Consumer Behaviour B2B

Consumer Behaviour
B2B
Consumer Behavior
It is the study of how individuals make decisions to
spend their available resources (time, money, effort) on
consumption related items. It includes the study of-
-what they buy-gel, regular, striped, in a tube,
-why they buy it-to prevent cavities, to remove stains, to
whiten teeth, to use as a mouth wash
-What brand-national, private
-where they buy it from-supermarket, drug store,
convenience store
-how often they buy it-weekly, biweekly, monthly
-how often they use it-when they wake, after each meal,
when they go to bed
7 Os of Consumer Behavior
1) Who is the consumer (Occupants)
2) What does he buy (Object)
3) Why is the consumer buying (Objective)
4) When do they buy, how often do they buy,
when do they use and how often do they use
(Occasion)
5) Where do they buy (Outlet)
6) How do they buy (Operations)
7) Who is involved (Organization)
Factors Influencing Buying Behavior
1. Cultural Factors
i. Culture
ii. Sub culture
iii. Social class
2. Social Factors
i. Family
ii. Reference groups
iii. Roles and statuses
iv. Cliques
3. Personal Factors
i. Age and life cycle stage
ii. Occupation
iii. Economic circumstances
Reference Groups
• Membership groups- Groups having a direct
influence
– Primary-as family, friends, neighbors & coworkers
– Secondary-as religious, professional, and trade-
union groups
• Aspirational groups- are those a person hopes to
join
• Dissociative groups-are those whose values or
behavior an individual rejects
• Opinion leader-An opinion leader is the person
who offers informal advice or information about
a specific product or product category
Model Of Consumer Behavior
Key Psychological Processes
1. MOTIVATION
A. Freud’s Theory
The well-known psychoanalyst, Sigmund Freud,

provided the earliest explanation of human
motivation. According to him man learns from his
environment. Taking a cue from a child, Freud said
that a child is uninhibited in his behaviour until the
time he or she is taught the worldly ways by his or
her parents. Gradually, as the child grows he starts
behaving in a manner, which is socially acceptable.
B. Maslow’s Theory
C. Herzberg’s Theory
Two factor theory that distinguishes dissatisfiers
(factors that cause dissatisfaction) from satisfiers
(factors that cause satisfaction).
- sellers should do their best to avoid

dissatisfiers.
- the seller should identify the major satisfiers or

motivators of purchase in the market and then
supply them.
2. Perception- The process by which we select, organize, and interpret
information inputs to create a meaningful picture of the world
Selective attention- Selective attention means that marketers must work

hard to attract consumers’ notice. People are more likely to notice stimuli
that relate to a current need.
Selective distortion- Consumers will often distort information to be

consistent with prior brand and product beliefs and expectations.
Selective retention- we’re likely to remember good points about a

product we like and forget good points about competing products.
Subliminal perception- Subliminal perception has long fascinated

armchair marketers, who argue that marketers embed covert, subliminal
messages in ads or packaging. Consumers are not consciously aware of
them, yet they affect behavior.
3. Learning-Learning theorists believe learning is
produced through the interplay of drives, stimuli,
cues, responses, and reinforcement.
– Induces changes in our behavior arising from
experience
– Drive and cues
– Generalization and discrimination
4. Emotions
– Many different kinds of emotions can be linked to
brands
– An emotion-filled brand story has been shown to
trigger’s people desire to pass along things they
hear about brands, through either word of mouth or
online sharing.
5. Memory
– Short-term vs. long-term memory
– Associative network memory model
– Brand associations
– Memory encoding
– Memory retrieval
Decision Making Process
1) Problem recognition- when a customer has
an unfulfilled need
2) Information search- customer will collect the

information from different sources
Personal sources- family, friends, neighbors,

acquaintes
Commercial sources- advertising, salesperson,

dealers, displays, packaging
Public sources- mass media, consumer rating
organizations
Experiential sources- handling, examining, using

the product
3) Evaluation of alternatives- customers trying

to satisfy a need, customers looking for certain
benefits from the product solution, customer sees
each product as a bundle of attributes
Total Awareness Consideration Choice Decision

set set set set set
Expectancy-Value Model
Consumer’s Brand Belief about Laptop Computers
4) Purchase decision
– Compensatory vs. noncompensatory models
Conjunctive heuristic-
Using the conjunctive heuristic, the consumer sets a minimum
acceptable cutoff level for each attribute and chooses the first
alternative that meets the minimum standard for all attributes.
Lexicographic heuristic-
With the lexicographic heuristic, the consumer chooses the best brand
on the basis of its perceived most important attribute.
Elimination-by-aspects heuristic-
the consumer compares brands on an attribute selected
probabilistically—where the probability of choosing an attribute is
positively related to its importance—and eliminates brands that do not
meet minimum acceptable cutoffs.
Purchase Decision
Attitudes of
others
Post
Post Purchase
Evaluation of Purchase Behavior
Decision
Alternative Intention
Unanticipated
Situational factors
5) Post Purchase Behavior Information and Experience
Pre Purchase Expectation

use
Performance
Satisfied +ve WOM Dissatisfied

Repurchase Intention
Complainer Non-Complainer
• Dealer • -ve WOM
• Court • Brand
• Manufacturer Switching
Satisfaction is Dissatisfied
found • -ve WOM
• Brand Switch
Increase in Sale
Decrease of sale
And Market share
and reduction in
market share
Customer Product Use/Disposal
Buying Behavior Types
Higher Involvement Lower Involvement
Significant Complex buying behavior Variety Seeking

differences e.g. Car, PC, Electronic buying behavior
among products e.g. Biscuits,
brands Soaps
Dissonance reducing Habitual buying

buying behavior behavior
e.g. Carpets, Jewellery, e.g. salt
Furniture
Behavioral Economics-behavioral decision theory (BDT). Behavioral decision
theorists have identified many situations in which consumers make seemingly
irrational choices.
• Decision Heuristics
– Availability heuristic: a recent product failure may lead consumers to
inflate the likelihood of a future product failure and make them more
inclined to purchase a product warranty.
– Representativeness heuristic: One reason package appearances may
be so similar for different brands in the same product category is that
marketers want their products to be seen as representative of the
category as a whole.
– Anchoring and adjustment heuristic: For services marketers, a strong
first impression is critical to establishing a favorable anchor so
subsequent experiences will be interpreted in a more favorable light.
• Framing
– Mental accounting- describes the way consumers code, categorize, and
evaluate financial outcomes of choices. Mental accounting is based on a
set of core principles:
1. Consumers tend to segregate gains. When a seller has a product with more
than one positive dimension, it’s desirable to have the consumer evaluate each
dimension separately. Listing multiple benefits of a large industrial product, for
example, can make the sum of the parts seem greater than the whole.
2. Consumers tend to integrate losses. Marketers have a distinct advantage in

selling something if its cost can be added to another large purchase. House
buyers are more inclined to view additional expenditures favorably given the
already high price of buying a house.
3. Consumers tend to integrate smaller losses with larger gains. The

“cancellation” principle might explain why withholding taxes from monthly
paychecks is less painful than making large, lump-sum tax payments—the
smaller withholdings are more likely to be overshadowed by the larger pay
amount.
4. Consumers tend to segregate small gains from large losses. The “silver
lining” principle might explain the popularity of rebates on big-ticket purchases
such as cars.
Organizational Buying (B2B)
• Business market
– Consists of all the organizations that acquire
goods and services used in the production of
other products or services that are sold,
rented, or supplied to others
Buying Situations
Straight Rebuy- the purchasing department reorders items like office
supplies and bulk chemicals on a routine basis and chooses from suppliers
on an approved list.
Modified Rebuy-the purchasing department reorders items like office

supplies and bulk chemicals on a routine basis and chooses from suppliers
on an approved list.
New Task-A new-task purchaser buys a product or service for the first time
(an office building, a new security system).
The buying center (Buying Roles)
1. Initiators—Users or others in the organization who request that something be
purchased.
2. Users—Those who will use the product or service. In many cases, the users initiate
the buying proposal and help define the product requirements.
3. Influencers—People who influence the buying decision, often by helping define
specifications and providing information for evaluating alternatives. Technical people
are particularly important influencers.
4. Deciders—People who decide on product requirements or on suppliers.
5. Approvers—People who authorize the proposed actions of deciders or buyers.
6. Buyers—People who have formal authority to select the supplier and arrange the
purchase terms. Buyers may help shape product specifications, but they play their
major role in selecting vendors and negotiating. In more complex purchases, buyers
might include high-level managers.
7. Gatekeepers—People who have the power to prevent sellers or information from
reaching members of the buying center. For example, purchasing agents, receptionists,
and telephone operators may prevent salespersons from contacting users or deciders.
Stages in the Buying Process
Buygrid Framework: Major Stages of Industrial Process in relation to Major Buying
Situations
Stages in the Buying Process
1. Problem recognition
– Someone in the company recognizes a
problem or need that can be met by acquiring
a good or service
2. General need description
3. Product specification
– Next, the buyer determines the needed item’s
general characteristics, required quantity, and
technical specifications
4. Supplier search
Catalog Vertical
sites markets
Buying “Pure Play”

alliances auction
Private Spot & barter

exchanges markets
E-procurement
• Vertical hubs
• Functional hubs
• Direct extranet links to major suppliers
• Buying alliances
• Company buying sites
5. Proposal solicitation
– The buyer next invites qualified suppliers to
submit written proposals
6. Supplier selection
– Before selecting a supplier, the buying center
will specify and rank desired supplier
attributes
Supplier-Evaluation Model
An Example of Vendor Analysis
7. Order-routine specification
– After selecting suppliers, the buyer negotiates the final order,
listing the technical specifications, the quantity needed, the
expected time of delivery, return policies, warranties, etc.
8. Performance review
– The buyer periodically reviews the performance of the
chosen supplier(s)

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Consumer Behaviour

The well-known psychoanalyst, Sigmund Freud,

- sellers should do their best to avoid

- the seller should identify the major satisfiers or

Selective attention- Selective attention means that marketers must work

Selective distortion- Consumers will often distort information to be

Selective retention- we’re likely to remember good points about a

Subliminal perception- Subliminal perception has long fascinated

2) Information search- customer will collect the

Personal sources- family, friends, neighbors,

Commercial sources- advertising, salesperson,

Experiential sources- handling, examining, using

3) Evaluation of alternatives- customers trying

Total Awareness Consideration Choice Decision

Pre Purchase Expectation

Satisfied +ve WOM Dissatisfied

Significant Complex buying behavior Variety Seeking

Dissonance reducing Habitual buying

2. Consumers tend to integrate losses. Marketers have a distinct advantage in

3. Consumers tend to integrate smaller losses with larger gains. The

Modified Rebuy-the purchasing department reorders items like office

Buying “Pure Play”

Private Spot & barter

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