Marketing: An Introduction

Seventh Canadian Edition

Chapter 05
Understanding Consumer
and Business Buyer
Behaviour

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Consumer Buyer Behaviour and
Consumer Markets
• Consumer behavior
– The study of how individuals, groups, and organizations
select, buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants
– Influenced by cultural, social, personal, and
psychological factors
Consumer market
• All the individuals and households that buy or acquire
goods and services for personal consumption

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Figure 5.1
Consumption Process

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Figure 5.2
Factors Influencing Consumer Behaviour

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Cultural Factors (1 of 2)
Culture is the fundamental determinant of a person’s wants and
behaviors. It is the set of basic values, perceptions, wants and
behaviors learned by a member of society from family and other
important institutions (e.g., Canadians value freedom and have
beliefs in respect and fair treatment).
Sub-culture
• Group of people with shared value systems based on common life
experiences and situations
• Total market strategy integrates ethnic themes and cross-cultural
perspectives within a brand’s mainstream marketing.
Social class
• Relatively permanent and ordered divisions in a society whose
members share similar values, interests, and behaviours
Copyright © 2021 Pearson Canada, Inc. All Rights Reserved
Cultural Factors (2 of 2)

Mukta Advertising LLC (a

leading multi-cultural
marketing agency in
Toronto: https://m-a.ca/)
helps companies reach
South Asian Canadians
with ethnic advertising
and social media
campaigns.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• Sub-cultures include:
Religions
Racial groups
Geographic regions

When sub-cultures grow large and affluent enough, companies often

design specialized marketing programs to serve them.

E.g., https://www.tntsupermarket.com/eng

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Social class members (members share similar values, interests, and
behaviors) show distinct product and brand preferences in many
areas, including clothing, home furnishings, leisure activities,
and automobiles. They also differ in media preferences. The
most common being the upper, middle and lower classes. Most
Canadians see themselves as middle class.

The lines between social classes are not fixed and people can move
to a higher social class or drop into a lower class.

Caste system in India?

A caste is a fixed social group into which an individual is born within a
particular system of social stratification: Brahmin, Kshatriya, Vaishya, Shudra
, Dalits

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Social Factors
• Reference groups
• Family
• Roles and status

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

 Reference Groups
• A person’s reference groups are all the groups that have a direct
(face-to-face) or indirect influence on his/her attitudes or
behaviors.
• Groups having a direct influence are called membership groups.
Some of these are primary groups with whom the person
interacts fairly continuously and informally, such as family,
friends, neighbors, etc. Secondary groups (such as professional,
and trade-union groups, which tend to be more formal and
require less continuous interaction)
• Opinion leader (is the person who offers informal advice about a
specific product)

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

 Roles and status

A working mother plays the role of wife and mother in her family.
As a marketing manager, she will buy the kind of clothing that
reflects her role and status in her company.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Personal Factors (1 of 2)
• Occupation
• Age and family life-cycle
• Economic situation
• Lifestyle
• Personality and self-concept

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• People change the goods and services they buy over their
lifetimes. Tastes in food, clothes, furniture, and recreation are
often age related.
• Blue-collar workers tend to buy more rugged work clothes,
where white-collar workers buy more business suits.
• Lifestyle is a person’s pattern of living and it involves measuring
consumers’ major AIO dimensions- activities (e.g., work,
hobbies, sports), interests (e.g., food, fashion, recreation), and
opinions (e.g., social issue, business, products).
• Personality is usually described in terms of traits such as self-
confidence, dominance, sociability, defensiveness,
aggressiveness, etc.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Psychological Factors
• Motivation
• Perception
• Learning
• Beliefs and Attitudes

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

 Motivation
• A person has many needs at any given time. A need
becomes a motive when it is aroused to a sufficient level of
intensity to drive us to act.

• Freud’s Theory
– Behavior is guided by subconscious motivations
• Maslow’s Hierarchy of Needs
– Behavior is driven by lowest, unmet need
• Herzberg’s Two-Factor Theory
– Behavior is guided by dis-satisfiers and satisfiers

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• Sigmund Freud assumed that the psychological forces shaping
people’s behavior are largely unconscious, and that a person
cannot fully understand his/her own motivations.

• Abraham Maslow sought to explain why people are driven by

particular needs at particular time. People will try to satisfy their
most important needs first and then try to satisfy the next
important. For example, a starving man will not take an interest
in the latest happenings in the art world.
• Purchase organic food? Purchase BMW?

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Figure 5.3
Maslow’s Hierarchy of Needs

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• One criticism of Maslow’s theory involves the order of needs
within the hierarchy. Some critics say that while it is logical to
put physiological needs first and self-actualization last, people
do not necessarily pursue or obtain the needs in this order.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• Herzberg developed a two-factor theory that distinguishes dis-
satisfiers (factors that cause dissatisfaction) from satisfiers
(factors that cause satisfaction). The absence of dis-satisfiers
(e.g., computer warranty) is not enough to motivate a purchase.
Satisfiers (e.g., ease of use) must be present.
• E.g., a computer that does not come with a warranty is a
dissatisfier. Yet the presence of product warranty does not act as
a satisfier or motivator of a purchase because it is not a source of
intrinsic satisfaction. Ease of use is a satisfier.
• Implications: (1) Sellers should do their best to avoid
dissatisfiers (2) the seller should identify the major satisfiers in
the market and then supply them.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• Perception
– The process by which we select, organize, and interpret
information inputs to create a meaningful picture of the
world.

Selective attention: people are more likely to notice stimuli that relate to a
current need. People are more likely to notice stimuli they anticipate
Selective distortion: consumers will often distort information to be consistent
with prior brand and product beliefs and expectations. E.g., coffee tastes better
from Second Cup, even though the quality has been declined. For marketers and
advertisers, knowing how selective distortion can change the interpretation of
advertisements.
Selective retention: we’re likely to remember good points about a product we
like and forget good points about competing products.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• Learning
– Induces changes in our behavior arising from experience.
Learning theorists say that most human behavior is learned.
– If the experience of using Nikon camera is rewarding, the
consumer will probably use the camera more and more, and
his or her response will be reinforced.
– Through experience and learning, people acquire beliefs and
attitudes
• A belief means a descriptive thought that an individual holds
about something. People get beliefs and attitudes through their
learning and doing things. These, in turn, influence their buying
behavior

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Figure 5.4
Buyer Decision Process

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Problem recognition
The buyer recognizes a problem/need triggered by
internal/external stimuli

Information search
Personal sources
Commercial sources
Public sources
Experiential sources

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Evaluation of Alternatives

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

 Multi-Attribute Model
• This model holds that consumers use product attributes that are
important to them, to evaluate and compare alternative offerings
of firms in their consideration set. Each attribute has an
important weight. A higher weight means that the attribute is
more important. For example, let’s assume that Paul has four
attributes in his consideration set: memory capacity, graphics
capability, size and weight, and price.

• The multi-attribute model assumes that consumers can evaluate

all important attributes before purchase. However, this is not
often the case. (e.g., washing machine, TV, car, etc.)
• Many services are difficult to evaluate before purchase.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• Using the linear compensatory rule, Paul computes a total score for each
laptop computer brand. Suppose Paul assigned 40% of the importance to
memory capacity, 30% to graphics capability, 20% to size and weight, and 10%
to price. We multiply by Paul’s beliefs about each computer’s attributes.

Laptop A = 0.4x8 + 0.3x9 + 0.2x6 + 0.1x9 = 8.0

Laptop B = 0.4x7 + 0.3x7+ 0.2x7 + 0.1x7 = 7.0
Laptop C = 0.4x10 + 0.3x4 + 0.2x3 + 0.1x2 = 6.0
Laptop D = 0.4x5 + 0.3x3 + 0.2x8 + 0.1x5 = 5.0

Based on linear compensatory rule, Paul will favor laptop A, which (at 8.0) has
the highest score.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• In the conjunctive rule, the consumer will make the decision
based on the total overall score in conjunction with minimum
performance level on one or several attributes. For example,
Paul may only consider a laptop computer that scores a
minimum of 9 for memory capacity. The choice would be laptop
C. (how about a minimum of 8 for memory capacity)

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Post-purchase behaviour
Postpurchase customer
satisfaction is a key to
building profitable
customer relationships.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Stages in the Adoption Process
• Awareness
• Interest
• Evaluation
• Trial
• Adoption

Self-driving car

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Figure 5.5 Adopter Categories Based on
Relative Time of Adoption of Innovations

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• The five adopter groups have differing values. Innovators try
new ideas at some risk. Early adopters are opinion leaders in
their communities and adopt new ideas early but carefully. Early
mainstream adopters adopt new ideas before the average person.
Late mainstream adopters adopt an innovation only after a
majority of people have tried it. Finally, lagging adopters adopt
the innovation only when it has become something of a tradition
itself.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Characteristics Influencing an Innovation’s Rate of Adoption

• Relative advantage is the degree to which the innovation

appears superior to existing products. (e.g., 5G vs 4G)
• The second characteristic is compatibility, which is the degree
to which the innovation fits the values and experiences of
potential consumers.
• The third characteristic is complexity, which refers to the degree
to which the innovation is difficult to understand or use.
• The fourth characteristic is communicability. This refers to the
degree to which the results of using the innovation can be
observed or described to others.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Business Buyer Behaviour
• Business buyer behaviour
– Purchasing goods and services are used in the
production of other products and services
• Business-to-business (B-to-B) marketers must
understand business markets and business buyer
behaviour
• Business buying process: Determining which
products and services to purchase
– Finding, evaluating, and choosing among alternative
suppliers and brands

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Business Markets
• Business markets are huge and involve more money
and items than consumer markets.
• Differ from consumer markets in terms of
– Market structure and demand
– Nature of the buying unit
– Types of decisions and the decision process

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Market Structure and Demand
• Business market structure and demand
– Fewer but larger buyers
– Derived demand: Business demand that comes from
the demand for consumer goods
– Inelastic (the total demand for many business products
is not much affected by price change, especially in the
short run) and fluctuating demand

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Nature of the Buying Unit
• Nature of the business market buying unit
– More decision participants (e.g., technical experts, top
management)
– More professional purchasing effort

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Types of Decisions
• Business purchases
– More complex buying decisions
– Large sums of money
– Complex technical and economic considerations
– Interactions among people at many levels of the buyer’s
organization

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Decision Process
• Buying processes
– Longer and more formalized procedures (e.g., written
purchase orders, detailed product specifications).
– Buyer and seller more dependent on each other
• Supplier development: Systematic development of
networks of supplier-partners to ensure a dependable
supply of products and materials

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Figure 5.6 A Model of Business Buyer
Behaviour

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Types of Buying Situations (1 of 2)
Straight rebuy
• Buyer routinely reorders something without any modifications
Modified rebuy
• Buyer wants to modify product specifications, prices, terms, or
suppliers
New task
• Buyer purchases a product or service for the first time
Systems selling (or solutions selling)
• Buying a packaged solution to a problem from a single seller
• Avoids the separate decisions involved in a complex buying
situation

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Types of Buying Situations (2 of 2)
Solutions selling: IBM
works with Six Flags to
provide a complete
solution.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Figure 5.8 Stages of the Business Buyer
Decision Process

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

E-Procurement and Online Purchasing
• Purchasing through electronic connections between
buyers and sellers—usually online
• E-procurement occurs through
– Reverse auctions
– Online trading exchanges
– Company buying sites
– Extranet links with key suppliers

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Benefits and Problems of E-
Procurement
• Benefits
– Cuts transaction costs
– Results in efficient purchasing for both buyers and
suppliers
– Reduces the time between order and delivery
– Helps an organization keep better track of all purchases
– Frees buyers from a lot of paperwork
• Problems
– Can affect the customer-supplier relationship
– Pits suppliers against one another

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• Business-to-business e-procurement yields many benefits. First,
it saves transaction costs and results in more efficient purchasing
for both buyers and suppliers. Second, E-procurement reduces
the time between order and delivery, and eliminates the
paperwork associated with traditional requisition and ordering
procedures. It helps an organization keep better track of all
purchases. Finally, e-procurement frees purchasing people from
a lot of drudgery and paperwork.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

• However, the rapidly expanding use of e-procurement also
presents some problems. At the same time that the Internet
makes it possible for suppliers and customers to share business
data and even collaborate on product design, it can also erode
decades-old customer-supplier relationships. Buyers now use the
power of the Internet to pit suppliers against one another and
search out better deals, products, and turnaround times on a
purchase-by-purchase basis.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved

Business-to-Business Digital and
Social Media Marketing
• B-to-B marketers are now using a wide range of
digital and social media marketing approaches.
• Compared with traditional media and sales
approaches, digital and social media can create
greater customer engagement and interaction.

Copyright © 2021 Pearson Canada, Inc. All Rights Reserved