CONSUMER BUYING vs. ORGANIZATIONAL BUYING

Final (or ultimate) consumers purchase for:

• personal,
• family, or
• household use

Organizational consumers purchase for:

• further production,
• usage in operating the organization, and/or
• resale to other consumers

Consumer Buying Behavior
the decision processes and acts of final household consumers associated with evaluating, buying, consuming, and discarding products for personal consumption

Consider the purchase an automobile.  You generally will not consider different options until some event triggers a need, such as a problem needing potentially expensive repair.  Once this need has put you "on the market", you begin to ask your friends for recommendations regarding dealerships and car models.  After visiting several dealerships, you test drive several models and finally decide on a particular model.  After picking up your new car, you have doubts on the way home, wondering if you can afford the monthly payments, but then begin to wonder if instead you should have purchased a more expensive but potentially more reliable model. 
Over the next five years, the car has several unexpected breakdowns that lead you to want to purchase a different brand, but you have been very happy with the services of the local dealership and decide to again purchase your next car there.

In this particular case, the following generic model of consumer decision making appears to hold:

=====>need recognition
     =====>information search
         =====>evaluation of alternatives
             =====>purchase decision
                 =====>postpurchase behavior

Now consider the purchase of a quart of orange juice.  You purchase this product when you do your grocery shopping once per week.  You have a favorite brand of orange juice and usually do your grocery shopping at the same store.  When you buy orange juice, you always go to the same place in the store to pick it up, and never notice what other brands are on the shelf or what are the prices of other brands.  How is it that the generic model above works differently in this second scenario?  Why does it work differently?  How can the marketer of orange juice get a consumer like you to exert more effort into information search or to consider alternative products?  How is it that the marketer of your brand got you to ignore alternative competing brands?

Consumer behavior researchers are not so interested in studying the validity of the generic model, but are more interested in various factors that influence how such a model might work.

INFLUENCES ON THE GENERIC MODEL

• external
  • group
    -e.g., cultural, family, reference group influences
  • environmental/situational
    -e.g., time of day, temperature and humidity, etc.

• internal
  
  • lifestyle, personality, decision making process, motivation, etc.

GROUP INFLUENCES ON CONSUMER BEHAVIOR

Culture
the set of basic values, beliefs, norms, and associated behaviors that are learned by a member of society

Note that culture is something that is learned and that it has a relatively long lasting effect on the behaviors of an individual.  Also note issues of subculture.

Social Class
a group of individuals with similar social rank, based on such factors as occupation, education, and wealth

Reference Groups
groups, often temporary, that affect a person's values, attitude, or behaviors

• e.g., your behaviors around colleagues at work are probably different from your behaviors around your parents or your own family members
• opinion leader
  a person within a reference group who exerts influence on others because of special skills, knowledge, personality, etc.
  • You might ask the webmaster at work for an opinion about a particular software application.  Software manufacturers often give away free beta copies of software to potential opinion leaders with the hope that they will in turn influence many others to purchase the product.

Family
a group of people related by blood, marriage, or other socially approved relationship

ENVIRONMENTAL/SITUATIONAL INFLUENCES ON CONSUMER BEHAVIOR
circumstances, time, location, etc.

Do you like grapes? Do you like peas?

You might like grapes as a snack after lunch, but probably not as a dessert after a fancy meal in a restaurant.  You might like peas, but probably not as a topping on your pancakes.  Everyday situations cause an interaction between various factors which influence our behaviors.

If you are doing your Saturday grocery shopping and are looking for orange juice, you are probably much more sensitive to price than if you stop at the quick store late at night, perhaps when you are tired and cranky after an evening college class.

If you are shopping for a gift for a friend, you probably will not be looking through the scratch-and-dent bargain bins, but might first shop at more pricey specialty stores.  If you are shopping for a needed item for yourself, however, you might be delighted to get a good price on something that has a damaged box or cosmetic flaw.

INTERNAL INFLUENCES ON CONSUMER BEHAVIOR

personality
a person's distinguishing psychological characteristics that lead to relatively consistent and lasting responses to stimuli in the environment

We are each unique as individuals, and we each respond differently as consumers.  For example, some people are "optimizers" who will keep shopping until they are certain that they have found the best price for a particular item, while other people are "satisfiers" who will stop shopping when they believe that they have found something that is "good enough."

lifestyle and psychographics

• lifestyle is a pattern of living expressed through a person's activities, interests, and opinions

• psychographics is a technique for measuring personality and lifestyles to developing lifestyle classifications

PERCEIVED RISK

• physical
• functional
• financial
• social
• psychological
• time

ATTITUDE
a person's consistently favorable or unfavorable evaluations, feelings, beliefs, and behaviors toward an object

The measurement of a person's attitude toward an object, such as a product under development, is presumed to suggest future behaviors, such as the likelihood that a person would purchase the proposed new product.

TYPES OF CONSUMER PROBLEM-SOLVING PROCESSES

routenized

• used when buying frequently purchased, low cost items
• used when little search/decision effort is needed
• e.g., buying a quart of orange juice once per week

limited problem solving

• used when products are occasionally purchased
• used when information is needed about an unfamiliar product in a familiar product category

extended problem solving

• used when product is unfamiliar, expensive, or infrequently purchased
• e.g., buying a new car once every five years

These types of problem solving are influenced by

• product knowledge

• involvement

involvement has to do with an individual's

• intensity of interest in a product and the
• importance of the product for that person

The purchase of a car is much more risky than the purchase of a quart of orange juice, and therefore presents a higher involvement situation.  This modifies the way that the generic model works.

ALTERNATIVE EVALUATION

consideration set
products or brands that come to mind as alternatives for possible purchase

Marketers are often interested in maintaining top of mind awareness.  We often see commercials on TV for brands of which are already famous and about which there is nothing new to learn.  The marketers for those products are not trying to tell us anything new about the product and are not trying to persuade us that their product is any better than we already believe it to be.  They are simply trying to maintain top of mind awareness for that brand.  The brands that are at the top of the consideration set in household consumer situations more likely to be purchased than those farther down on the list.  The next time you are on a long car trip and want to stop for fast food, notice which brands come to mind first.  For most people, these will be brands that more heavily advertise.

POST PURCHASE BEHAVIOR

Marketers are interested in what happens after you purchase and after you consume a product.  If you have problems with a new car, you will begin to form bad attitudes about the brand.  You won't be back to buy a new one in five years, but you also will try to convince your friends, relatives, and acquaintances that this is not a good brand.  The attitudes that you form from consumption of the product and from the experiences of others are just as important as the attitudes that you form from product promotions.  Marketers should be especially careful to maintain control over cognitive dissonance.

cognitive dissonance
a buyer's concerns about a decision immediately after a purchase

Recall an experience in purchasing a new car, purchasing an expensive household appliance, or signing a one-year lease on an apartment.  After the purchase, you probably worried for a day or two about whether or not you made the best decision.  If you purchased the lowest price car, perhaps you are worried that it will not be reliable or will not maintain its resale value.  If you purchased the more expensive model, perhaps you are worried that you paid more than the average price or that you will not be able to afford the payments or that you will not be able to afford to maintain it. 

It is perfectly normal and typical for a buyer to have these feelings and doubts, but the marketer must ensure that the initial postpurchase experience is perceived as positive.  If the car buyer has experienced any doubtful feelings and something does eventually go wrong with the car, s/he will not be a happy customer when visiting to the service department.  When handing over the keys to the new car, the sales person should congratulate the new buyer by confirming that the choice was a good one  The salesperson should call back a few days later to make sure that everything is OK and to again congratulate the buyer with a confirmation that the choice was a good one.