Consumer Buying Behaviour & Organisational Markets and Buying Behaviour.

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Semesterarbeit SS 1999

Fach: Englisch

Ingo Lichtmaneker

Internationale Betriebswirtschaft I5

Thema:

CONSUMER BUYING BEHAVIOUR

&

ORGANISATIONAL MARKETS AND BUYING BEHAVIOUR

CONSUMER BUYING BEHAVIOUR 3

.1 Introduction 3

.2 Types of Consumer Buying Behaviour 3

.3 The Consumer Buying Decision Process 4

.4 Personal factors influencing the buying decision process 5

.5 Psychological factors influencing the buying decision process 6

.6 Social factors influencing the buying decision process 7

.7 Understanding consumer behaviour 8

2 ORGANISATIONAL MARKETS AND BUYING BEHAVIOUR 8

2.1 Introduction 8

2.2 Types of organisational markets 8

2.3 Dimensions of organisational buying 10

2.4 Organisational buying decision 13

2.5 Concluding remark 14

CONSUMER BUYING BEHAVIOUR

.1 Introduction

What do we mean if we are talking about consumer buying behaviour?

There are several decision processes and acts of people (consumers) buying and using products for themselves or their household. These processes might be very interesting for companies and their marketing managers.

But what are the reasons why marketers should know about consumer buying behaviour?

-Well, there are several reasons:

* At first it is important to know about the reaction of the buyer to the firm´s marketing strategy because this has a great influence on the firm´s success.

* Another thing is that the firm can create an almost perfect marketing mix to satisfy the customer.

* The third reason is that it´s much easier for the marketers, if they know about the buying behaviours, to predict the reaction of consumers on marketing strategies.

On the following pages I want to give a short overview about "Consumer Buying Behaviour" and "Organisational Markets and Buying Behaviour".

.2 Types of Consumer Buying Behaviour

Consumers always want to create an assortment of products which satisfies their needs and wants in the present and also in the future. To realise this aim, the consumer has to make a lot of decisions. These purchasing decisions can be classified into three main categories of decisions:

* Routine Response Behaviour

This behaviour happens when the consumer regularly buys cheap products that need very little search and also very little decision effort. In this case the consumer prefers a special brand but he also knows other brands of the same product class to have an alternative to buy if there is something wrong with his favourite brand.

* Limited Decision Making

This is the case if the consumer buys a product occasionally or if there is a new brand, he doesn´t know about, in a familiar product category.

For this type of decision-making, the consumer needs a moderate amount of time for gathering information and deliberation.

*

Extensive Decision-Making

This is the most complex decision-making behaviour. It happens when a purchase includes unfamiliar, expensive or infrequently bought products; for example cars, houses etc.

The buyer uses a lot of time for evaluating alternative brands or choices and also for seeking information.

A big contrast to the extensive decision-making processes that were mentioned earlier is the behaviour of the impulse buyers. These people do not plan conscious to buy, they have a persistant urge to buy something immediately if they like it. But often these people get in emotional conflicts, they often feel guilty because of their limited finances or something else.

.3 The Consumer Buying Decision Process

As I mentioned earlier, the decision process is a major part of buying behaviour. This decision process can be divided into five stages:

* Problem Recognition

This occurs when the buyer notices that there is a difference between the desired state and the actual conditions. The consumer gets aware that he has to change something to get satisfied.

For example, if somebody needs a car to get to work and one day the car stops working. In this situation the person recognises that there is a difference between the desired state (a working car) and the actual condition (a broken car).

* Information Search

After recognising the problem, the buyer searches for information about a new product which can solve his problem and also is able to satisfy his need (this is only the case if the decision process continues). For example, the above-mentioned car owner, after recognising the need for a new car, he may search for information about different brands and types of cars.

Here we distinguish two aspects to an information search:

> In the internal search, buyers check first if they have any information about the

needed product in their memory.

> If they cannot get enough information from their memory for a decision, they are looking for more information in an external search. In the external search the buyer may focus on communication with friends or relatives, to hear about their experiences with special brands. He also can obtain information from public sources like manufacturers, salespersons or product-test organisations.

* Evaluation of Alternatives

To evaluate the products of which the buyer got information he is looking for criteria to compare the products. These criteria are for example characteristics or features that the buyer wants (or does not want). In the example of our car buyer these features could be if the car has an airbag, electrical window control or air-conditioning system.

The buyer also thinks about how important each criterion is; because some features may carry more weight than others.

This evaluation of the consumer can be influenced by the marketer by framing the alternatives - that means the manner how the marketer describes the product and its features.

* Purchase

In this stage the consumer chooses the product or brand which he wants to buy. This selection is based on the result of the previous evaluation stage. There is also a set of criterions which must be taken into account:
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One of the most important criterions is the product availability which may influence which brand is purchased. If the favourite brand is not available at the moment the consumer may choose the brand that is ranked second.

Other criterions that also could be important for the consumer are for example the price, delivery, guarantees, maintenance agreements, installation and credit arrangements.

* Post purchase evaluation

After the purchase the buyer begins to check the product if the actual performance meets the expected level. In this stage many of the criteria used in the evaluating alternatives stage ...

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