Lecture 2,Buyer Behaviour in
Consumer and Organisational
Markets
Lecture Objectives
?Buyer Behaviour
?Consumer Decision Making Process
?Characteristics of Organisational Buying
2
Understanding customers
How do
they buy?
What are
their choice
criteria?
Customers
Who is
important?
Where do
they buy?
When do
they buy?
The Consumer Decision-Making
Process
Need
recognition/problem
awareness
9
Information
search
Evaluation
Of alternatives
Purchase
Post-purchase
evaluation of
alternatives
Choice Criteria Used When
Evaluating Alternatives
5
Technical-
Reliability
Durability
Performance
Style/looks
Comfort
Delivery
Convenience
Taste
Economic-
Price
Value for money
Running costs
Residual value
Life style costs
Social-
Status
Social belonging
Convention
Fashion
Personal-
Self-image
Morals
Emotions
8
Determinants of the extent of problem solving
Self-image
Perceived risk
Social factors
Hedonism Differentiation
and number of
alternatives
Level of
involvement
Time
pressure
Extent of
problem
solving
The consumer decision-making process
and level of purchase involvement
10
Stage Low Involvement High Involvement
Need recognition
problem awareness Minor
Major personality
important
Information search Limited search Extensive search
Evaluation of
alternatives and the
purchase
Few alternatives
evaluated on few
choice criteria
Many alternatives
evaluated on many
choice criteria
Post-purchase
evaluation of the
decision
Limited evaluation
media search
Extensive evaluation
including media
search
Sony
The importance of
emotion and the
relationship between
feelings and
rationalisations is
highlighted in this
Sony ad.
4
Orange
Marketers use
colour to
convey
meaning in
this
advertisement
11
12
Ford Ka
Marketers
use colour
to convey
meaning in
this
advertise-
ment
Consumer or Organisational Products
Why was the product Purchased?
? For personal or household
use
? For use in the operation of a business or
organisation.
? To manufacture other products
? For resale to others
ORGANISATIONAL
PRODUCT
CONSUMER
PRODUCT
2
Some Examples of Organisational
Buying
? Paper cups by McDonald's
? Computer chips by Toshiba
? Concrete by Local Authorities
? Oil by Electricity Generators
? Fertiliser by Farmers
? Accountancy services by Ltd.,Companies
? TV’s by Comet or Dixons
3
4
Characteristics of Organisational
Buying
Derived demand Negotiations
Risks Reciprocalbuying
Nature and size
of customers
Complexity
of buying
Economic
and technical choice
criteria
Buying to
specific
requirements
Organisational
Purchases
The Buying Centre
Buyer
Decider
(Decision
Maker)
User
Gatekeeper
Influencer
5
Users
actually use the
product,They may
be the one who initiates
the purchase process
and may develop the
product
specification.
Influencers
supply information
and advice,Outsiders
such as consultants
sometimes perform
the role.
Gatekeepers
control the flow
of information to the
buying centre,Purchasing
department Staff frequently
fill the role but it could be
any member
of the
organisation.
Buyers
choose suppliers
and negotiate purchase
terms often reducing
the actual purchase
to a clerical task.
Deciders
(Decision Makers)
have the authority
to approve
the purchase.
6
Buy phases,the organizational
decision-making process
Recognition of a problem (need)
Determination of specification and quantity of needed item
Search for and qualification of potential sources
Acquisition and analysis of proposals
Evaluation of proposals and selection of supplier(s)
Selection of an order routine
Performance feedback and evaluation
8
Vodaphone
Vodaphone recognise
the importance of
economic choice
criteria in
organisational buying
9
Influences on organizational
purchasing behaviour
? straight
re-buy
? modified
re-buy
? new task
Buy class
Organizational
buyer
? product
constituents
? product
facilities
? MROs
Product type
Importance
of purchase
New Task Buying
The organisation makes an initial purchase of
an item to be used to perform a new job or to
solve a new problem,Often this involves
development of specifications for products
and suppliers as well as procedures for future
purchases,High information requirement
from many suppliers.
Example,new IT facility
11
Modified Rebuy
When a new task purchase is changed on
repeat purchases,The buyer may require
faster delivery lower prices or modified
specifications,Regular suppliers become
more competitive and new suppliers may
be included in the selection,Moderate
amounts of information are required.
Example,upgrading office software
12
Straight Rebuy
The buyer purchases the same products
again routinely under approximately the
same terms of sale,Suppliers are
familiar,have provided satisfactory
service in the past and may even have
set up automatic re-ordering systems,
Little information is required,
Example,re-ordering photocopying paper
13
Buying Situation Implications
Ti
me
ta
ke
n f
or
de
cis
io
n
No of people involved in buying centre
Straight
Rebuy
New
Task
Modified
Rebuy
10
14
Reverse marketing
Supplier Buyer
Supplier sells by taking initiative
Buyer takes initiative to persuade supplier to provide
Traditional marketing
Reverse marketing
15
Siemens
Siemens builds
relationships with
companies
around the world
Consumer and Organisational
Markets
Lecture Objectives
?Buyer Behaviour
?Consumer Decision Making Process
?Characteristics of Organisational Buying
2
Understanding customers
How do
they buy?
What are
their choice
criteria?
Customers
Who is
important?
Where do
they buy?
When do
they buy?
The Consumer Decision-Making
Process
Need
recognition/problem
awareness
9
Information
search
Evaluation
Of alternatives
Purchase
Post-purchase
evaluation of
alternatives
Choice Criteria Used When
Evaluating Alternatives
5
Technical-
Reliability
Durability
Performance
Style/looks
Comfort
Delivery
Convenience
Taste
Economic-
Price
Value for money
Running costs
Residual value
Life style costs
Social-
Status
Social belonging
Convention
Fashion
Personal-
Self-image
Morals
Emotions
8
Determinants of the extent of problem solving
Self-image
Perceived risk
Social factors
Hedonism Differentiation
and number of
alternatives
Level of
involvement
Time
pressure
Extent of
problem
solving
The consumer decision-making process
and level of purchase involvement
10
Stage Low Involvement High Involvement
Need recognition
problem awareness Minor
Major personality
important
Information search Limited search Extensive search
Evaluation of
alternatives and the
purchase
Few alternatives
evaluated on few
choice criteria
Many alternatives
evaluated on many
choice criteria
Post-purchase
evaluation of the
decision
Limited evaluation
media search
Extensive evaluation
including media
search
Sony
The importance of
emotion and the
relationship between
feelings and
rationalisations is
highlighted in this
Sony ad.
4
Orange
Marketers use
colour to
convey
meaning in
this
advertisement
11
12
Ford Ka
Marketers
use colour
to convey
meaning in
this
advertise-
ment
Consumer or Organisational Products
Why was the product Purchased?
? For personal or household
use
? For use in the operation of a business or
organisation.
? To manufacture other products
? For resale to others
ORGANISATIONAL
PRODUCT
CONSUMER
PRODUCT
2
Some Examples of Organisational
Buying
? Paper cups by McDonald's
? Computer chips by Toshiba
? Concrete by Local Authorities
? Oil by Electricity Generators
? Fertiliser by Farmers
? Accountancy services by Ltd.,Companies
? TV’s by Comet or Dixons
3
4
Characteristics of Organisational
Buying
Derived demand Negotiations
Risks Reciprocalbuying
Nature and size
of customers
Complexity
of buying
Economic
and technical choice
criteria
Buying to
specific
requirements
Organisational
Purchases
The Buying Centre
Buyer
Decider
(Decision
Maker)
User
Gatekeeper
Influencer
5
Users
actually use the
product,They may
be the one who initiates
the purchase process
and may develop the
product
specification.
Influencers
supply information
and advice,Outsiders
such as consultants
sometimes perform
the role.
Gatekeepers
control the flow
of information to the
buying centre,Purchasing
department Staff frequently
fill the role but it could be
any member
of the
organisation.
Buyers
choose suppliers
and negotiate purchase
terms often reducing
the actual purchase
to a clerical task.
Deciders
(Decision Makers)
have the authority
to approve
the purchase.
6
Buy phases,the organizational
decision-making process
Recognition of a problem (need)
Determination of specification and quantity of needed item
Search for and qualification of potential sources
Acquisition and analysis of proposals
Evaluation of proposals and selection of supplier(s)
Selection of an order routine
Performance feedback and evaluation
8
Vodaphone
Vodaphone recognise
the importance of
economic choice
criteria in
organisational buying
9
Influences on organizational
purchasing behaviour
? straight
re-buy
? modified
re-buy
? new task
Buy class
Organizational
buyer
? product
constituents
? product
facilities
? MROs
Product type
Importance
of purchase
New Task Buying
The organisation makes an initial purchase of
an item to be used to perform a new job or to
solve a new problem,Often this involves
development of specifications for products
and suppliers as well as procedures for future
purchases,High information requirement
from many suppliers.
Example,new IT facility
11
Modified Rebuy
When a new task purchase is changed on
repeat purchases,The buyer may require
faster delivery lower prices or modified
specifications,Regular suppliers become
more competitive and new suppliers may
be included in the selection,Moderate
amounts of information are required.
Example,upgrading office software
12
Straight Rebuy
The buyer purchases the same products
again routinely under approximately the
same terms of sale,Suppliers are
familiar,have provided satisfactory
service in the past and may even have
set up automatic re-ordering systems,
Little information is required,
Example,re-ordering photocopying paper
13
Buying Situation Implications
Ti
me
ta
ke
n f
or
de
cis
io
n
No of people involved in buying centre
Straight
Rebuy
New
Task
Modified
Rebuy
10
14
Reverse marketing
Supplier Buyer
Supplier sells by taking initiative
Buyer takes initiative to persuade supplier to provide
Traditional marketing
Reverse marketing
15
Siemens
Siemens builds
relationships with
companies
around the world
