Consumer Buying Behaviour Essay

1.1 IntroductionWhat do we mean if we argon talking to the highest degree consumer bargain foring behaviour?There be several(prenominal) conclusion military operati angiotensin converting enzymes and acts of deal (consumers) debaseingand using increases for themselves or their kinsfolk. These soures might be very pas sequenceing for companies and their merchandising managers.But what argon the reasons why grocery storeers should know closely consumer purchase behaviour?-Well, on that point are several reasonsAt first it is measur subject to know intimately the reaction of the buyer to the firms trade strategy beca social occasion this has a great influence on the firms success.An early(a) thing is that the firm deal pee-pee an almost perfect marketing mix to return the customer.The third reason is that its lots easier for the marketers, if they know about the buying behaviours, to predict the reaction of consumers on marketing strategies.On the interest page s I requirement to give a short overview about Consumer Buying Behaviour and Organisational Markets and Buying Behaviour.1.2 Types of Consumer Buying BehaviourConsumers always want to create an assortment of products which satisfies their take and wants in the present and as well as in the future. To realise this aim, the consumer has to make a lot of arrestings. These buying decisivenesss can be classified into troika main categories of closingsRoutine Response BehaviourThis behaviour happens when the consumer regularly buys cheap products that need very little search and also very little decision effort. In this case the consumer prefers a special grease but he also knows other brands of the same product class to start out an extrapolatenative to buy if there is something wrongwith his favourite brand.Limited Decision MakingThis is the case if the consumer buys a product occasionally or if there is a new brand, he doesnt know about, in a familiar product category.For thi s oddball of decision-making, the consumer inescapably a moderate amount of time for gathering information and deliberation.protracted Decision-MakingThis is the most complex decision-making behaviour. It happens when a bribe includes unfamiliar, expensive or infrequently bought products for fashion model simple machines, ho phthisiss etc.The buyer uses a lot of time for evaluating alternative brands or choices and also for seek information.A big contrast to the extensive decision-making processes that were mentioned earlier is the behaviour of the impulse buyers. These people do not plan conscious to buy, they have a persistant urge to buy something immediately if they like it. But often these people give rise in emotional conflicts, they often feel guilty because of their curb finances or something else.1.3 The Consumer Buying Decision ProcessAs I mentioned earlier, the decision process is a major part of buying behaviour. This decision process can be divided into five s ymbolizesProblem RecognitionThis occurs when the buyer notices that there is a difference between the desired state and the actual conditions. The consumer gets alert that he has to change something to get satisfactory.For example, if somebody needs a car to get to work and one day the car stops working. In this blank space the person recognises that there is a difference between the desired state (a working car) and the actual condition (a broken car).Information SearchAfter recognising the problem, the buyer searches for information about a new product which can clear up his problem and also is able to satisfy his need (this is wholly the case if the decision process continues). For example, the above-mentioned car owner, after recognising the need for a new car, he may search for information about divergent brands and types of cars.Here we check off two aspects to an information searchIn the cozy search, buyers check first if they have any information about theneeded p roduct in their memory.If they cannot get enough information from their memory for a decision, they are looking for more than information in an external search. In the external search the buyer may focus on communication with friends or relatives, to hear about their experiences with special brands. He also can obtain information from public sources like manufacturers, salespersons or product-test organisations.Evaluation of AlternativesTo evaluate the products of which the buyer got information he is looking for criteria to compare the products. These criteria are for example characteristics or features that the buyer wants (or does not want). In the example of our car buyer these features could be if the car has an airbag, electrical window control or air-conditioning system.The buyer also thinks about how important each criterion is because some features may carry more weight than others.This evaluation of the consumer can be influenced by the marketer by framing the alternative s that meaning the manner how the marketer describes the product and its features. bargain forIn this stage the consumer chooses the product or brand which he wants to buy. This selection is based on the result of the previous evaluation stage. There is also a roach of criterions which must be wagesn into accountOne of the most important criterions is the product availability which may influence which brand is procured. If the favourite brand is not available at the moment the consumer may choose the brand that is ranked second.Other criterions that also could be important for the consumer are for example the price, delivery, guarantees, upkeep agreements, installation and credit arrangements.Post purchase evaluationAfter the purchase the buyer begins to check the product if the actual performance meets the expected level. In this stage many of the criteria used in the evaluating alternatives stage are used again. The result is either pleasure or dissatisfaction.1.4 Personal factors influencing the buying decision processThe purchasing decision can be influenced by a lot of personal factors, which means factors that are unique to only one person. There are trey categories of personal factorsDemographic factorsSituational factorsLevel of involvementDemographic factorsThese factors are man-to-man characteristics such as age, sex, race, ethnic origin, income, family life-cycle, and occupation.Demographic factors influence in which extent a person buys or uses products in a specific product category. For example consumers between 15 and 24 years often prefer to buy household basics because they have to establish their own household. Whereas people aged between 45 and 54 years often spend more money on luxury and leisure products the reason for this is that these people have more money, because their children have left home.Situational factorsSituational factors are the external conditions that exist when a consumer is making a purchase decision. Sometimes a consumer decides to buy something as a result of an unexpected situation. For example, a person may buy hurriedly buy a shroud ticket to spend the abide days with a dangerously ill relative. But it is also realistic that a person terminates the buying decision process because of situational factors. For example, when the consumer decided to buy something and because of external circumstances he does not need it anymore.Level of involvementThe level of involvement means the importance and intensity of interest in a product in a particular situation. The buyers level of involvement determines if he or she is interested in seeking information about certain products or brands. Consumers seem to be more involved in the purchase ofhigh-priced goods and of products that are visible to others, such as clothing, furniture, or cars. So the consumers are more interested to gain more information in this product categories.1.5 Psychological factors influencing the buying decision processIn addition to the personal factors there are also psychological factors that can influence the buying decisions. The five psychological influences on consumer behaviour are intuitionPerception is the process of selecting, organising and interpreting information inputs to produce meaning. These information inputs are received through sight, taste, hearing, smell and touch that means with all of our five smell outs.MotivesA motive is an internal feeling that forces a person to satisfy a need or to achieve a goal.If a person buys something this activity is bear upon by a set of motives at this moment some of the motives in the set have priority, but the priority of the motives also can vary from one time to some other.It is very important for the marketers to know about the motives of their customers there is only the problem that most people do not know why they buy a particular product.The solution for this are special manakins of interviews in which the interviewer wants to gain, in an informal atmosphere, information about the consumers motives. But this topic is very complicated, so I would not like to go into this more nearlyAbility and knowledgeEvery person has got assorted abilities one ability that is very important for marketers is the individuals capacity to light upon. Because learning may change a persons buying behaviour by gaining new information and experience. For example when a consumer buys a particular product and he likes it, he is more likely to buy the same product the next time. But if the consumer is not satisfied by the product he will switch to a different brand.another(prenominal) aspect of an individuals ability is knowledge. Knowledge can be divided into two components familiarity with the product and expertise together this means the individuals ability to use the product. For example if a consumer does not know about a special kind of product he will not buy it and if he knows about the product but does not know how to use it he also will not buy it.AttitudeAttitude refers to knowledge and positive or negative feelings about an object or activity. These objects or acts may be touchable or untouchable, living or non-living. For example people have attitudes towards sex, religion, politics, and music (all untouchable) but also towards cars, football, or pizza. People learn these attitudes through experience and also through relations to other people. Likewise people have attitudes towards companies and their products, so the aim for the companies marketing-strategy should be to give the customer a good feeling about the company an her products. In other words, the company should try to influence the customers attitude.PersonalityEvery person is unique, because of internal traits and behaviours. Marketing managers suspect that there are communities between peoples traits, and so they are searching for them to find relationships among these similarcharacteristics and the buying behaviour. The aim is to find out which kind of consumer prefers which types of brands and products. With this knowledge marketers can try to aim advertising campaigns at general types of personalities.1.6 Social factors influencing the buying decision processThe last kind of factors that can influence the buying decision process are the social factors.The consumer can be influenced by a various look of social factors.The family plays a big role for buying decisions, because there are a lot of different interests.The male head of the household is likely involved in the purchase of products such as alcohol or tobacco. Although female roles have changed, also a lot of women are involved in taking buying decisions cogitate to many household items.Another group that can influence the consumer are fictitious character groups. A group becomes a reference group when a person identifies with it so much that he or she puts very great value on the opinions, habits, and behaviours of the group members. But this could be a very negative reference for an individual, because the values of the group do not have absolutely to be right.Another important factor is the social class in which the individual lives. In every society there are people who belong to higher or lower positions of respect. The different social classes are described as open, because it is possible for everyone can move into and out of them very easily. For grouping people into classes many factors need to be taken into account, such as occupation, education, income, wealth, race, ethnic group, and possessions. Though the add up of factors chosen for the ranking can be very various it depends on the person who is doing the ranking.Social class also determines to some extent the type, quality and step of products that a person buys or uses. For example people living in the upper-class prefer luxury automobiles such as BMW or Audi while people ranked in a lower class cannot afford such cars.The last one of the social factors that I w ant to mention is culture. Culture means everything in our surroundings that is make by human beings. It harps of tangible items, such as food, furniture, buildings, clothing etc, and intangible concepts, such as education, welfare, and laws. But culture also includes the values and different kinds of behaviours of a specific society. Culture influences buying behaviour because everything in our daily life is permeated by it. Culture determines our lifestyle, how we dress, what we eat, or where we travel.So it is another important factor for marketers to know.1.7 judgement consumer behaviourIt is very important for marketers to understand consumer buying behaviour because that is the only possibility to offer greater satisfaction for the consumer. Although there remains a certain amount of consumer dissatisfaction. The reason for this is that some marketers smooth are not consumer oriented and do not regard customer satisfaction as a primary objective.Another problem is that the tools for analysing consumer behaviour are not very precise, so it is impossible for marketers to determine what is highly satisfying to buyers.Understanding consumer behaviour is a very important task for marketers. Even though the marketers were not able to gain al the knowledge they need, progress has been made during the last twenty years and is likely to continue in the next twenty. There will not only be refinements in research methods to gain more information, there will also be more pressure for thecompanies because of an increasingly competitive cable environment, and this will make such information essential for companies.2 ORGANISATIONAL MARKETS AND BUYING BEHAVIOUR2.1 IntroductionIn this chapter I would like to give a short overview about organisational markets and organisational buying decision processes. I want to excuse the various kinds of organisational markets, the types of buyers that make up these markets, and much more.Look forward to a new, interesting topic.2 .2 Types of organisational marketsThe following section describes the four kinds of organisational markets, and the characteristics of the customers that make up these markets.Producer marketsPersons and business organisations that buy products with the aim of making profit by using them to produce other products or by using them in their factories are classified as producer markets. These markets include buyers of lancinate-materials, as well as purchasers of semi-finished and finished items. Though the prerequisite for this is that the consumer uses these materials or items to create new products.A good example for this is a car manufacturer which buys steel and component parts to use directly in the production of cars.Reseller marketsReseller markets consist of intermediaries which means people that buy finished products to sell them with the aim of making profit examples forthis are wholesalers and retailers. One thing that is important to know is that resellers do not change anything at the physical characteristics of the products they sell. There is only one exception, producers that sell their products directly to the consumer.This is the case when the company produces, for example, high-tech products, which need a lot of explanation and service for the customer. But in all other cases all the products sold to a consumer market are first sold to a reseller. In the normal case it is like this the wholesaler who carries an immense number of products buys the products from the producer and sells them to the retailer. The retailer carries less products in stock than the wholesaler and sells these products to the final consumer. And the best thing is that every party makes profit (mostly).Government marketsGovernment markets consist of national and local governments. Every year they spend a lot of money for many various products and services to support their internal operations and to countenance the public with everything it needs, things like education, water, energy, infrastructure, national defence, etc. It is a little bit difficult for governments to spend the money in the right way because they are responsible for the public money they spend.This is also a problem for the companies which want to sell their products to the state because there is a relatively complex set of buying procedures which are linked with the accountability for the public money and it is understandable that most companies do not want to deal with so much red tape. However there are also marketers that have learned to deal with the complex buying procedures and do not find them to be a stumbling block. And they have good reasons for this because deals with governments can be very lucrative.Institutional marketsInstitutional markets do not seek to achieve business goals they try to achieve charitable, educational, community or other non-business goals.Members of institutional markets can be organisations, such as churches, some hospitals, libraries, museu ms, universities, and charitable organisations. These institutions spend millions of dollars every year to provide goods, services, and ideas to their members. It is very difficult for marketers to sell their goods to the various kinds of institutions because of their different aims so some marketers use special marketing activities to serve these markets.2.3 Dimensions of organisational buyingAfter we have looked at the different types of organisational markets I think we should also take a look on the dimensions of organisational buying.Characteristics of organisational transactionsIn comparison to consumer sales organisational transactions are different in several waysOrganisational buyers order much bigger quantities than individual consumers. That is one consequence linked to the behaviour of suppliers which prefer to sell their products in large quantities. This is the only way for them to make any profit.Another point is that organisational purchases are not negotiated as fre quently as consumer sales. Some products that are purchased by organisations might be very expensive, such as machines, or office equipment, and they are used for a number of years.There are also products that are purchased frequently, such as raw materials, or component items, which are used continuously in production. But how I mentioned in the lead the purchased quantities for these goods are much bigger.Also the purchase decisions are not as quick as they are for normal consumers. Because of the expensive products the purchasing decisions are often made by a committee which takes more time than only one individualneeds to take a decision.One thing that is unique to organisational sales is reciprocity. That is an arrangement between to organisations in which they agree to buy from each other. That seems to be very good for those both companies, but most reciprocal agreements threaten competition and that is why most of them are illegal. But nevertheless there are still some case s where such agreements take place.Attributes of organisational buyersIf we think about organisational buyers we guess that their purchasing behaviour is different to the behaviour from consumer buyers because they are better informed about the products they want to purchase. However that is not quite right. Organisational buyers also have personal that can be influenced by some of the factors I mentioned earlier, such as psychological, or social factors. Employees are also only people.Primary concerns of organisational buyersOrganisational customers are always concerned about buying the right stuff. So they take various factors into account before they make a purchasing decisionMost organisational customers want to offer to their target markets products of good quality. To achieve this aim companies often create a set of expressed characteristics, communally called specifications. So the organisational buyer can determine if the quality of the different products corresponds to the necessary specifications.Another thing that is very important to organisational customers is service. The services that are provided by suppliers influence directly and indirectly the be, sales, and profits of the organisational customer. If a marketer wants to have an advantage against his competitors which sell products that are similar to his products, he has to think about the perfectmix of services that he can provide. I would just like to mention some services that may influence buying decisions market information, inventory maintenance, on-time delivery, repair services, and credit.The most essential thing for the organisational customer is still the price. If the price is too high the operating costs will also be too high and at long last the product will be too expensive for the final consumer. But when purchasing for example a machine the buyer does not only look at the price, he compares the price with the profit he can gain with this machine, and also compares factors like product quality, and supplier services.Methods of organisational buyingNo organisational buyer will do his job in the same way like another but most of them use one or more of the following purchase methodsDescription Products are commonly standardised according to certain characteristics, such as shape, weight, size, and colour. With this standards an organisational buyer is able to purchase a product simply by describing quantity, shape etc. This purchase method is common for agricultural products.Inspection This purchase method is common especially for large industrial equipment, used vehicles, and buildings. These goods have unique characteristics but may vary in their conditions. So the organisational buyer has to base his purchase decision on inspection.Sampling In this case the buyer takes a sample of the desired product and starts out from the assumption that the sample is presentable for the parent population. consequently he checks if the quality of the sample is acc eptable. This method only makes sense if the tested product is homogeneous.Negotiation The buyer describes exactly what kind of product he needs and asks sellers to submit their offer. The buyer may take the most attractive offers and negotiate with those suppliers to see from who he can get thebest conditions. These contracts only make sense for one-time projects.Types of organisational purchasesThe first type of organisational purchases is the new-task purchase, that means that an organisation makes a purchase of a product that is needed in a new job or to solve a new problem. So it is a product that never have been purchased before. A new-task purchase may require the creation of product specifications, vendor specifications etc.If a new-task purchase is changed the second or third time it is ordered, it turns into a modified re-buy purchase. That means the specifications of the new-task purchase have been changed, or have been modified.If a buyer purchases the same product regul arly under approximately the same terms of sale we are talking about a straight re-buy purchase. Mostly this type is used with routine purchase decisions.Demand for industrial productsThe products sold to organisational customers are also called industrial products, and the look at for those products is called industrial demand. There are four different characteristics for industrial demandDerived demand Because organisational customers often buy products that are used directly or indirectly in production of goods that are sold to consumers to satisfy their needs, we can derive the demand for industrial products from the demand for consumer products. That is why it is called derived demand. For example the demand for computer CPUs derives from the consumers demand for personal computers.Inelastic demand In industry there are a lot of products for which the demand is inelastic. That means that a price increase or decrease will not alter the demand for this product. The reason for th is is that a lot of products produced in industry contain a large number of components and so aprice increase or decrease of one of these products will not cause a serious higher or lower per-unit production cost. So the company is not squeeze to find an alternative product. But if there is a price increase for a component that represents a big part of the products costs the demand may become more elastic because the price increase for the component will also cause an increasing price for the final consumer. correlative demand Joint demand means when two ore more items are used in combination to produce a product. For example, a company that produces axes needs the same number of axe handles as it does axe blades these two products are demanded jointly.Demand fluctuations The demand for industrial products may fluctuate because it derives from consumer demand. A high consumer demand for a particular product may cause that producers buy large quantities of raw materials and componen ts to ensure that they can produce the product for a longer time without any problems. They also may expand their production capacity which requires new machines, more workers, and also more raw materials and component parts.The opposite of this case is a decline in the demand for special consumer goods which causes a demand reduction for industrial products used to produce those goods. The consequence is that industrial customers buy less raw materials and components and stop buying new equipment and machines. There can be even a temporary standstill in the production for these goods.2.4 Organisational buying decisionThe buying marrow squashIn industry few organisational purchasing decisions are made only by one person in most cases they are made trough a buying centre. The buying centre consists of people within an organisation who are involved in making organisational purchasing decisions. The members of the buying centre are responsible for evaluating the products performance, selecting suppliers,negotiating the terms of purchase, and also for developing specifications.Stages of the organisational buying decision processLike consumers, organisations follow a buying decision process which you can see at the figure below. This process is almost similar to the decision process that was explained in sector 1.3 (The consumer buying decision process).Influences on organisational buyingThere are also some factors that may influence the decision process, they can be divided into four major categoriesEnvironmental These are factors like laws, regulations, economic conditions, competitive forces technological changes.Organisational Objectives, purchasing policies, resources, buying centre structureInterpersonal Cooperation, conflict, power relationshipsIndividual Age, education level, job status, personality, income2.5 Concluding detectI hope you enjoyed my short overview about the topics Consumer buying behaviour and Organisational markets and buying behaviour an d I also hope that my explanations were understandable.