Marketing Analysis:Consumer Buyer Behaviour Jonathan Freeman
Buyer Behaviour Goals To understand: Models of consumer purchase decision processes. • Influences on purchase decisions: • What • How • Marketing implications of the models.
DefinitionsDibb, Simkin ,Pride and Ferrell • Consumer Buyer Behaviour: “The decision processes and acts of individuals involved in buying and using products.”
Influence purchase probabilities. Develop more effective or efficient marketing mixes. Identify market segments, emerging markets and competitive threats. Why do businesses need to know about their customers?
One Relevant Question: • How do customers decide what to buy?
INPUT INFORMATION PROCESSING DECISION PROCESS INFLUENCES A Model of Consumer Behaviour • Environmental • Influences • Culture • Social Class • Personal • Family • Situation Exposure Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation Stimuli: Marketer Dominated & Other Attention Memory Internal Search Comprehension • Individual • Differences • Resources • Motivation & • Involvement • Knowledge • Attitudes • Personality, Values • & Lifestyle Acceptance Retention Dissatisfaction Satisfaction External Search From: Consumer Behavior (1994). James F. Engel, Roger D. Blackwell & Paul W. Miniard. 7th. Edition. Dryden Press.
Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation A Model of the Buying Decision Process: CONSUMERS
Environmental Influences Culture Social Class Personal Family Situation Individual Differences Resources Motivation & Involvement Knowledge Attitudes Personality, Values & Lifestyle Influences on the PDP
Marketing Influences:The Marketing Strategy. • 4Ps + TM • Product • Price • Promotion • Place integrated to serve a • Target Market
Influences on the Extensiveness of the BDP • Riskiness • Personal relevance • Time Leads to a BDP Continuum
Buying Decision Process Continuum Mid-Range Problem Solving Extended Problem Solving Limited Problem Solving
The full process may not be followed Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation
First Purchase.Extended Problem Solving • Involves all the stages of the PDP • Detailed & rigorous • Preconditions: • Involvement high • Strong differentiation • Time available
First Purchase.Extended Problem Solving • Implications: • In marketing communications argumentation is likely to be more effective than presentation. • Buyers are more likely to notice brand differences
First Purchase.Limited Problem Solving • IS and EA stages limited or missed • Preconditions: • Constrained resources • Low motivation/involvement • Limited perceived differentiation
First Purchase.Limited Problem Solving • Implications: • When involvement is low presentation is more effective than argumentation. • Search limited to known brands; unknown brands are doomed. • Distribution and POP advertising crucial. • Satisfaction leads to habitual purchase out of inertia.
First Purchase.Mid-Range Problem Solving • Between EPS and LPS
Buyer Decision Process: Model and Continuum PR IS EA P PPE EPS PR is ea P PPE MRPS LPS PR is ea P PPE PR P PPE Habit
Buyer Decision Process: DYNAMICS PR IS EA P PPE EPS All else equal, the tendency is for decision-making to become habituated with repetition. PR is ea P PPE MRPS LPS PR is ea P PPE PR P PPE Habit
Buyer Decision Process: Strategic Implication PR IS EA P PPE EPS There’s an advantage to being first in a new market. PR is ea P PPE MRPS LPS PR is ea P PPE PR P PPE Habit
Repeated Purchases • Repeated purchasing tends to habitual decision-making • However, repeated problem-solving can occur e.g. when: • Buyer dissatisfied • Supplier is out of stock
Habitual Decision-Making Reflects either Brand Loyalty or Inertia • Brand Loyalty • Reflects High involvement and perceived differentiation • Highly desired by marketers! • Inertia • Brand switching easily induced by price competition or new claim from competitors
Special Categories of Purchase Decisions • Impulse buying • Variety-seeking
% of Potential Market at each Stage Period 1 Period 2 20 15 10 5 5 30 25 25 5 5 Problem Recognition Information Search Evaluation of Alternatives Purchase Post-Purchase Evaluation Models can be diagnostic.