on consumers are broad and profound.
 Cultural
 The cultural aspect consists of the institution or other influences that affect the basic value, perception, priority and behaviour in a
community.
 An individual raised in a cluster of community will develop his values and beliefs based on the norms of the community.
 The community has its own beliefs about the relationship among the members of the community and the members of another community.
 The cultural aspect can be divided into sub-cultures which provide detailed identification that processes the socialisation of their members.
 Example: generally Malays have the same taste for food, but there exist various sub cultures where northern Malays prefer to eat curries
while southern Malays prefer the asam pedas style of cooking.
 Another criterion that exists in the cultural aspect is social class or stratification of community members based on community priority.
 Among the frequently used basis to build social class are:
(a) Occupation;
(b) Education level;
(c) Location of stay; and
(d) Wealth.
 Social class affects individuals and often the individuals will behave the same way as the other members of their social class.
 Example: members from the upper social class prefer to shop at places that reflect their social class status and position.
 An individual from the lower class will shop in areas or stores frequented by the same social class.
 Social

 Consumers are also influenced by social factors which consist of reference group, family, their roles and status.
 A reference group is a group that influences the behaviour or attitude of consumers directly or indirectly.
 Direct influence comes from the primary group such as the family, friends and neighbours, while the secondary group consists of groups such
as professional or religious groups.
 Consumers interact at the highest level and informally in the primary group.
 The interaction level in the secondary group is average and in a more formal way.
 The primary and secondary groups are also known as membership group.
 The influences of the group can be seen in three ways, which are behaviour or lifestyle, attitude, self-concept and the selection of products
and brands.
 There are also indirect influences from the groups outside the membership group.
 Indirect positive influences are called aspiration group, while negative influences that should be avoided from the outside group is called the
dissociative group.
 In the concept of the consumer can be part of the group, while in the non-membership group, the consumer may not be
part of the group.
 Personal

 The personality influencing factors can be detailed into several aspects which are:

Age and Stage of •This plays an important role to the consumers and their family as the product types and services they buy will change
according to age and the level of the family in the life cycle.
Life Cycle of a •For single or unmarried consumers, the purchasing pattern will be influenced by their age group and their single status.
•This is different with consumers who have a family and a small child, where the purchasing pattern will be more focused to
Family the needs of the small family they are building.

•Occupation influences consumers purchases.

•Generally, the needs of a white-collared worker is different from those of a blue-collared worker.

Occupation •A white-collared worker will buy shirts and neck ties because these are an occupational requirement while a blue-collared worker will buy clothes and
shoes that are durable and suitable for his occupation.
•This is not only limited to clothes.
•A lot of products are related to work, such as recreation sports and types of transportation.

• A consumers rising economic status will enhance his purchasing power.

• Consumers who have a stable economic status are able to buy the best products in the product categories that
Economical Status they purchase from.
• Example: a consumer may buy a BMW car to match his purchasing power.
 • Consumers from the same cultural group do not necessarily have the same lifestyle.
• Lifestyle is defined as the life pattern of an individual reflected through activities, interests and opinions.
• Activities include occupation, hobbies, shopping, sports and social ceremonies.
Lifestyle • Interests refer to food, fashion, family and recreation.
• Opinions refer to personal issues, social issues, businesses and products.
• Understanding consumers lifestyle can help marketers to understand the changes that happen to consumers
and their behaviour.

• Personality is useful in studying consumer behaviour towards a product or brand.

• Personality refers to defined psychological traits that give constant and continuous response.
• It is usually connected to self-confidence and traits such as socialisation, aggressiveness, dominance, autonomy
Personality and defensiveness.
• Example: Ali sees himself as adventurous, active and loving challenges. Therefore, he prefers a four-wheel-drive
vehicle as it portrays similar traits.

•Self-concept is closely related to personality.

•Self-concept or self-image is how a person sees himself and makes a statement about his
Self-concept image or identity to the public.
•To understand consumer behaviour, marketers need to understand the relationship between
consumers self-concept and their possessions.
 Psychological
 Psychological factors are the most basic in an individual.
 The selection of a product or service by a consumer is influenced by these psychological
elements:

Motivation

•Motivation is a biological or psychogenic need, which is the

condition that exists from a strained psychological state,
such as the need to be acknowledged or loved.
•As a result, a motive is born from the stimulation that drives a
person to act.
Maslow’s Hierarchy of Needs Theory
Perception

•A motivated consumer is ready to act.

•However, this action depends on the consumers perception of a situation.
•Perception is a process of selection, arrangement and information input elaboration to create meaning about the
world.
•In the process, the individual will perform three other sub-processes: focused selection, distorted selection and
selection preservation.
•Each sub-process causes perceptions to be formed in an individual which are different from those in another
individual.
•Example: consumers buy local products because they believe these are also high in quality or avoid buying local
products because they believe the quality is very low.

Learning

•Learning involves changes in the behaviour of an individual from experience as when a person acts, he will learn.
•Learning is a combination of pressure, stimulation, indication, reaction and enforcement.
•Pressure is a major stimulation that will cause actions, while indication is a minor stimulation that causes when,
where and how a person acts.
•Learning can cause a person to similarise or isolate a product with other products.
•Similarisation happens when obligation and indications from various products is similar and causes similar
enforcement.
•Isolation happens when the products obligation and indications are different, causing the consumers to
differentiate a product with another.
Belief

• Belief refers to a persons descriptive thought about something that may be formed based on
education, opinion or principles.
• The belief may be formed based on emotional trait or otherwise.
• Beliefs that are formed in the mind result in an image of a product in the consumers mind.

Attitude

• Attitude refers to evaluation, emotion and reaction continuously towards an object or idea in
a good way or the opposite.
• The consumers behave towards many matters in their life such as religion, politic and food.
• Attitude causes the consumers to have a mind that is formed based on their preferences or
non-preferences on a matter.
• An attitude is difficult to change and requires modification to the attitude.
• It is better for the marketers to modify their product to match the attitude rather than change
the consumers attitude.
 BUYING ROLES

 It is important for us to learn the role played by every individual in the buying decision-
making process.
 There are five roles to be played in a buying process.
 An individual may play more than one role or a role may be played by more than an
individual.
 This depends on the membership of the decision to be made.
Nominator
• The nominator is the person who comes up with the idea to buy a product or a service.

Influencer
• Influencer refers to individuals who have influence on the decision to be made.
• The influence may have been in the form of channelling or blocking information from
reaching the members in the buying centre.

Decision maker
• Decision maker refers to individuals who make the decision in the factors of what, when and
how much will be bought and the related questions.

Buyer
• Buyer refers to the person who will conduct the buying of the real product.

Consumer
• Consumer refers to the person who actually uses the product.
 BUYING BEHAVIOUR

 A consumer buying decision usually depends on the type of the purchase made.
 The decision to buy a product that is frequently bought is different from the decision that
involves expensive and rarely bought products.
 In relation to that, the consumers will exhibit different buying behaviour.
 The buying behaviours include:
Complex Buying Dissonant Buying Regular Buying Behaviour Variety Buying Behaviour
Behaviour Behaviour • Refers to the situations where the • Refers to the situation where
• Refers to the situation where the • This refers to buys that involve consumer does not search more there are obvious differences
consumers have many options. products without any obvious information before buying as the between the brands and
advantages or disadvantages. consumer feels that the existing products but does not require a
• Every option furthermore has its
information from the experience lot of involvement from the
own advantages and • This consumer behaviour also
of using the product is sufficient. consumers.
disadvantages. involves a higher cost of
investment, rarely bought • The difference between one • The consumers may change the
• The differences among the
products or high-risk purchases. product and the other may be brand more often, not because
choices are obvious.
very small and may not be as of dissatisfaction but more to
• Among the criteria that exist in • The consumer may find ways to
important to the consumer. seek for varieties in the products,
the complex buying behaviour lessen his uncertainty by
• Example: buying daily usage such as buying of different
are the higher cost of investment gathering more information
products such as the toothpaste flavours of cakes.
and the searching of more before making the buy and
choosing the product that offers and soap.
information to assist decision
making process. the most guarantee.
• Example: purchase of a house. • Example: the buying of precious
stones.
 STAGES IN BUYING DECISION MAKING

 In the process of decision

making, there are five stages:
 Identifying the Problem

 Basically, a consumer will identify the problem faced when a difference between the expected
situation and the real situation exists.
 The consumer will eliminate or reduce the differences by buying the suitable products or services.
 The need may arise as it was caused by two types of stimulation, which are the internal stimulation
and the external stimulation.
 An advertisement that succeeded to persuade a consumer to buy a product is an example of
external stimulation, whereas internal stimulation comes from the individuals own self.
 Example: a consumers favourite dress has been damaged, causing the individual to seek other
garments to replace it.
 Identifying the need does not necessarily result in a purchase.
 This is because there are other factors that will contribute to the purchase, such as financial situation
and the time available to make the purchase.
 Searching for Information
 Searching the information will be easy if the consumer has experience of using the product, the product does not involve a huge
amount of money or the product is frequently bought such as daily use products.
 Intensive information searching will only happen if more information is required.
 This usually occurs when buying for the first time, the purchase involves a lot of money or when there are many alternative
products in the market.
 Medium information gathering will happen when the product is rarely bought.
 The consumer has some information on the product or service and the purchase requires a medium allocation of money.
 Information can be gathered internally or externally.
 Internal information refers to the collective information gathered through reading or the consumers experience of using the
product.
 This includes the consumers own aspiration, which is by checking and trying the product himself.
 External information refers to information from a close source to the consumer such as family and friends.
 Family and friends experiences and knowledge are great influences on the consumer.
 These are followed by the official sources such as the manufacturers information source through its marketing mix that includes
the product design, product price, place of distribution and the promotional methods.
 Official sources also include articles in the newspapers and advertisement in the print and electronic media.
 Evaluating Alternatives

 Evaluation of alternatives refers to the formation of selection in the consumers mind to assist
them in evaluating the existing alternative brands of the same product category.
 Example: the consumer may feel that his communication problems will be solved by buying
a mobile phone.
 The consumer chooses a product or service among the choices available in the market
based on the information gathered from the process of information searching.
 Through this information gathering, indirectly the consumer has also outlined the criteria that
he requires in buying a mobile phone.
 The criteria will assist him to evaluate and later choose the suitable mobile phone brand
and model of his choice.
 Buying Decision

 The consumer will make a buying decision that includes the time and place
the purchase will be carried out.
 This includes the payment method that will be made.
 All the purchasing factors deemed appropriate by the consumer will decide
the purchase.
 Example: the consumer feels that to make his purchase at a branch that sells
Avon brand is sufficient rather than to go to the headquarters.
 The buyer may also be interested to pay by instalment rather than by cash
as offered by the seller.
 Post-Purchase Behaviour

 After a buy, the consumer will either experience a feeling of satisfaction or dissatisfaction.
 This stage is important as it will influence the process of repurchasing the product.
 If the consumer is satisfied with the purchase and feels that the purchase is right and fulfils his needs and wants, eventually the
consumer will influence other people to buy the product and continue buying it.
 However, if the consumer is dissatisfied with the purchase made, the consumer may not repeat the purchase of the same product.
 Problems will crop up to marketers if the consumer has a feeling of dissatisfaction.
 This feeling causes the consumer to feel that a mistake had been made in the process of buying decision making.
 This condition will affect the process of repurchasing of the product.
 Indirectly, the consumer will relate his feeling of dissatisfaction to other people who wish to buy the product in the future.
 The marketer should take appropriate action to reduce dissatisfied consumers.
 The marketer should convince the consumer that he has made the right choice.
 The marketer may support the consumer by providing more information on the advantages of buying the product, support
services, warranty and trial period.
 This is important as dissatisfied consumers who relate their bad experience to potential customers are bigger in number than
satisfied consumers who relate satisfactory experiences to others.
 DIFFERENCES BETWEEN INDUSTRIAL,
RESELLER AND GOVERNMENT MARKETS

Government
Industrial Markets Reseller Markets
Markets
These organisations buy the The organisation buys the product
products and in some way and then resells it relatively Federal, Provincial and Municipal
reprocess it before reselling it to unchanged. governments purchase products
the next buyer. and services and then use them for
In other words, no reprocessing their constituents.
involved.

Example: Stelco sells rolled steel to For example: The town of Buchans
General Motors (GM), GM stamps it Example: Sobey's will buy milk from buys a new Cat 930 loader.
into a body part for the Venture Central Dairies and then resell it to That machine is fitted with a
mini-van, which is, in turn, sold to customers. snowblade and used to plough the
you through your GM dealer. town's roads (a public service).
 ORGANISATIONAL MARKET PRODUCT

 The product classifications for the use of organisational market are:

Raw and Processed Components and Maintenance, Capital Goods Equipment and
Materials Spare Parts Repairing and •Capital goods refer to the Accessories
•Raw and processed •These refer to the parts that Operational Support important material to •These refer to light
materials refer to natural are used to assemble or manufacturing process. equipment that are cheaper
•These refer to goods that
resources or materials that make other products. support the process of •Example: baking oven to than the main materials and
go through minor •Example: tyres for car manufacturing. make cookies. usually are purchased in a
modification. assembling. •Capital goods also include huge quantity.
•Example: coolant liquid for
•Example: latex milk for steel drilling process. building and factories. •Example: chairs or cabinet
natural raw material or latex files in the office.
sheet for minor modification
process.
 ORGANISATIONAL MARKET SERVICES

 The services used by organisational market are various.

 Example: the cleaning/washing services, maintenance up to the
professional services such as legal or accounting services.
 The system can also be categorised as a service used by the organisational
market.
 Systems that are related with products are the training of product or
machine usage, and training about handling the computer.
 Meanwhile, the services systems are scheduled business audit and data
processing.
 MAIN INFLUENCERS OF
ORGANISATIONAL CONSUMERS’
BEHAVIOUR

 The main influencers of the

organizational consumers behavior
are the environment, organization,
interpersonal and individuals.
 The organizational buying activity is
an official activity.
 It is not conducted the way an
individual conducts it.
 Every organizational purchase has
its justifications as it relates closely
to the organizations operation.
 Environment

 Organizational purchase is very much influenced by environmental factors such as:

(a) Product demand level;
(b) Current economy situation;
(c) Loan rates;
(d) Technology development level;
(e) The country's political development and the governments regulation;
(f) Competition; and
(g) Social responsibility issue.
 The awareness against the environmental factors is important because any changes, whether
positive or negative will have a direct impact to the business.
 The monitoring is also important because the organization does not have direct authority against the
changes in the environmental factors, but still need to act proactively towards any changes.
 Organisation

 Every organisation has objectives, policies, procedures, organisational structures and

systems.
 These factors are known as the organizational factors and they influence an organization
buying behavior through a centralized buying policy or its opposite, contract offering,
purchase through the Internet, buying technology, the roles played by other departments in
the buying function, the increasingly important and more strategic buying function as well
as specialized production.
 All these factors influence the buying process ambience that includes decision making
process and the purchase itself.
 Organizational purchases take a considerably longer time.
 The organizations guideline will always be taken into consideration in each step of the
process.
 Interpersonal

 A buying Centre usually consists of several committee members who exhibit

interest, authority level, empathy and persuasion at different levels.
 It is hard for marketers to identify the inter-personal factors and a dynamic
group involved in a buying process.
 Every committee member has his own influence in deciding the products to
be purchased in the buying Centre.
 Interpersonal influence may be a dominant factor in deciding the list of
products to be bought at the buying Centre.
 Individual

 The individual factor refers to the organization officers who have different
motivation level, perception and priority that differ because of the
influences of age, income level, position, personality, attitude towards risk
and their culture.
 Example: a company with officers from several different countries and the
companies that deal with foreign market have to be aware of the country's
culture if it happens to affect the organizational purchase.
 BUYING SITUATIONS

 The most common buying situations that occur can be categorized into
three:
(a) New task buying;
(b) Modified rebuy; and
(c) Straight rebuy.
 The categorization is based on whether the purchase has been done
before or otherwise.
 It involves the information searching if the product has never been
purchased before and modification must be done to the product
specifications.
New
A new task buying situation involves first time purchase for an organization.
If it involves a high cost or risk, more detailed decision have to be made by the

Task
buying centre.

Buying Generally, organizational purchase does not have sufficient information to make
this kind of decision.
The decision made will include type of product, product brand, technical and general
specification, quantity, supplier, purchase or assembly routine and the purchase evaluation.

In order to obtain sufficient information, a better effort will have to be

made.
Every member at the purchasing Centre will be involved in every step until
the decision is made.
Modified
Modified rebuy refers to a situation where the same product category requires minor modification to be
made to the product specification.
Specification modification is made based on the organizations experience in using the product.
Rebuy This is done at the end of the usage period when the organization feels that they require products with
slightly different specification.

Example: office furniture.

From the organizations experience of using the product, they feel that a few criteria such as the product durability,
a different color, and a combination of steel and wood are better.
These criteria are then outlined in the rebuying of the office furniture and they are known as the product
specification.
The different criteria searched of the specification modification lead to the situation of modified rebuy.

The situation requires medium information collection.

The information has to be collected focusing on the product specification which needed to
be modified.
Perhaps the existing supplier is not able to supply the new required product causing the
information for new suppliers to also be required.
Straight
This situation is the most frequent to occur, especially in ready-to-use product
buying.

Rebuy
If a product stock reaches a minimum level, a straight rebuy will be conducted.
It is called straight rebuy as there is no need for any modification to the product.
Perhaps the organization is satisfied with the previous purchase causing no
specification modification to be done.

In this situation, the extra information required is very minimal and

sometimes not required at all.
Generally, the purchasing officer will immediately order the product when
he needs new stocks.
 THE BUYING PROCESS OF
ORGANISATIONAL MARKET

 Organizational market buying

process can be divided into five
stages, which are:
 First Stage: Identifying Problem

 A problem can be caused by internal or external stimulation.

 Example: an internal stimulation is a situation when the machine needed
to be used broke down and hindered the organizations operation.
 The machines malfunction caused the organization a problem.
 Examples: an external stimulation are technology development and
salesperson persuasion that caused the organization to feel that it needs
to replace the existing machine even though it is not experiencing any
malfunction.
 Second Stage: Identifying Product
Specification

 The next step is to list all the specifications of the product needed.
 If the product is frequently used, maybe some feedback from the product
user may help the organization to identify the specification of the product to
be bought.
 However, in a situation where the product has never been used, the
information will be collected intensively to help identify the specification of
the product to be purchased.
 Third Stage: Listing Suppliers and Making
Offer to Suppliers

 Organizational product market does not have many suppliers as the final
consumer product market as most of the products are sold according to the
customers order.
 Therefore, indirectly the number of the suppliers for the organizational
product is limited but they are the supplier who can prepare products
according to the organizational buyers specification.
 This stage will identify the suppliers who can supply the product according to
the expected specification.
 Organizational consumer usually gives much emphasis on factors like
technical expertise, reputation, after-sales services, location of the supplier,
guaranteed return and price offered by supplier.
 Fourth Stage: Selecting Supplier and
Routine Order Specifications

 In this stage, the supplier selection will be done based on the suppliers
suggestions.
 Organizational consumer can engage only one or a few suppliers for its
order.
 In this stage, organizational consumer will negotiate with supplier regarding
the final order, technical specification, required quality, expected delivery
date, return policy, warranty and so on.
 After a consensus has been reached, the organizational consumer will
generate the routine order specifications.
 Fifth Stage: Post-Purchase Consumer
Behavior

 At this final stage, organizational buyer will experience post-purchase behavior such as
those experienced by the final consumers.
 At this stage, the buyers can make their evaluation of the product through the experience
of using it.
 Generally, the buyers can evaluate whether they have made the best purchase or not.
 Output from this stage will influence the next purchase process.
 Example: if the buyer is satisfied, the buyer will normally purchase the same product in the
following purchase process.
 If the buyer is not satisfied, the specification modification, product class or brand will be
changed in order to ensure that the purchase can give them a satisfactory output.
 MEMBERSHIP IN ORGANISATIONAL
PURCHASING PROCESS

 The decision to make an organizational purchase is made formally by a group of staff that has been appointed to be a member in the buying
Centre.
 Depending on the buying situation, the membership of the buying Centre may consist of two staff up to the maximum of 12 staff.
 However, on the average, it consists of four to five staff.
 Every member in the buying Centre plays his own role as nominator, consumer, influencer, decision maker, approver or information keeper.
 The nominator is the party who voices out the opinion to buy the product, who may be other consumer or other parties in the organization.
 The consumer is the party that will use the product.
 He may or may not be on the same side as the nominator.
 The consumers may be the lower ranked staff, while the nominators are their head of departments.
 The consumers help in defining or describing the needs of the product to be purchased.
 The influencers are the people who have influence on the buying decision.
 They too help define the product specification and provide relevant information to consider product alternatives.
 The technical and engineering staff are usually the influencers.
 The decision maker is the officer who makes the real decision on the need or the supplier selection.
 The approver on the other hand, is the person who gives authority to take action on the suggestion made by the decision maker or the buyer.
 The information keeper is the officer that has the power to prohibit or allow information to reach the buying Centre.