CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTLecture2:BuyerBehaviourinConsumerandOrganisationalMarketsLectureObjectivesBuyerBehaviourConsumerDecisionMakingProcessCharacteristicsofOrganisationalBuyingCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENT2UnderstandingcustomersHowdotheybuy?Whataretheirchoicecriteria?CustomersWhoisimportant?Wheredotheybuy?Whendotheybuy?CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTTheConsumerDecision-MakingProcessNeedrecognition/problemawareness9InformationsearchEvaluationOfalternativesPurchasePost-purchaseevaluationofalternativesCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTChoiceCriteriaUsedWhenEvaluatingAlternatives5Technical-ReliabilityDurabilityPerformanceStyle/looksComfortDeliveryConvenienceTasteEconomic-PriceValueformoneyRunningcostsResidualvalueLifestylecostsSocial-StatusSocialbelongingConventionFashionPersonal-Self-imageMoralsEmotionsCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENT8DeterminantsoftheextentofproblemsolvingSelf-imagePerceivedriskSocialfactorsHedonismDifferentiationandnumberofalternativesLevelofinvolvementTimepressureExtentofproblemsolvingCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTTheconsumerdecision-makingprocessandlevelofpurchaseinvolvement10StageLowInvolvementHighInvolvementNeedrecognitionproblemawarenessMinorMajorpersonalityimportantInformationsearchLimitedsearchExtensivesearchEvaluationofalternativesandthepurchaseFewalternativesevaluatedonfewchoicecriteriaManyalternativesevaluatedonmanychoicecriteriaPost-purchaseevaluationofthedecisionLimitedevaluationmediasearchExtensiveevaluationincludingmediasearchCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTSonyTheimportanceofemotionandtherelationshipbetweenfeelingsandrationalisationsishighlightedinthisSonyad.4CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTOrangeMarketersusecolourtoconveymeaninginthisadvertisement11CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENT12FordKaMarketersusecolourtoconveymeaninginthisadvertise-mentCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTConsumerorOrganisationalProductsWhywastheproductPurchased?ForpersonalorhouseholduseForuseintheoperationofabusinessororganisation.TomanufactureotherproductsForresaletoothersORGANISATIONALPRODUCTCONSUMERPRODUCT2CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTSomeExamplesofOrganisationalBuyingPapercupsbyMcDonald'sComputerchipsbyToshibaConcretebyLocalAuthoritiesOilbyElectricityGeneratorsFertiliserbyFarmersAccountancyservicesbyLtd..CompaniesTV’sbyCometorDixons3CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENT4CharacteristicsofOrganisationalBuyingDeriveddemandNegotiationsRisksReciprocalbuyingNatureandsizeofcustomersComplexityofbuyingEconomicandtechnicalchoicecriteriaBuyingtospecificrequirementsOrganisationalPurchasesCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTTheBuyingCentreBuyerDecider(DecisionMaker)UserGatekeeperInfluencer5Usersactuallyusetheproduct.Theymaybetheonewhoinitiatesthepurchaseprocessandmaydeveloptheproductspecification.Influencerssupplyinformationandadvice.Outsiderssuchasconsultantssometimesperformtherole.Gatekeeperscontroltheflowofinformationtothebuyingcentre.PurchasingdepartmentStafffrequentlyfilltherolebutitcouldbeanymemberoftheorganisation.Buyerschoosesuppliersandnegotiatepurchasetermsoftenreducingtheactualpurchasetoaclericaltask.Deciders(DecisionMakers)havetheauthoritytoapprovethepurchase.CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENT6Buyphases:theorganizationaldecision-makingprocessRecognitionofaproblem(need)DeterminationofspecificationandquantityofneededitemSearchforandqualificationofpotentialsourcesAcquisitionandanalysisofproposalsEvaluationofproposalsandselectionofsupplier(s)SelectionofanorderroutinePerformancefeedbackandevaluationCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENT8VodaphoneVodaphonerecognisetheimportanceofeconomicchoicecriteriainorganisationalbuyingCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENT9Influencesonorganizationalpurchasingbehaviourstraightre-buymodifiedre-buynewtaskBuyclassOrganizationalbuyerproductconstituentsproductfacilitiesMROsProducttypeImportanceofpurchaseCHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTNewTaskBuyingTheorganisationmakesaninitialpurchaseofanitemtobeusedtoperformanewjobortosolveanewproblem.Oftenthisinvolvesdevelopmentofspecificationsforproductsandsuppliersaswellasproceduresforfuturepurchases.Highinformationrequirementfrommanysuppliers.Example:newITfacility11CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTModifiedRebuyWhenanewtaskpurchaseischangedonrepeatpurchases.Thebuyermayrequirefasterdeliverylowerpricesormodifiedspecifications.Regularsuppliersbecomemorecompetitiveandnewsuppliersmaybeincludedintheselection.Moderateamountsofinformationarerequired.Example:upgradingofficesoftware12CHANAKAJAYAWARDHENABSP022MARKETINGMANAGEMENTStraightRebuyThebuyerpurchasesthesameproductsagainroutinelyunderapproximatelythesametermsofsale.Suppliersarefamiliar,haveprovidedsatisfactoryserviceinthepastandmayevenhavesetupautomaticre-orderingsystems.Littleinformationisrequired.Example:re-orderingphotocopyingpaper13CHANAKAJAYAWARDHENABSP022MARKETINGMAN