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Principles of Marketing Unit 3: Consumer and Business Buying Behavior

Marketers succeed when they understand why and how people and organizations buy. This unit covers the forces that shape consumer choices, the steps buyers go through, and how business buying differs.

Covers: Cultural, social, personal and psychological influences, Motivation, perception and learning, The buyer decision process, Types of buying decision behavior, Adoption and diffusion of new products, Business markets and derived demand, The buying center and business buying situations

Study guide

Consumer buyer behavior is shaped by four groups of factors. Cultural factors are the broadest: culture is the set of values and behaviors learned from family and society, subcultures share values within a larger culture, and social class groups people by income, occupation and education. Social factors include reference groups, opinion leaders, family and the roles people play. Personal factors include age and life-cycle stage, occupation, economic situation, lifestyle and personality. Psychological factors are motivation, perception, learning, and beliefs and attitudes. Marketers cannot control these factors, but they can design products and messages that fit them.

Several psychology ideas appear on nearly every test. Maslow's hierarchy ranks needs from physiological to safety, social, esteem and self-actualization, and says people try to satisfy lower needs first. Perception is how people select, organize and interpret information, and it involves selective attention, selective distortion and selective retention, which is why many ads go unnoticed or are misremembered. Learning happens through drives, cues, responses and reinforcement: a satisfying purchase reinforces the habit of buying the brand again. Attitudes are lasting evaluations that are hard to change, so firms usually fit products into existing attitudes rather than fight them.

The buyer decision process has five stages: need recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. Buyers may skip or reverse stages for routine purchases. Information comes from personal sources (friends, reviews), commercial sources (ads, salespeople), public sources and experience. Between intention and purchase, the attitudes of others and unexpected situations can intervene. After buying, many consumers feel cognitive dissonance, discomfort caused by doubts about a big decision, and firms reduce it with follow-up messages, guarantees and support. Assael's model sorts buying behavior by involvement and brand differences into complex, dissonance-reducing, habitual and variety-seeking behavior.

New products spread through the adoption process: awareness, interest, evaluation, trial and adoption. Rogers' diffusion of innovations divides adopters into innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%) and laggards (16%). Early adopters are often opinion leaders, so marketers target them. Five product traits speed adoption: relative advantage, compatibility, low complexity, divisibility (trialability) and communicability (observability). A product that is clearly better, fits people's lives, is easy to use and easy to try spreads faster than one that is confusing or must be bought in full before anyone can see it work.

Business markets buy goods and services to make other products, resell them or run their operations. Compared with consumer markets, they have fewer but larger buyers, more professional purchasing, closer buyer-seller relationships and derived demand, meaning demand that ultimately comes from consumer demand for end products. Business demand is often inelastic in the short run and fluctuates more. Purchases are made by a buying center: users, influencers, buyers, deciders and gatekeepers. Buying situations range from a straight rebuy (routine reorder), to a modified rebuy (changing specifications, prices or suppliers), to a new task (first-time purchase), which involves the most people and information.

Key ideas

• Consumer behavior is shaped by cultural, social, personal and psychological factors, with culture the broadest.
• Maslow argues people satisfy lower-level needs before higher ones.
• Selective attention, distortion and retention explain why many marketing messages fail to get through.
• The five-stage decision process ends with postpurchase behavior, where cognitive dissonance can arise.
• Assael's four buying behaviors depend on buyer involvement and the size of brand differences.
• Early adopters are often opinion leaders, which makes them key targets for new products.
• Business demand is derived from consumer demand and is handled by a buying center.

Formulas and rules

Common mistakes

• Placing reference groups under cultural factors instead of social factors.
• Mixing up dissonance-reducing behavior (few brand differences) with complex buying behavior (big differences).
• Thinking cognitive dissonance happens before purchase; it is a postpurchase feeling.
• Confusing early adopters (13.5%, opinion leaders) with innovators (2.5%, venturesome).
• Forgetting that business demand is derived from consumer demand for final products.

Before the test, make sure you can

• Classify an influence as cultural, social, personal or psychological.
• Apply Maslow's hierarchy and the selective perception processes to marketing examples.
• List the five stages of the buyer decision process and explain cognitive dissonance.
• Identify Assael's four buying behaviors from involvement and brand differences.
• Name Rogers' adopter categories with their percentages and the traits that speed adoption.
• Calculate a weighted multiattribute score to predict brand choice.
• Explain derived demand, buying center roles and the three business buying situations.

Words to know

Consumer buyer behavior

The buying behavior of final consumers: individuals and households that buy for personal consumption.

Culture

The set of basic values, perceptions, wants and behaviors learned by a member of society from family and other institutions.

Subculture

A group of people with shared value systems based on common life experiences and situations.

Reference group

A group that serves as a direct or indirect point of comparison in forming a person's attitudes or behavior.

Opinion leader

A person within a reference group who exerts social influence on others because of special skills, knowledge or personality.

Motive (drive)

A need that is sufficiently pressing to direct the person to seek satisfaction.

Selective attention

The tendency for people to screen out most of the information to which they are exposed.

Selective distortion

The tendency to interpret information in a way that supports what people already believe.

Selective retention

The tendency to remember information that supports one's attitudes and beliefs.

Learning

Changes in an individual's behavior arising from experience, through drives, cues, responses and reinforcement.

Cognitive dissonance

Buyer discomfort caused by postpurchase conflict or doubt about whether the right choice was made.

Complex buying behavior

Buying with high involvement and significant perceived differences among brands.

Habitual buying behavior

Buying under low involvement and few significant brand differences.

Adoption process

The mental process an individual goes through from first learning about an innovation to final adoption.

Derived demand

Business demand that ultimately comes from the demand for consumer goods.

Buying center

All the individuals and units that play a role in the business purchase decision: users, influencers, buyers, deciders and gatekeepers.

Straight rebuy

A business buying situation in which the buyer routinely reorders something without modifications.

New task

A business buying situation in which the buyer purchases a product or service for the first time.

Sample practice questions

30 more questions like these, from level 1 to 5, are in the practice set.