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Chapter 5: Knowing Your Customer:

Consumer and Business
Use this Instructor’s Manual to facilitate class discussion and incorporate the unique features of the text’s
highlights. Follow-up via the Connect exercises is then encouraged to provide a holistic understanding of the
chapter. Click here to access the Connect Inst ruct or’s Manual for helpful suggestions, recommendations
and time-saving hints.

CHAPTER FORECAST
This chapter explores the importance of knowing your customers, both individual consumers and other
businesses, and how they make decisions. If you understand why the people and firms buying your product
behave the way they do, you will be able to develop effective marketing strategies that appeal specifically to
them. This chapter outlines the consumer decision-making process, describes how situational and
psychological factors influence consumers, and discusses the differences between marketing to individual
consumers and marketing to other firms. As you read through the chapter, consider the following key
questions:
1. How do I make decisions about what to 4. Does the price of a product change my decision-
purchase? making process?

2. What things in my life influence my purchase 5. How should I market my product differently if
decisions? my customer is another business rather than an
individual consumer?
3. How do my attitude and personality impact
what I buy? 6. What type of buying situation might I find
myself in when marketing to another business?

EXECUTIVE PERSPECTIVE
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 Tracey Rogers
Vice President and General Manager, KAIT-TV

With a career in new programming, Tracey Rogers understands the importance

of knowing all of her audiences. She uses her experience to provide insight by
answering the following questions:

1. What has been the most important thing in making you successful at
your job?
2. What advice would you give soon-to-be graduates?
3. How is marketing relevant to your role at KAIT-TV?
4. What do you consider your personal brand to be?

Woven into the chapter, you see how Tracey later elaborates on:
1. Using opinion leaders as an effective way to market to consumers (p.
135).
2. The importance of relationship development in B2B marketing (p. 145).

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LEARNING OBJECTIVES
LO 5-1 Explain the consumer decision-making process.
LO 5-2 Describe how situational influences impact consumer behavior.
LO 5-3 Describe the psychological processes that influence consumer behavior.
LO 5-4 Summarize the relationship between involvement and consumer decisions.
LO 5-5 Compare business-to-business marketing to business-to-consumer marketing.
LO 5-6 Compare the different buying situations in business-to-business marketing.

KEY TERMS
aspirational reference group family life cycle (p. 134) North American Industry
(p. 135) high-involvement products (p. Classification System (NAICS)
attitude (p. 138) 143) (p. 146)
business-to-business impulse buying (p. 142) opinion leaders (p. 136)
marketing (B2B) (p. 144) internal information search (p. personality (p. 136)
business-to-consumer 130) problem recognition (p. 129)
marketing (B2C) (p. 129) involvement (p. 142) psychological processes (p.
cognitive dissonance (p. 132) learning (p. 139) 138)
consumer behavior (p. 128) lifestyle (p. 136) reference groups (p. 134)
country-of-origin effects (p. low-involvement products (p. resellers (p. 147)
138) 142) retailer (p. 147)
derived demand (p. 144) membership reference group ritual consumption (p. 131)
dissociative reference group (p. 135) self-actualization (p. 141)
(p. 135) modified rebuy (p. 150) situational influences (p. 133)
esteem (p. 141) motivation (p. 139) straght rebuy (p. 150)
evaluative criteria (p. 131) new buy (p. 148) values (p. 137)
external information search wholesaler (p. 148)
(p. 129) wholesaling (p. 148)

CONTENT OUTLINE
The following section provides the flow of information using the LEARNING OBJECTIVES as a guide, FIGURES
and TABLES as visuals to elaborate on key areas, KEY TERMS learners will need to take away from the course
and a notation of when to use POWERPOINT SLIDES with LECTURE NOTES to drive home teaching points.
There is also a reminder on when CONNECT activities can be used, as well as tying in SOCIAL MEDIA IN
ACTION to real-world applications of marketing products. This is created so that you can facilitate in-class or
online discussion effectively.
LO 5-1 Explain the consumer decision-making process. Key Terms:

The Consumer Decision-Making Process Consumer

o Step 1: Problem Recognition behavior
o Step 2: Information Search Business-to-
▪ External Information Search consumer
▪ Internal Information Search marketing (B2C)
o Step 3: Evaluating Alternatives Problem
o Step 4: Making the Purchase recognition
o Step 5: Post-Purchase Evaluation External
information

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search
Internal
information
search
Evaluative criteria
Ritual
consumption
Cognitive
dissonance
Figure 5.1 Insight Questions:
1. Walk through the
decision to purchase a
new vehicle using the
consumer decision-
making process. What
insight did you gain
from exploring the
process? (Answer:
open-ended.)
2. Have you ever
experienced cognitive
dissonance (buyer’s
remorse)? If so, what
contributed to this?
(Answer: open-
ended.)
3. As a marketer, what
are some initiatives
Figure Information: The Consumer Decision-Making you can use to guide
Process consumers through
the stages of the
The consumer decision-making process has five stages, consumer decision-
consisting of: (1) problem recognition, (2) information making process
search, (3) evaluating alternatives, (4) making the efficiently and with
purchase and (5) post-purchase evaluation. Whether reduced levels of
consumers are deciding where to eat or what cell cognitive dissonance?
phone plan to purchase, most consumers targeted by (Answer: open-
B2C marketers go through a common decision-making ended.)
process.
PowerPoint Introductory Slides: Lecture Notes:
Slides Consumer behavior is
the way in which
individuals and
organizations make
decisions to spend
their available
resources, such as
time or money.
The role of consumer

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behavior in business-
to-consumer
marketing (B2C),
which involves selling
goods and services to
end-user customers.
Examples of B2C
businesses include
restaurants, car
dealerships, and
barber shops.
Most consumers
targeted by B2C
marketers go through
a common decision-
making process:
Step 1: Problem
Recognition:
The buying process
begins when
consumers recognize
they have a need to
satisfy.
Two important issues
relate to problem
recognition.
Marketers must
understand all aspects
of consumers’
problems, even those
that are less obvious,
to create products
that improve or
enhance consumers’
LO 5-1: lives.
Marketers must
remember that if the
consumer is not aware
of a problem or does
not recognize a need,
he or she is unlikely to
engage in any of the
subsequent steps of
the buying process.
Step 2: Information
Search:
Once consumers
recognize a problem,
they seek information
that will help them
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make the best

possible decision
about whether or not
to purchase a product
to address the
problem.
How important
consumers consider
the purchase is
important to note.
Larger purchases, like
buying a house or a
new car, often require
a great deal of
information gathering.
Smaller purchases,
such as a gift for a
new boyfriend or new
car speakers, may also
involve extensive
information searches
because of their
importance to the
consumer.
Information searches
fall into two main
categories: external
and internal.
External information
searches are when
consumers seek
information beyond
their personal
knowledge and
experience to support
them in their buying
decision.
Many firms use the
Internet and social
media to empower
consumers’ external
information search.
The power of these
personal external
information sources
highlights why
marketers must
establish good
relationships with all
customers.

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Internal information
searches require
consumers to use
their past experiences
with items from the
same brand or
product class as
sources of
information, and are
typically used in
frequently purchased
items such as
shampoo and
toothpaste.
Step 3: Evaluating
Alternatives:
Once consumers have
acquired information,
they can use it to
evaluate different
alternatives, typically
with a focus on
identifying the
benefits associated
with each product.
Consumers’ evaluative
criteria consist of
attributes that they
consider important
about a certain
product.
Marketing
professionals must
not only emphasize
the benefits of their
good or service but
also use strategies to
ensure potential
buyers view those
benefits as important.
Step 4: Making the
Purchase:
After evaluating the
alternatives, a
customer will most
likely buy a product.
Usually the marketer
has little control over
this part of the
consumer decision-

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making process.
Consumers have
several decisions to
make at this point,
such as the final price,
where and when to
make the purchase
and payment terms.
An effective marketing
strategy should seek
to encourage ritual
consumption—
patterns of
consumption that are
repeated with
regularity.
These types of repeat
purchases often
provide firms with
higher profits and a
steady stream of
customer sales.
Step 5: Post-Purchase
Evaluation:
Consumers’ post-
purchase evaluation is
critical because their
feelings about the
purchase will likely
impact whether or not
they become repeat
buyers of that
particular good or
service.
Cognitive dissonance,
or buyer’s regret, is
the mental conflict
that people undergo
when they acquire
new information that
contradicts their
beliefs or
assumptions.
Cognitive dissonance
after making a
purchase can arise for
numerous reasons.
Marketers do various
things to reduce the
level of dissonance
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felt by the consumer.

By making consumers
feel better about their
car purchase,
marketers increase
the likelihood that
those consumers will
provide positive
external information
about the car to other
people and ultimately
consider returning for
their next car
purchase.
Post-purchase
evaluation is even
more important to
marketers today
because of the power
of customer reviews
available on the
Internet.
Consumers don’t
always follow the
orderly stages
discussed.
Numerous situational
influences like these
can occur at various
points in the decision-
making process and
change the customer’s
path.
Connect Topic: Social Media
Assignment 5-1
Complete the Connect exercise for Chapter 5 that focuses on social media. Develop
social media strategies to maximize the engagement between your brand and the
consumer. As social media become an important influence on consumer behavior,
it’s important to consider ways to maximize their full marketing potential.

Incorporate This Activity into Your Course. For tips on how to incorporate this
Connect exercise into your lesson, click here to access the Interactive Assignment
Guide.

Insight Questions:
1. What types of ads on social media do you find effective as a consumer?
2. To monetize social media ads, what types of measurements would you track for
a firm?

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Social Media in Example: Online Ads with Ritz Crackers and Glee
Action
A recent evolution in marketing involves organizations running online ads that
promote their social media presence rather than their products. Consumers who
click on the online ads can view firm-created YouTube videos, actual Facebook wall
posts, and the company’s Twitter page. This type of engagement increased the
average amount of time consumers spent interacting with the ad over 250 percent,
with an even larger increase in the number of consumers who clicked the Learn
More button attached to the ad.

Insight Questions:
1. What companies have you seen using social media with these types of ads? Do
you click through?
2. If you were the marketing manager for a firm, would you use social media
advertisements to access your target market? Explain your answer.
Connect Topic: Consumer Decision-Making Process
Assignment 5-2
Complete the Connect exercise for Chapter 5 that focuses on the consumer decision-
making process. By understanding the dynamics of each stage, you should gain
insight into how marketers can impact consumer decisions and help their
organizations succeed.

Incorporate This Activity into Your Course. For tips on how to incorporate this
Connect exercise into your lesson, click here to access the Interactive Assignment
Guide.

Insight Questions:
1. What kinds of external influences can affect the consumer decision-making
process?
2. What encourages consumers to take the next step in the consumer decision-
making process?
LO 5-2 Describe how situational influences impact consumer behavior. Key Terms:
Situational Influences and the Consumer Situational
o Time influences
o Social Factors Family life cycle
▪ Family Influences Reference group
Children’s Influences on Family Membership
Purchases reference group
The Family Life Cycle Aspirational
▪ Reference Groups reference group
▪ Opinion Leaders Dissociative
o Personal Factors reference groups
▪ Personality Opinion leaders
▪ Lifestyle Personality
▪ Values Lifestyle
o Global Factors Values
Country-of-origin
effects

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Figure 5.2 Insight Questions:

1. Why do the stages
have a different effect
on a firm’s marketing
strategy? (Answer:
open-ended.)
2. Compare the stages of
the family life cycle to
your siblings and close
friends. How does the
life cycle stage you are
in place you in similar
or different groups for
marketers? (Answer:
open-ended.)

Figure Information: Stages of the Family Life Cycle

There are six stages that an individual might go

through as part of his or her family life cycle: (1)
unmarried, (2) married with no kids, (3) married with
small children or tweens, (4) married with teens, (5)
married without dependent children, and (6)
unmarried survivor. Each stage impacts consumer
behavior, and thus a firm’s marketing strategy to that
consumer, differently.
PowerPoint LO 5-2: Lecture Notes:
Slides Numerous factors
affect the consumer
decision-making
process at every
stage.
An effective marketing
strategy must take
situational and
psychological
influences into
account.
Situational influences
include factors like
time and social
surroundings.
Consumers value their
time greatly and time
considerations often
affect what
consumers buy.

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Time can also impact

what a consumer
ultimately pays for a
good or service.
Consumers are often
willing to pay more for
products if the
placement of those
products saves them
time.
Social factors develop
from a consumer’s
relationships with
others and can impact
the consumer
decision-making
process.
Family members are
one of the greatest
influences on
consumer behavior.
Children often greatly
influence a
household’s purchase
decisions, particularly
in the realm of
grocery shopping and
dining out.
The family life cycle
describes the distinct
family-related phases
that an individual
progresses through
over the course of his
or her life.
Each stage impacts
consumer behavior
and thus a firm’s
marketing strategy to
that consumer
differently.
There are six stages
that an individual
might go through as
part of his or her
family life cycle: (1)
unmarried, (2)
married with no kids,
(3) married with small
children or tweens, (4)

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married with teens,

(5) married without
dependent children,
and (6) unmarried
survivor.
Reference groups can
provide consumers
with a new
perspective on how to
live their lives.
A reference group is
made up of the
people to whom a
consumer compares
himself or herself.
The more public the
purchase decision, the
more impact
reference groups are
likely to have.
A membership
reference group is the
group to which a
consumer actually
belongs and include
school clubs,
fraternities and
sororities, and the
workplace.
An aspirational
reference group refers
to the individuals a
consumer would like
to emulate.
Dissociative reference
groups include people
that the individual
would not like to be
like .
Opinion leaders are
individuals who exert
an unequal amount of
influence on the
decisions of others
because they are
considered
knowledgeable about
particular products.
A consumer’s personal
factors (personality,

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lifestyle, and values)

directly impact his or
her behavior.
Personality is the set
of distinctive
characteristics that
lead an individual to
respond in a
consistent way to
certain situations.
Personality strongly
influences a
consumer’s decision
to purchase products.
Lifestyle is a person’s
typical way of life as
expressed by his or
her activities,
interests, and
opinions.
Values reflect a
consumer’s belief that
a specific behavior is
socially or personally
preferable to another
behavior.
Personal values, which
include everything
from a consumer’s
religious beliefs to a
belief in self-
responsibility, can
impact the decision-
making process.
Marketers should be
aware of how unique
factors in different
nations throughout
the world can
influence consumer
behavior.
Country-of-origin
effects are the beliefs
and associations
people have about a
country.
They can reflect an
overall positive or
negative feeling about
that country or be
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specific to certain
products.
Marketers should also
be aware of how
consumer behavior
differs in international
markets.
LO 5-3 Describe the psychological processes that influence consumer behavior. Key Terms:
Psychological Processes and the Consumer Psychological
o Attitude processes
o Learning Attitude
o Motivation Learning
▪ Physiological Needs Motivation
▪ Safety Needs Esteem
▪ Love and Belonging Self-actualization
▪ Esteem
▪ Self-Actualization
Figure 5.3 Insight Questions:
1. List examples of each
of the five needs.
(Answer: open-
ended.)
2. Maslow theorized that
one must satisfy the
lower-level basic
needs before
progressing on to
meet higher-level
growth needs. How
does this theory
affect marketers?
(Answer: open-
ended.)

Figure Information: Maslow’s Hierarchy of Needs

Abraham Maslow theorized that humans have various

types of needs, from simple needs like water and sleep
to complex needs like love and self-esteem. In
Maslow’s hierarchy of needs model, it is theorized that
people seek to meet their basic needs before fulfilling
higher-level needs.
PowerPoint LO 5-3: Lecture Notes:
Slides For consumers to
make purchase
decisions, they must
engage in certain

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psychological
processes, such as
attitude, learning, and
motivation.
Psychological
processes are the
underlying
psychological
mechanisms that can
influence consumer
behavior and
ultimately result in
consumer decisions
and purchases.
Attitude is a person’s
overall evaluation of
an object involving
general feelings of like
or dislike and reflects
a person’s view of
something, such as a
product, nonprofit
organization, or
political candidate.
Attitude affects
marketing strategy.
Firms marketing online
must understand and
comply with privacy
laws and implement
the right messaging
and policies to
demonstrate that they
take consumers’
attitudes about
privacy seriously.
Learning refers to the
modification of
behavior that occurs
over time due to
experiences and other
external stimuli.
Marketers can
influence consumer
learning, and, by
doing so, impact
consumer decisions
and strengthen
consumer

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relationships, but they

must first understand
the basic learning
process.
Marketers can
capitalize on
consumer learning by
designing marketing
strategies that
promote
reinforcement.
Motivation is the
inward drive we have
to get what we need
or want.
Marketers spend
billions of dollars on
research to
understand how they
can motivate people
to buy a full range of
consumer products.
Maslow’s hierarchy of
needs model,
developed in the mid-
1900s, illustrates the
belief that people
seek to meet their
basic needs before
fulfilling higher-level
needs.
Physiological needs,
forming the base of
Maslow’s hierarchy,
are the simple
requirements for
human survival.
If these requirements,
such as food or
shelter, are not met,
the human body
simply cannot
continue to function.
Once physical needs
have been satisfied,
consumers’ safety
needs take
precedence and begin
to dominate behavior.
Safety can take
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different forms,
including physical
safety and economic
safety.
The absence of
physical safety—due
to war, natural
disaster, or family
violence, for
example—can lead
people to experience
post-traumatic stress
disorder or other
emotional conditions.
The absence of
economic safety—due
to economic crisis or
lack of job
opportunities—leads
consumers to want
job security, savings
accounts, insurance
policies, reasonable
disability
accommodations, and
the like.
The third level of
human needs involves
love and belonging,
and can impact an
individual’s ability to
form and maintain
emotionally significant
relationships with
romantic partners,
friends, and family.
The fourth level in the
hierarchy of needs is
esteem—the need all
humans have to be
respected by others as
well as by themselves.
Lower esteem needs
include the need for
the respect of others,
status, recognition,
fame, prestige, and
attention.
Higher esteem needs
include the need for

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self-respect, strength,
competence, mastery,
self-confidence,
independence, and
freedom.
Maslow describes the
top tier of the
hierarchy as the
aspiration to become
everything that one is
capable of becoming,
or self-actualization,
which pertains to
what a consumer’s full
potential is and the
need to realize that
potential.
Connect Topic: Maslow’s Hierarchy of Needs
Assignment 5-3
Complete the Connect exercise for Chapter 5 that focuses on Maslow’s hierarchy of
needs. By understanding the dynamics of each stage, you should gain insight into
how marketers can impact consumer decisions and help their organizations be more
successful.

Incorporate This Activity into Your Course. For tips on how to incorporate this
Connect exercise into your lesson, click here to access the Interactive Assignment
Guide.

Insight Questions:
1. If your firm’s product falls in the safety needs category, what types of marketing
communication would you use in promoting your product and brand to
consumers?
2. How does marketing safety needs differ from marketing, for example, esteem
needs?
LO 5-4 Summarize the relationship between involvement and consumer Key Terms:
decisions. Involvement
Involvement Impulse buying
o Low-Involvement Buying Decisions Low-involvement
o High-Involvement Buying Decisions products
High-involvement
products

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Figure 5.4 Insight Questions:

1. What are some
examples of low-
involvement and high-
involvement purchase
decisions you have
made? (Answer: open-
ended.)
2. Consider the decision
to purchase a vehicle
Figure Information: Characteristics of High- and Low- after graduating from
Involvement Buying Decisions college. Explore the
characteristics of the
The characteristics of high-involvement buying purchase; what makes
decisions and those of low-involvement buying this a high-
decisions are compared using examples of toiletries involvement
and houses to illustrate the spectrum. The study of purchase? (Answer:
high and low involvement focuses on how consumers expensive, seldom
choose which alternative to purchase and is important purchased, requires
for firms to understand as they develop strategies to research and is risky.)
sell their products. 3. How do marketers
capitalize on low-
involvement purchase
decisions, which are
usually made in the
store? (Answer:
Unique packaging or
special displays help
to capture the
consumer’s attention
and quickly explain
the product’s purpose
and benefits.)
PowerPoint LO 5-4: Lecture Notes:
Slides How consumers make
choices is influenced
by their level of
involvement
(personal, financial
and social
significance) in the
decision process.
Low-involvement
products are
inexpensive products
that can be purchased
without much
forethought and that
are purchased with
some frequency.

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Impulse buying is
purchasing a product
with no planning or
forethought, such as
buying gum in a
grocery store
checkout line or a new
cap that you notice as
you walk through a
mall.
Consumers often do
not recognize their
desire for a low-
involvement product
until they are in the
store, which
influences the
strategic decisions for
marketing these
items.
High-involvement
products include more
significant purchases
that carry a greater
risk to consumers if
they fail.
Companies that
market high-
involvement products
must provide
potential consumers
with extensive and
helpful information as
they go through the
decision-making
process.
Firms must remember
that the difference
between low-
involvement and high-
involvement products
is not always absolute
and depends on the
priorities of the
individual consumer
and may differ
between male and
female.

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LO 5-5 Compare business-to-business marketing to business-to-consumer Key Terms:

marketing. Business-to-
Business-to-Business Marketing business
o Professional Purchasing marketing (B2B)
o Derived Demand Derived demand
o Fewer Buyers North American
Types of Buying Customers Industry
o Government Markets Classification
▪ The North American Industry Classification System System (NAICS)
o Institutional Markets Resellers
o Reseller Markets Retailer
Wholesaling
Wholesaler
Table5.1 Insight Questions:
1. Why is it important for
marketers to
understand the NAICS
classification list?
(Answer: A working
knowledge of the type
of information
governments need to
make decisions about
what to purchase can
ease the process for
marketers.)
2. Who assigns NAICS
codes? (Answer:
Individual
establishments are
assigned NAICS codes
by various agencies
Table Information: NAICS Sectors for various purposes
using a variety of
The NAICS sectors are identified, along with the two- methods;
digit code assigned to each that makes it possible for www.census.gov)
governments to compare and make purchase decisions
across industries. The NAICS classifications are based
on the types of production activities performed. The
list divides industrial activity into 20 sectors, from
construction and retail to education services.

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Figure 5.5 Insight Questions:

1. Explain the number of
digits in the NAICS
classification system.
(Answer: The first two
numbers in the code
represent the two-
digit sector
designation. The third
digit reflects the
subsector, the fourth
digit reflects the
industry group, and
the fifth digit
represents the
industry. The first five
digits of the NAICS
codes are fixed among
the members of
NAFTA. The sixth digit
can vary among
NAFTA countries.)
2. How is the six-digit
Figure Information: NAICS Code Designation for a code assigned?
Canadian Mechanical Pulp Mill (Answer:
Organizations in the
The NAICS code for a mechanical pulp mill in Canada is NAFTA member
shown. In this example, the sixth digit reflects specific countries are each
data from Canada. given a six-digit code
that can help
marketers identify
whether or not the
business fits within
their target market.)
PowerPoint LO 5-5: Lecture Notes:
Slides Business-to-business
marketing (B2B)
consists of marketing
to organizations that
acquire goods and
services in the
production of other
goods and services
that are then sold or
supplied to others.
While B2B marketers
face many of the same
challenges B2C
marketers do, they
also have to concern

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themselves with
several factors unique
to business markets.
Business sales
typically involve
professional
purchasing managers
who are experienced
in the policies and
procedures necessary
to make a large deal.
The B2B purchasing
process is often far
longer than the
consumer decision-
making process and
requires standardized
procedures, such as a
request for proposal
(RFP) and contract
negotiations.
The need for business
goods is derived from
demand for consumer
goods.
Derived demand
occurs when demand
for one product
occurs because of
demand for a related
product and provides
an important reason
to develop mutually
beneficial
relationships with
business-to-business
partners.
Business marketers
typically deal with far
fewer buyers than
consumer marketers
and these customers
are usually larger and
more essential to the
firm’s success.
Business-to-business
marketing
professionals focus on
several major
categories of business

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customers, including
government markets,
institutional markets,
and reseller markets.
Government markets
include thousands of
federal, state, and
local entities that
purchase everything
from heavy
equipment to clear
snowy roads to
paperclips to keep
office records
organized.
The United States
government is one of
the world’s largest
customers, spending
hundreds of billions of
dollars a year.
Because the public
holds the government
accountable for its
purchases, complex
buying procedures are
often used to ensure
that purchases meet
the necessary
requirements.
The North American
Industry Classification
System (NAICS) is a
single industry
classification system
used by the members
of the North American
Free Trade Agreement
(NAFTA)—the United
States, Canada, and
Mexico—to generate
comparable statistics
for businesses and
industries across the
three countries.
NAICS information is
one of the most
common
requirements in
completing the

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documentation to sell
to government
entities.
Organizations in the
NAFTA member
countries are each
given a six-digit code
that can help
marketers identify
whether or not the
business fits within
their target market.
The first two numbers
in the code represent
the two-digit sector
designation, the third
digit reflects the
subsector, the fourth
digit reflects the
industry group, and
the fifth digit
represents the
industry; the first five
digits of the NAICS
codes are fixed among
the members of
NAFTA and the sixth
digit can vary among
NAFTA countries.
Institutional markets
represent a wide
variety of
organizations,
including hospitals,
schools, churches, and
nonprofit
organizations.
Institutional markets
can vary widely in
their buying practices.
These diverse buying
situations pose unique
challenges for
institutional
marketers, who must
develop flexible,
customized solutions
that meet the specific
needs of differently
sized institutions with

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different needs.
Resellers include
retailers and
wholesalers who buy
finished goods and
resell.
A retailer, such as a
clothing or grocery
store, is a firm that
sells mainly to end-
user consumers like
you.
There are over 1
million different
retailers in the United
States.
Wholesaling is the
sale of goods or
merchandise to
retailers; industrial,
commercial,
institutional, or other
professional business
users; or to other
wholesalers.
A wholesaler is a firm
that sells goods to
anyone other than an
end-user consumer.
Wholesalers
frequently purchase a
large quantity of a
good at a low cost and
then sell off smaller
quantities of the good
at a higher per-unit
price.
LO 5-6 Compare the different buying situations in business-to-business Key Terms:
marketing. New buy
Buying Situations Straight rebuy
Modified rebuy

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Figure 5.6 Insight Questions:

1. What is the
distinguishing
characteristic of
retailers? (Answer: A
retailer is a firm that
sells mainly to end-
user consumers.)
2. What are some of the
unique challenges to
firms engaged in B2B
marketing? (Answer:
open-ended.)

Figure Information: Ten Largest U.S. Retailers

The 10 largest U.S. retailers are determined by total

retail sales.There are over 1 million different retailers
in the United States. According to these numbers,
dated from 2010, Walmart is largest retailer, and Sears
Holdings finished at number 10.
PowerPoint LO 5-6: Lecture Notes:
Slides Marketers can classify
business-to-business
buying situations into
three general
categories.
A new buy involves a
business customer
purchasing a product
for the very first time.
A straight rebuy
occurs when a
business customer
signals its satisfaction
by agreeing to
purchase the same
product at the same
price, and does not
require any additional
design modifications
or contract
negotiations.
A major advantage of
a straight rebuy is that
the customer typically
does not look for
competing bids from
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other companies.
A modified rebuy
occurs when the
customer’s needs
change slightly or they
are not completely
satisfied with the
product they
purchased.
B2B marketing should
seek to create,
communicate, and
deliver value to
customers in a way
that is ultimately
profitable, just as
marketers would with
individual consumers.

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Supplemental Slides:

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Connect Topic: B2C and B2B Consumer Marketing

Assignment 5-4
Complete the Connect exercise for Chapter 5 that focuses on the differences
between business and consumer markets. By understanding the strategic decisions
marketers face in B2C and B2B organizations, you will be able to successfully develop
strategies to succeed in either.

Incorporate This Activity into Your Course. For tips on how to incorporate this
Connect exercise into your lesson, click here to access the Interactive Assignment
Guide.

Insight Questions:
1. What are the key differences between business and consumer markets?
2. How does the marketing mix change if you are marketing to business
consumers?

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TODAY’S PROFESSIONAL
Caitlin Winey
Sales Representative,Forest Pharmaceuticals

Driven and adaptive, Caitlin Winey attributes a positive attitude and

networking to succeeding in her profession. She provides insight by
answering the following questions:

1. Describe your job.

2. Describe how you got the job you have.
3. What has been the most important thing in making you successful at
your job?
4. What advice would you give soon-to-be graduates?
5. What do you consider your personal brand to be?

MARKETING PLAN EXERCISE

Your Marketing Plan. Write a one-paragraph summary explaining whether you would prefer to work in a
B2C or B2B organization and discuss what organizational characteristics impacted your decision. Conclude
your paragraph with the names of three potential employers in the area where you would most want to live
that focus on your chosen market. Be sure to include:

The strengths and opportunities of B2C and B2B organizations.

Areas of concern in working with a B2C and B2B organization.
All potential locations/cities of three potential employers.

DISCUSSION QUESTIONS
1. Think of a recent purchase you have made and describe the actions you took at each stage of the
consumer decision-making process. Did you skip any of the stages? Which stage do you think should
be most important to marketers? Does it depend on what type of product is being marketed?
2. Which of the situational influences described in this chapter influence your buying decisions most?
Explain your answer.
3. List two high-involvement purchases you have made in the past year. What made them high
involvement to you?
4. Describe how derived demand might impact a college campus bookstore.
5. Pick a company that you or someone in your family has worked for. Then go to the NAICS website at
www.census.gov/eos/www/naics/ and figure out the full six-figure NAICS code for that company.
What are two other companies with the same code? How can this information be valuable to a small
business marketer?

SOCIAL MEDIA APPLICATION

Pick a company that you would like to work for after graduation and assume that you have been asked to
interview with them for a job next month. Analyze how social media can help you prepare for your interview
using the following questions and activities as a guide:

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1. Go onto the firm’s social media platforms and find at least two helpful pieces of information that you
can use in your interview that cannot be found on the organization’s general website.
2. In addition to the organization’s social media platforms, do the executives or managers of the firm
actively engage through social media? If so, are there useful pieces of information (such as Facebook
posts or tweets) that can help give you an advantage over others competing for the same job?
3. What are two things you can do with your own social media presence?

ETHICAL CHALLENGE
Researchers from the Center for Digital Democracy and American University released a report suggesting that
a rise in marketing on sites where kids are spending larger chunks of time is contributing to childhood obesity
and diet-related health problems by encouraging kids to make poor food choices. Food advertising is a
central part of many of the free, ad-supported online services offered to kids. Brands are also implanting
their logos where kids spend most of their time, such as with items in virtual worlds. Companies are also
drawing kids to their heavily branded sites with interactive games, video-editing software, and music
competitions.The FTC could decide that more brands have to promote veggies and other healthy foods on
their sites, regardless of whether they sell them or not. Or it could leave the industry to regulate itself in
hopes that brands, wary of angering parents with ultimate control over pocketbooks, will limit ads for less-
healthy alternatives. Use the ethical decision-making framework to answer the following questions:

1. Analyze McDonald’s efforts to market Happy Meals that contain free toys to children.
2. Find a company or organization that you think is using online marketing tools to reduce the trend in
childhood obesity. List the website and describe what the company is doing to lessen childhood
obesity in the United States.
3. Can online marketers promote healthy choices and still be profitable? Explain your reasoning and
provide examples for why or why not.

VIDEO CASE
Please go to Connect to access the video case featuring Chipotle that accompanies this chapter.

Incorporate This Activity into Your Course. For tips on how to incorporate this Connect exercise into your
lesson, click here to access the Interactive Assignment Guide.

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CAREER TIPS
To help you think about a career in marketing media, follow these tips.

Tracey Rogers, Vice President and General Manager,KAIT-TV, offers some tips
that have helped her achieve success in the field of media marketing.

Love what you do.

Know your audience.
Learn every aspect of media marketing.
Pay your dues.
Be a cheerleader for those around you.

Connect Instructor’s Manual

Helpful Suggestions Regarding Assignment Policies: Connect gives instructors a wide array of flexibility
in making assignments and creating grading policies. Instructors may choose to:

Assign as many assignments as he/she deems appropriate.

Determine point values for each question/interactive individually.
Make available multiple attempts per assignment with options of accepting the highest score or
averaging all the attempts together.
Deduct points for late submissions of assignments (percentage deduction per
hour/day/week/etc.) or create hard deadlines.
Show feedback on interactives/questions immediately or at the time of his/her preference.
Create new assignments or questions from scratch, such as web-linked assignments, LearnSmart
study modules, writing assignments, blog assignments, discussion board assignments, or upload
questions from a pool.

Recommendations: Here are some recommendations you might want to consider if you are using
Connect for the first time.

Assigning Learning Objective Videos: Learning Objective Videos are designed to reinforce core
concepts in the chapter. These are assignable by Learning Objective and require students to
view a brief video customized to match the content in the book. After watching the video,
students are tested on their understanding of these concepts through 4–6 Concept Check
questions. It is recommended that you assign Learning Objective Videos before class to help
generate class discussion. You can choose to have this feature feed the gradebook.
Assigning Interactives: Consider assigning only 1 or 2 interactives per chapter.

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Pooling Interactives: You have the option of “pooling” questions from three groups of questions
(a, b, and c). Choosing all three questions and assigning them as “pools” allows Connect to serve
up a different version of the interactive to different students. In this way, two students working
the “same problem” might have slightly different versions. This provides a higher level of
integrity of students’ individual work. Setting up question pools is recommended.
Assigning LearnSmart: You might also
want to assign less than an entire
chapter segment of LearnSmart in
Connect. The system allows you to do
this by dragging the toggle lever left
or right to increase or decrease the
time of the activity. You can also
reduce the time based on which
learning objectives you select and
deselect for the chapter.

The entire LearnSmart module is

available to your student at all times;
however, assigning 30 minutes or so
will prompt students to try it. You are
required to select a due date for LearnSmart. However, this will not bar the student from
LearnSmart access; it is designed to show you that the student has taken the LearnSmart
assignment. LearnSmart is an adaptive study tool designed for students. It can also show you
where students are struggling to understand specific concepts.
The student’s LearnSmart score in the Connect reports is based on her or his mastery of the
material at the time the assignment is due. Mastery is an evaluation of the number of learning
objectives she or he completed via performance on answering questions.
Students may, and are encouraged to, continue to use LearnSmart throughout the semester.
After the assignment due date, they can continue to access LearnSmart. Continued use of
LearnSmart will not affect their LearnSmart assignment results in the Connect reports, but has
been shown to improve test scores by as much as a full letter grade.

Time-Saving Hints:

Instructors may want to give students unlimited or multiple attempts on the first few
assignments so the students have a chance to learn and navigate the system before selecting
the option for one attempt only.

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The value of each question

should probably be relatively
low, since multiple questions
are usually assigned for each
chapter. A good rule of
thumb would be to make
“Quiz Questions” worth 1
point each and “Interactives”
worth 5–10 points each since
these require more time and
thought.
Each interactive has several
different versions of the same
material/questions to
prevent students from
copying answers directly from
one another. It might be wise to assign different versions to different sections or select
“scramble” assignment questions.

Feedback given to students is time flexible. Selecting feedback to be displayed after the
assignment due date helps to prevent students from giving the correct answers to other
students while the interactive is still available.

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Connect: Chapter 5 Interactive Assignment Guide

Interactives:
Interactive Assignment 5-1: Social Media in Action
Interactive Assignment 5-2
Interactive Assignment 5-3
Interactive Assignment 5-4
Video Case featuring Chipotle

Chapter Learning Objectives:

LO 5-1 Explain the consumer decision-making process.
LO 5-2 Describe how situational influences impact consumer behavior.
LO 5-3 Describe the psychological processes that influence consumer behavior.
LO 5-4 Summarize the relationship between involvement and consumer decisions.
LO 5-5 Compare business-to-business marketing to business-to-consumer marketing.
LO 5-6 Compare the different buying situations in business-to-business marketing.

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Interactive Assignment 5-1: Social Media in Action

Social Media Impacting Consumer Behavior

Activity Summary: This activity involves the increasing importance of social media in consumers’ search
for information as part of the overall consumer decision-making process. Students will be presented
with descriptions of various marketing tactics and asked to select which social media platform would be
most appropriate for each. A concept review includes different ways organizations are promoting their
social media presence to consumers.

Learning Objectives:
LO 5-1 Explain the consumer decision-making process.

Difficulty: 2 Medium

AACSB: Technology

Blooms: Understand

Page reference in text: 130

Follow-Up Activity: Instructors could discuss which social media platforms the students use to get
information before making a purchase. Students could be asked to create a larger list of potential
marketing strategies that could be helped by new and emerging social media tools. Instructors could
also engage students in a debate or assignment involving how the role of social media is different for
B2B as opposed to B2C consumers.

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Interactive Assignment 5-2

Buying a House Using the Consumer Decision-Making Process

Activity Summary: This activity involves the steps in the consumer decision-making process. Students
will be presented with a real-world scenario of a couple buying a home, and be asked to match a series
of their decisions to the appropriate step in the consumer decision-making process. A concept review
focuses on the importance of the consumer decision-making process for marketers.

Learning Objectives:
LO 5-1 Explain the consumer decision-making process.

Difficulty: 2 Medium

AACSB: Analytic

Blooms: Understand

Page reference in text: 132

Follow-Up Activity: Instructors could discuss the steps of the consumer decision-making process through
other examples the students are familiar with such as where they buy their textbooks or how they
selected their major. Students could be asked to create a larger list of decisions that they have made in
the past year and discuss how long they spent on each of the steps of the consumer decision- making
process. Instructors could also engage students in a debate or assignment involving which is the most
critical stage for marketers in order to successfully win over consumers.

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Interactive Assignment 5-3

Applying Maslow’s Hierarchy of Needs at Buchanan’s Supermarket

Activity Summary: This activity involves Maslow’s Hierarchy of Needs model. Students will be
presented with a scenario from a local supermarket, and be asked to make decisions which take into
consideration which level of the hierarchy of needs is met by different products. A concept review
outlines the Hierarchy of Needs model and its relevance to marketing.

Learning Objectives:
LO 5-3 Describe the psychological processes that influence consumer behavior.

Difficulty: 3 Hard

AACSB: Analytic

Blooms: Apply

Page reference in text: 142

Follow-Up Activity: Instructors could discuss products sold on campus and which level of the hierarchy
of needs each is best suited for. Students could be asked to create a larger list of products that they
have bought over the past month, and to outline which level of the hierarchy of needs each was
purchased for. Instructors could also engage students in a debate or assignment over how external
environmental factors, such as the economy, impact consumers’ level on the hierarchy of needs model
and ultimately their buying behavior.

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Interactive Assignment 5-4

Differentiating B2B and B2C Customers at ASU Software

Activity Summary: This activity involves differentiating between marketing strategies for B2B and B2C
consumers. Students will assume the role of a marketing manager for a software company, and be
asked to identify different characteristics between their B2B and B2C customers. A concept review
outlines some of the differences between B2B- and B2C-focused organizations.

Learning Objectives:
LO 5-1 Explain the consumer decision-making process.
LO 5-5 Compare business-to-business marketing to business-to-consumer marketing.
LO 5-6 Compare the different buying situations in business-to-business marketing.

Difficulty: 2 Medium

AACSB: Analytic

Blooms: Understand

Page reference in text: 151

Follow-Up Activity: Instructors could discuss how companies the students have worked for make
decisions differently than individual consumers. Instructors could also engage students in a debate or
assignment involving whether B2B or B2C marketing is easier and which one they would rather work in.

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Video Case featuring Chipotle

Why Chipotle Has Happy Customers

Activity Summary: This activity involves a video case on marketing at Chipotle restaurants. Students
will be presented a video detailing what steps Chipotle has taken to help consumers select their
restaurant (when going through the consumer decision-making process focused on where to eat). A
concept review includes a discussion of consumer behavior and the differences between high- and low-
involvement purchases.

Learning Objectives:
LO 5-1 Explain the consumer decision-making process.
LO 5-4 Summarize the relationship between involvement and consumer decisions.

Difficulty: 2 Medium

AACSB: Analytic

Blooms: Apply

Page reference in text: 154

Follow-Up Activity: Instructors could discuss strategies that other restaurants have used for each step of
the consumer decision-making process. Instructors could also engage students in a debate or
assignment involving what are the best tactics that restaurants have used to help consumers ultimately
select their restaurant.

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