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Major Factors Influencing Buying Behavior
Culture
Culture
Subculture
Social class

Social
reference grp
family
role and status
Major Factors Influencing Buying Behavior
Personal
Age and life cycle
Occupation
Economic circumstances
Life style
Personality and Self concepts

Psychological
motivation
perception
Learning
beliefs & attitude
THE BUYING ROLES
•
•
•
•
•

Initiator
Influencer
Decider
Buyer
User
• One person may assume multiple roles in the
decision making process
• Roles differ according to the product type being
bought
• As roles change within households, so do
purchasing activities
• High involvement products usually involve more
people in the decision making process
• Expert influence and emotional influences are
used by members to sway other members
Buying Behavior
1. Complex Buying Behavior: when they are
highly involved in purchase, aware of
differences among brands. E.g. cars product
inculdes risk and is of self expressive nature.
2. Dissonance Reducing Behavior: Highly
involved in purchase, but sees little difference
in brands. Purchase is expensive, infrequent,
risky but still buys quickly. E.g. gold.
Buying Behavior
3. Habitual Buying: Low consumer involvement
and absence of significant brand difference.
E.g. salt
4. Variety seeking: Low consumer involvement
but significant brand difference. E.g. choclates,
cold drinks.
THE BUYING PROCESS
• Problem recognition
Magnitude of discrepancy between desired and
present situation
Relative importance of the problem

Need inhibitors have to be overcome
The Buying Process (Contd.)

• Information search
Consumer first conducts an internal search
If internal search is insufficient, the
consumer goes in for external search
Third party reports provide unbiased
information
Personal experience with the product
unsubstitutable
Objective of information search to build up
awareness set
Advertising stimulates information search
The Buying Process (Contd.)

• Evaluation of alternatives and purchase
Formation of evolved set or the consideration
set
Consumers use various types of rules to arrive
at consideration set
Involvement: Degree of perceived relevance
and personal importance for particular
purchase decision
Differences in low and high involvement
decision making
The Buying Process (Contd.)

• Purchase and Post purchase evaluation of
decision
Place and mode of purchase
Payment terms and conditions
Delivery of the product
Installment
Training for usage of the product
PERSONAL INFLUENCES
• Perception
Selective attention
Selective distortion
Selective retention

• Learning
Classical conditioning
Operant conditioning
Cognitive learning
Modeling/Vicarious learning
Reasoning
Personal Influences (Contd.)

• Motivation
Maslow’s theory of motivation

• Belief and attitude
• Personality
• Lifestyle
• Life cycle
SOCIAL INFLUENCES
• Culture

• Social class
• Reference groups
CUSTOMER LOYALTY AND PROFITABILITY
• Loyal customers not necessarily cheaper to
serve
• Long-term customers consistently pay less
than the newer customers do
• Customers who feel and talk positively about
a company more likely to sell others on the
company
• Scrutinize customer transaction data carefully
in terms of profits they generate
Customer Loyalty And Profitability (Contd.)

• Categorize customers and treat them
differently
• Finding ways to engender positive feelings
about the company among loyal, satisfied
customers
• Very difficult to convert profitable but
transient customers into loyal ones by
spending on them
• Customers whose size and volume of
transactions are low can be of various types
CUSTOMER PORTFOLIO
MANAGEMENT
EMOTIONAL ENGAGEMENT WITH
CUSTOMERS
• Important to show that the company cares
about loyal customers
• Treat customers with dignity especially when
they are faltering on some of their
commitments
• Subtle way to earn loyalty is to show that the
company trusts its customers
CUSTOMER RELATIONSHIP
MANAGEMENT
• Create a customer strategy before
implementing CRM
• Before CRM technology is installed, a customerfocused organization has to be created
• Objectives of CRM can be fulfilled without
installing a high-tech solution
• Wrong to try to build relationships with all the
existing and potential customers
RELATIONSHIP MARKETING
•
•
•
•

Identifying the customers
Differentiating the customers
Interacting with customers
Customizing the company’s behavior
Organizational Buying
It is the decision making process by which formal
organization establishes a need for the product
or service, then identify, evaluated and select
among alternative brand or supplier.
Characteristics of Business Market
1. Fewer Buyer
2. Large Quantity Buyer
3. Close supplier and customer relationship
4. Geographically close buyers
5. Derived Demand
6. Inelastic demand
7. Professional purchasing
8. Direct purchasing
9. Reciprocity
10.Leasing
Buying Situation
1. Straight rebuy
2. Modifed rebuy
3. New task
Buying Roles
1.
2.
3.
4.
5.
6.
7.

Initiator
User
Influencer
Decider
Approvers
Buyer
Gate keeper
Purchasing Process
1.
2.
3.
4.
5.
6.
7.
8.
9.

Problem recognition
Need description
Product specification
Supplier search
Supplier invitation
Supplier selection
Negotiation
Order
Performance review
Factors influencing buying
Environmental
1. Demand
2. Interest rate
3. Rate of technology
4. Political and regulatory development
5. Social responsibility
Factors influencing buying
Organizational
1. Objectives
2. Policies
3. Procedures
4. Structure
5. system
Factors influencing buying
interpersonal
1. Interest
2. Authority
3. Status
4. Empathy
5. Persuasiveness
Factors influencing buying
Individual
1. Age
2. Income
3. Education
4. Personality
5. Risk attitude
6. Culture
7. Job Position
Factors influencing buying
Environmental
1. Demand
2. Interest rate
3. Rate of technology
4. Political and regulatory development
5. Social responsibility
Factors influencing buying
Environmental
1. Demand
2. Interest rate
3. Rate of technology
4. Political and regulatory development
5. Social responsibility
Consumer behavior
Consumer behavior
Consumer behavior

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Consumer behavior

  • 1. Major Factors Influencing Buying Behavior Culture Culture Subculture Social class Social reference grp family role and status
  • 2. Major Factors Influencing Buying Behavior Personal Age and life cycle Occupation Economic circumstances Life style Personality and Self concepts Psychological motivation perception Learning beliefs & attitude
  • 4. • One person may assume multiple roles in the decision making process • Roles differ according to the product type being bought • As roles change within households, so do purchasing activities • High involvement products usually involve more people in the decision making process • Expert influence and emotional influences are used by members to sway other members
  • 5. Buying Behavior 1. Complex Buying Behavior: when they are highly involved in purchase, aware of differences among brands. E.g. cars product inculdes risk and is of self expressive nature. 2. Dissonance Reducing Behavior: Highly involved in purchase, but sees little difference in brands. Purchase is expensive, infrequent, risky but still buys quickly. E.g. gold.
  • 6. Buying Behavior 3. Habitual Buying: Low consumer involvement and absence of significant brand difference. E.g. salt 4. Variety seeking: Low consumer involvement but significant brand difference. E.g. choclates, cold drinks.
  • 7. THE BUYING PROCESS • Problem recognition Magnitude of discrepancy between desired and present situation Relative importance of the problem Need inhibitors have to be overcome
  • 8. The Buying Process (Contd.) • Information search Consumer first conducts an internal search If internal search is insufficient, the consumer goes in for external search Third party reports provide unbiased information Personal experience with the product unsubstitutable Objective of information search to build up awareness set Advertising stimulates information search
  • 9. The Buying Process (Contd.) • Evaluation of alternatives and purchase Formation of evolved set or the consideration set Consumers use various types of rules to arrive at consideration set Involvement: Degree of perceived relevance and personal importance for particular purchase decision Differences in low and high involvement decision making
  • 10. The Buying Process (Contd.) • Purchase and Post purchase evaluation of decision Place and mode of purchase Payment terms and conditions Delivery of the product Installment Training for usage of the product
  • 11. PERSONAL INFLUENCES • Perception Selective attention Selective distortion Selective retention • Learning Classical conditioning Operant conditioning Cognitive learning Modeling/Vicarious learning Reasoning
  • 12. Personal Influences (Contd.) • Motivation Maslow’s theory of motivation • Belief and attitude • Personality • Lifestyle • Life cycle
  • 13. SOCIAL INFLUENCES • Culture • Social class • Reference groups
  • 14. CUSTOMER LOYALTY AND PROFITABILITY • Loyal customers not necessarily cheaper to serve • Long-term customers consistently pay less than the newer customers do • Customers who feel and talk positively about a company more likely to sell others on the company • Scrutinize customer transaction data carefully in terms of profits they generate
  • 15. Customer Loyalty And Profitability (Contd.) • Categorize customers and treat them differently • Finding ways to engender positive feelings about the company among loyal, satisfied customers • Very difficult to convert profitable but transient customers into loyal ones by spending on them • Customers whose size and volume of transactions are low can be of various types
  • 17. EMOTIONAL ENGAGEMENT WITH CUSTOMERS • Important to show that the company cares about loyal customers • Treat customers with dignity especially when they are faltering on some of their commitments • Subtle way to earn loyalty is to show that the company trusts its customers
  • 18. CUSTOMER RELATIONSHIP MANAGEMENT • Create a customer strategy before implementing CRM • Before CRM technology is installed, a customerfocused organization has to be created • Objectives of CRM can be fulfilled without installing a high-tech solution • Wrong to try to build relationships with all the existing and potential customers
  • 19. RELATIONSHIP MARKETING • • • • Identifying the customers Differentiating the customers Interacting with customers Customizing the company’s behavior
  • 20. Organizational Buying It is the decision making process by which formal organization establishes a need for the product or service, then identify, evaluated and select among alternative brand or supplier.
  • 21. Characteristics of Business Market 1. Fewer Buyer 2. Large Quantity Buyer 3. Close supplier and customer relationship 4. Geographically close buyers 5. Derived Demand 6. Inelastic demand 7. Professional purchasing 8. Direct purchasing 9. Reciprocity 10.Leasing
  • 22. Buying Situation 1. Straight rebuy 2. Modifed rebuy 3. New task
  • 24. Purchasing Process 1. 2. 3. 4. 5. 6. 7. 8. 9. Problem recognition Need description Product specification Supplier search Supplier invitation Supplier selection Negotiation Order Performance review
  • 25. Factors influencing buying Environmental 1. Demand 2. Interest rate 3. Rate of technology 4. Political and regulatory development 5. Social responsibility
  • 26. Factors influencing buying Organizational 1. Objectives 2. Policies 3. Procedures 4. Structure 5. system
  • 27. Factors influencing buying interpersonal 1. Interest 2. Authority 3. Status 4. Empathy 5. Persuasiveness
  • 28. Factors influencing buying Individual 1. Age 2. Income 3. Education 4. Personality 5. Risk attitude 6. Culture 7. Job Position
  • 29. Factors influencing buying Environmental 1. Demand 2. Interest rate 3. Rate of technology 4. Political and regulatory development 5. Social responsibility
  • 30. Factors influencing buying Environmental 1. Demand 2. Interest rate 3. Rate of technology 4. Political and regulatory development 5. Social responsibility