Chapter 5:

CONSUMER AND
BUSINESS BUYING
BEHAVIOR
Objectives:
At the end of the chapter, the learners are able to:
1. Appraise the consumer market;
2. Illustrate the consumer buying process;
3. Characterize the situational influences on consumer behavior;
4. Justify the psychological influences on consumer behavior;
5. Rank the socio-cultural influences on consumer behavior;
6. Validate the personal influences on consumer behavior;
7. Evaluate the economic influences on consumer behavior;
8. Critique the types of business market;
9. Decide on the buying situations in the business market;
10. Internalize the business buying process; and
11. Represent the participants in the business buying process.
THE CONSUMER MARKET
Consumer market refers to the market
where people buy products for personal
use and are not intended for further sale
to other people.
CONSUMER BUYING PROCESS

A consumer buying process is the

sequence of steps that a consumer will need
to undergo in order to arrive at the final
purchasing decision. Typically, consumers
pursue a usual buying process. There are
basically several steps in the standard model
of consumer purchase decision-making.
 Five stages Consumer
Buying Process

1. Problem Recognition

2. Information Search

3. Evaluation of Alternatives

4. Purchase Decision

5. Post-Purchase Evaluation
Problem Recognition
A customer must first have a problem before a purchase
can happen. problem occurs when his desire as a customer is far
from the reality.

This step is also recognized as identification of unmet need.

This unmet need becomes a basis or force of buying behavior.
When the unmet need or problem is identified, the buying
problems crop up. An individual is obliged to buy a product or
service in answer to the need or problem.
 Information Search
• Information can be obtained from:
1.Personal sources - They may be composed of family members, friends,
package, colleagues, and relatives.
2. Commercial sources - Advertising, salesmen, dealers, package, trade
show, display, and exhibition are leading commercial sources.
3. Public sources - Mass media such as radio, TV, newspapers, magazines,
cinema, and consumer-rating agencies are some primary public sources.
They consist of handling, examining, testing, or using
4. Experimental sources - They consist of handling, examining, testing, or
using the product.
 Evaluation of Alternatives
Obviously, he would not buy all of these brands. As a consumer, he would
just select one brand among the alternatives that for him is the best to provide
the utmost satisfaction.
He has, of course, certain criteria to use in evaluating various alternatives, such
as:
1. Benefits provided by the brands
2. Qualities, features or attributes, and performance
3. Price changed by different brands
4. Past record of brands
5. Attractiveness, image or reputation of brands
6. Product-related services provided by the brands, for example after-sales
services, warrantee, and without charge installation
Purchase Decision
At this stage, the customer has searched several brands; he knew the price and
payment options and now prefers one as a promising brand to buy. Obviously, the
brand that offers maximum benefits or satisfaction in relation to price is chosen.

Basically, there are several factors that contribute on the decision of the
consumer to avoid, modify, or postpone a purchase decision, which are:
1. Attitudes of others - Sometimes other persons' attitudes are negative about the
consumer's preferred brand. The consumer may be affected with these negative
attitudes and comply with them.
2. Unanticipated situational factors - Increase in price, unemployment, income of the
household, big medical expenses, and unavailability of the most favored brand and
such other comparable unexpected situations may change the buying intention.
3. Consumer's perceived risk - Some bases of perceived risk could be on price, quality
doubt, entrance of a new better-quality product and the customer self- confidence.
Post-Purchase Evaluation
After a purchase is completed, it is expected that the customer would
evaluate whether he made a good decision or not. When the customer feels that
his purchase was an erroneous decision, there may be a possibility of a return.

Here are some of the few things that a marketer should check about the post-
purchase experience of the buyers, namely:
1. Post-purchase satisfaction – Actual satisfaction may not be identical to the
expected one. A customer may discover some faults or defects in the product as
he uses it.
2. Post-purchase action - The best advertisement is a completely satisfied
customer.
3. Post-purchase use and disposal - Information concerning product usage and
disposal have to be observed by marketers. Marketers can make use of the
information as guide to find out potential problems and opportunities.
Most of the time, consumers use or dispose a product in these
manners, such as:
a. Consumer may fully use the product right after buying;
b. Consumer may store the product for use in the future;
c. Consumer may resell or trade it;
d. Consumer may discover new uses of the product; hence use
it in a different way;
e. Consumer may present the product to other people as a
gift;
f. Consumer may consider the product worthless and throw it
away.
SITUATIONAL INFLUENCES ON CONSUMER BEHAVIOR
Some buyers often experience that their buying behavior
is influenced by their situations. Situational influences are
short-term conditions that shape how buyers behave, whether
they actually buy a product, buy additional products, or buy
nothing at all from a store.
Temporal Perspective
Time is the focus of temporal perspective. The standpoint
on time could mean time allocated for shopping, time of the
day for shopping which could be in the morning, evening or
afternoon, season, time of the year, time of festivals and other
related factors that may be identified with time.
Here the three forms on how time can affect shopping:
• 1. Time pressure- Time is essential for comprehensive
problem solving. However, when time is limited, customers are
likely to process information less. Being in a hurry makes
customers not being able to think very well about different
options.
2. Time of year - Buying decision could also be affected by the
changing seasons.
3. Time of day - Every individual has his own body clock. A lot
of people are natural sleepers and are awake during the day.
However, some are still up during late hours in the evening.
Purchase Task
Purchase task means the buying intention or reason behind the purchasing
decision of a certain product or service.

• Social Surrounding
Often times a purchase is influenced by the presence of other members of
the society while in a shopping activity. Being a social being, the opinion ofthese
people about the purchase and use of products affects buying decision of
consumers.

Atmospherics in the Physical Surroundings

The concept of atmospherics includes the physical surroundings, the music
and the handling of the crowd. The physical surroundings act as stimuli and through
the five senses may catch the attention of customers.
Consumer Behavior Atmospherics
1. Point-of-purchase displays - It can draw attention to a certain
product or a particular brand and generate a greater chance of
purchasing that product or brand.
2. Color - Different cultures have particular meanings to colors. Hence,
a store whether physical or virtual must have complete understanding
of colors and their meanings. Most of the times, colors affect
customers unconsciously. Red stimulates ones energy; green a
refreshing effect while blue is a calming color.
3. Smell - The intention of the store management is to let customers
stay a little longer and move around the facility. Known as strategic
fragrancing, the outcomes are longer stay, more purchases, and leaving
with great impression of quality stores' services and products.
4. Music - It has been said that music influences a customer's
mood. Slow tempo music calms down the customer and
becomes the basis for them to linger in the store longer.
5. Crowds - Based on some studies, overcrowding in stores lead
to negative shopping experiences. Customers may feel too
restricted in their movements and turn to be unhappy leaving
the store immediately.
6. Promotional deals - This is about offering a price purchase
incentive such as some cents-off sales, buy one take one or
even bundled items.
7. Stock-out - It means that a store has not restocked the
product. This can cause brand switching or store switching.
Antecedents States
Everyone involved in marketing knew that when the buyer
is in the mood, he is more likely to purchase goods. So,
marketers always strive to produce a positive mood, by means of
advertising appeals to get a positive response from the customer.
Characteristics of antecedents states
1. Momentary moods - These are such things as provisional
states of depression or high excitement. Moods are short-lived
feelings that are not attached to a specific event or object.
2. Momentary condition - These are such things as being tired,
feeling ill, and so on.
Socio - cultural Factors

Socio class Factors

• PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR
The human psychology has an important role to play in manipulating the
consumer's preferences and likes or dislikes for a specific product and services.

Motivation

Values,
Beliefs, and PSYCHOLOGICAL
FACTORS Perception
Attitudes

Learning
Motivation - Maslow's hierarchy of needs fully explains the different
needs of individuals.The motivation of an individual to act is based on the
importance of each need.
MASlOw'S HIERARCHY Of NEEDS
5 Self
actualization
4
Esteem

3
Love and belonging
2
Safety and Security
1
Physiological needs
1. Physiological needs - consist of hunger, thirst, and other basic drives. Every one living,
inspite of of their level of maturity, has physiological needs. Physiological needs are
universal and persist throughout nature.
2. Safety and security - involve a nonstop fulfillment of physiological needs, besides the
non-existence of the danger of physical damage. Safety and security include physical and
financial security.
3. Love and belonging are also essential needs. Love includes the needs for
belongingness, friendship, human relationship, and family. They involve individual's
relations with others and the need to be accepted as part of social groups, big or small.
4. Esteem consists of the need to experience goodness about oneself, to be treasured
and appreciated by others, besides a positive self-image.
5. Self-actualization is the need humans feel to accomplish their highest potential and to
achieve all that they can with their talents and abilities. Depending on the individual's
interest, self-actualization may be in the form of engagement in musical or artistic
pursuits, good parenting, or athletics.
Perception
The perception is the process by which the individual chooses, sorts
out and takes meaning to the information in drawing a significant
conclusion.

• There are three different processes which lead to difference in perception:

1. Selective Attention - This refers to the process where individuals give
high attention to information that is useful to them or their direct family
members.
2. Selective Distortion - Consumers are inclined to perceive information in a
manner which would be in harmony to their present ideas and beliefs.
Accordingly, the marketer should strive to know the attitudes and beliefs of
individuals and draw the marketing campaigns to keep the consumers.
3. Selective Retention - Consumers retain information which would be
helpful to them, and the rest they forget watch for his wife and thus he
recalled the advertisement which he had seen as time passes.
Learning
Learning is an experience and practices that in reality changes behavior of
any consumer. The individual's learning depends on the skills, knowledge and
intention. The skills are developed through practice while the knowledge and
intention are acquired with the experience. There could be a conditional learning
or a cognitive learning.

Values, Beliefs, and Attitudes

The individuals have certain beliefs and attitudes about products on which
their purchase decisions depend. These attitudes and beliefs are the likelihood to
take action to a given product in a particular way, and these make up the brand
image that influences the consumer buying behavior.
On the other hand, a belief is a promise a person holds about something.
An attitude is a constant view of something that includes the belief and an
emotional feeling and a related behavior.
SOCIO-CULTURAL INFLUENCES ON CONSUMER BEHAVIOR
The social factors are the factors that are common in the society where a
consumer resides. The society is composed of several individuals that have different
preferences and behaviors. On the other hand, the cultural factors are the factors that an
individual learns while growing up due to socialization within the family and other key
institutions.
Roles and
status
Reference
Family
Groups

Socio -
cultutal
Factor
Reference Groups
A reference group is a group with which an individual likes to be
associated with, and be called as a member of that group. It has been
observed, that all the members of the reference group have similar buying
behavior and have a strong influence over each other.
The marketers should strive to discover the roles within the reference
group that influences the behavior of others, such as:
1. Initiator - He initiates the buying decision.
2. Influencer - His opinion influences the buying decision.
3. Decision-maker - He has the authority to take the purchase decision.
4. Buyer - He ultimately buys the product.
• Roles and status
Status is the position a person occupies in a
particular situation. Everyone occupies several statuses
and perform the roles that may be coupled with them.
A role is the set of norms, values, behaviors, and
personality characteristics connected to a status.
Family
One's preferences and behavior are highly influenced by family members. It
is within that family an individual grows, develop his personality and shape his
values. Likewise, an individual's buying preferences and behavior are developed as
he watches his parents and a great possibility of buying similar products or services
even when he grows old.
Two Types of families
1. Family of Orientation - This is the family wherein a person has taken his birth
and his parents have a strong influence on his behavior. For instance, an individual
coming from a vegetarian family may not eat meat or egg even though he may
understand its nutritional values.
2. Family of Procreation - This is the family created by a person with his spouse
and children and as such the preferences are likely to change with the influence of
his spouse. For instance, a father normally decides about investment concerns
while the mother makes decision about the health of their children.
• Social Class
The influence of the social class is very strong in the buying decision of a customer. Social
class is where an individual belongs in the society. Social class is relatively a permanent and
ordered division in a society whose members share the same value, interest and behavior. Social
class is not identified by a mixture of various factors, such as income, occupation, education,
authority, power, property, ownership, lifestyles, consumption pattern and so on.
• Culture
The culture refers to the beliefs, customs, rituals and practice that a particular group of
people follows. As a child grows, he inculcates the buying and decision- making patterns through
his family and the key institutions. The culture varies from region to region and even from
country to country.

• Subculture
The culture can be further divided into subculture wherein the people more particularly
based on their shared customs and beliefs. Categorized Customers could be subcategorized in
terms of religions, geographic regions, nationalities, and so on.
PERSONAL INFLUENCES ON CONSUMER BEHAVIOR
The personal factors are the individual features of consumers that highly control their
buying behaviors. These features differ from person to person that may result in the
differences of perceptions, attitudes and behavior about goods and services.

AGE

LIFESTYLE

PERSONAL GENDER

FACTORS

OCCUPATION

EDUCATION
• Age
The consumer buying behavior is greatly influenced by his age.
Consumers buy different products in different stages of their life cycle.
• Gender
Since males and females have different needs in terms of fashion
and lifestyle, these affect their buying choices. These two genders are
greatly different because of the distinction in their needs. However, they
may be similar in terms of food and fun.
• Education
Outlook about the things that are around is influenced by
education. Education also has an impact on the level of judgment
consumers apply when buying.
• Occupation

The occupation of the individual also influences his buying

behavior. An individual's nature of job has a direct influence on
the products and brands he picks for himself. The people tend
to buy those products and services that promote their
profession and role in the society.
• Lifestyle
The lifestyle also means individual's interest, values,
opinions and activities that reflect the manner in which he lives
in the society.
ECONOMIC INFLUENCES ON CONSUMER BEHAVIOR
The economic factors are the features that speak about the level of sales in
the market and the financial position of the consumer, such as how much an
individual spends on the purchase of goods and services that add to the overall
sales of the company.
Personal Family
Income Income

Economic Income
factors Expectations

Liquid Assets
and Savings Consumer
of the Credit
Consumer
Personal Income
It is the income of a consumer that dictates his purchasing power. Simply,
the more personal income a person has, the more he can spend on a lot of items.

Family Income
The family income refers to the combined sum of the income of all the family
members. The total family income also influences the buying behaviors of its
members. The residual income after purchasing all the basic necessities of
everyday life may be utilized to buy shopping goods, luxury items, durable goods,
and other items.
Income Expectations
An individual's anticipation about his increase income level in the future
influences his buying behavior today.
• Consumer Credit
The credit facility obtainable to the consumer also influences his buying
behavior. If the credit terms are liberal, then the customers are likely to spend
more on the extravagant items, durable goods, and shopping goods. This credit is
offered by the seller either directly or indirectly through the banks and other
financial institutions. This is the case of car loan or housing as examples.
• Liquid Assets and Savings of the Consumer
The liquid assets with the consumer have an influence in his buying behavior.
The liquid assets are the assets that are easily redeemable into the cash. If the
customer has more liquid assets, then he is predictable to use more on the
extravagant items and the shopping goods. On the other hand, if the liquid assets
are restricted then the spending on extravagant items also reduces.
THE BUSINESS MARKET
The business market consists of all the organizations that obtain goods and services used
in the production of other products or services that are sold, rented, or supplied to others.
Thus, the business market does not buy for personal consumption.

TYPES OF
BUSINESS
MARKET

Industrial Resale Government Institutional

markets Markets Markets
markets
• Industrial markets
The industrial market consists mainly of companies making business in
durable machinery, materials, chemicals, vehicles and office furniture and supplies.
The buyers are often manufacturers and the sellers are known as suppliers.

• Resale markets
- Resale markets purchase finished products and retrade them to their
customers for the intention of making a profit.
- Resale markets do not change the products they procure. They can be
wholesalers who put up for sale their products to other resellers or retailers who
sell their products to final users.
- The resale market includes wholesalers, retailers, and distributors. Resellers
may limit their purchases to one product or brand or sell an assortment of
products and brands.
• Government Markets
- Government organizations normally need suppliers to propose bids and
usually they grant the contract to the lowest bidder. Getting these contracts
typically needs filling out long bids, showing evidence of corporate standing and
approving to pursue other business practices government agencies necessitate.
- The government department will make allowance for suppliers' superior
quality or reputation for finishing contracts promptly.
- They are likely to support domestic suppliers over foreign suppliers.
• Institutional Markets
Institutional market includes schools, hospitals, nursing homes, prisons and
other institutions that must be supplied with goods and services to people in their
care. Numerous of these organizations are characterized by low budgets and
captured customers.
BUYING SITUATIONS IN THE BUSINESS MARKET
Following are the three types of business buying situations.
• Straight Rebuy
In this case, the prior routine order is made by the industrial business buyer without
any adjustments. The organization simply rebuys products and services from the same
suppliers.

• Modified Rebuy
In this situation, a certain business wants to change its order in respect of specification of
product, its price or terms and so on. This needs more partaker in the decision making
process.

• New Task
` When a business buys an exact product or service for the first time, then this case is
called new task buying.
PARTICIPANTS IN THE BUSINESS BUYING PROCESS

Initiators

Influencers
Gatekeepers

BUYING
CENTER
Deciders
Buyers

Users
• Initiators
Initiators are those who start the buying process. Depending on what type
of product to purchase, there would be differences on who will be initiating.

• Influencers
Influencers are those people who give information and put in decision
standards during the buying process.

• Deciders
Deciders are those who have power to choose a supplier. For various
purchases, the main influencers may come to a decision upon the seller jointly.
The major influencers may, in fact, sit down as a group, sort out differences and
consent upon a supplier together.
• Users
Users are individuals or groups that use the product. For equipment, the user is the production
department; for components, the user is assembly department; for operating supplies, the user may be
maintenance department.

• Buyers
-Some companies may consent to users in buying low priced items from a preferred group of
suppliers by themselves.
-They are focused on the value that they want to gain from the product. Smart business
marketers will take concurrence of users and influencers in justifying the high prices of their products.

• Gatekeepers
A gatekeeper controls the flow of information, or allows or prevents access to a DMU member. He
may be a purchaser whose permission must be sought before a supplier can contact other members of
the DMU. The purchase department may insist that all discussions between the supplier and various
decision makers in the company be routed through it.
BUSINESS BUYING PROCESS
The new task buying contains all of these steps whereas the straight or
modified rebuy may skip some of them.

BUSINESS BUYING PROCESS

1 2 3 4
Description Specification Search of
Problem
of General of the Supplier
Recognition
Need Product

5 6 7 8
Order-
Proposal Selection of Performance
Routine
Solicitation Supplier Review
Specification
• Problem Recognition
In the first stage of business buying process, a certain
problem is identified by someone in the organization. The need
or the problem is recognized through either internal or external
cues.
An internal factor would be the awareness of not having
adequate capacity, so that new equipment must be bought or it
may be product returns from customers meaning that its
machine is not manufacturing quality products.
the external elements may be in the form of any latest idea
of a product at a trade show or seeing new advertisements or
any positive offering by a salesperson and so on.
• Description of General Need
This stage begins when an obvious need has been recognized by the
organization. The team or unit in the process involves a team of buyers,
engineers and other professionals who work together to agree on the
desired product. In this step, description about the general need has been
set which explains the general characteristics and the quantity of the
needed product.

• Specification of the Product

In this stage, the organization that is involved in the business buying
process organizes a comprehensive list of the technical specifications of
the preferred product through value analysis carried out by the
engineering team.
Search of Supplier
In this step of the business buying process, the buying
organization looks for the suppliers to buy with the best
one
• Proposal Solicitation
In this stage the suppliers are asked to submit their
proposals. In some cases, some suppliers send only their
salespersons or simple catalogs.
Selection of Supplier
At this stage the final supplier is chosen from the list of possible suppliers
who have submitted their proposals to the buying organization. The selection team
of the buying organization appraises the proposals of all suppliers and list the
offered attributed on the basis of the rank of importance.
Following are some of the main attributes that serve as the basis for the
selection of potential suppliers.
1. Quality of product
2. Delivery time
3. Ethical corporate behavior
4. Reasonable price
5. Honest communication
6. Past performance and reputation
7. Repair and maintenance services etc.
Order-Routine Specification
The order-routine specifications are prepared in this step
which contains the order having a final list of the specifications,
the selected supplier, delivery time, quantity required, price
and repair and maintenance services etc.
Performance Review
This is the last stage of the business buying process in
which the performance of the supplier is reviewed by the
buying organization. For this purpose the buying organization
contacts with the customers or users of the purchased product
and ask them to provide their experience of using that product.
 THE END,
THANk YOU !