Understanding Consumer and

Business Buyer Behaviour

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Understanding Consumer and Business Buyer
Behaviour

Consumer Buyer Behavior: The study of how individuals

and organizations make decisions to spend their
available resources on consumption-related items.

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Factors Influencing Buying Decisions
The various elements that can affect how and why consumers make
purchasing choices.

Psychological Factors
Individual influences on purchasing decisions, including perceptions,
motivations, beliefs, attitudes, and lifestyles.

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Psychological Factors: The internal influences that
impact how individuals behave when making
purchasing decisions.

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• Perception: The process by which individuals organize and
interpret their sensory impressions in order to give meaning to
their environment.

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• Perception: The process by which individuals organize and
interpret their sensory impressions in order to give meaning to
their environment.
o Selective Attention: Focusing on certain aspects of the
environment while ignoring others, influencing
consumer choices and decision-making.

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Perception: The process by
which individuals organize
and interpret their sensory
impressions in order to give
meaning to their environment.
o Selective Distortion:
The tendency for
consumers to
interpret information
in a way that aligns
with their
preconceptions or
beliefs.
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Perception: The process by which individuals organize and
interpret their sensory impressions in order to give meaning to
their environment.
o Selective Retention: The process by which consumers
remember only information that supports their beliefs
and filter out contradictory information.

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Motivation: The inner reasons that drive
individuals to make specific purchasing
decisions based on their needs, desires, and
preferences.

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Attitude: The psychological state that influences
an individual's tendency to respond to
environmental stimuli in a consistent way.

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Attitude: The psychological
state that influences an
individual's tendency to
respond to environmental
stimuli in a consistent way.
o Cognitive: Beliefs and
knowledge a person has
about an object or issue,
influencing their
behavior and decisions.

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Attitude: The psychological
state that influences an
individual's tendency to
respond to environmental
stimuli in a consistent way.
o Affective: Feelings and
emotions towards a
product or service,
influencing consumer
decisions and behavior.

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Attitude: The psychological
state that influences an
individual's tendency to
respond to environmental
stimuli in a consistent way.
o Behavioural:
Observable actions and
reactions towards a
product or service,
influenced by thoughts
and beliefs, leading to
future actions towards
the product or service.
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Social Factors
The shared values, beliefs, and practices that influence
purchasing decisions and behaviour.

The influences from society, culture, family, and

reference groups that impact an individual's purchasing
decisions.

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• Reference Groups: Groups
that influence an
individual's beliefs,
attitudes, and behaviors
through direct or indirect
interactions.

• Family: The influence of

family on an individual's
purchasing decisions and
attitudes towards
products and brands.
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Cultural Factors

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Cultural Factors

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Culture
Beliefs, values, customs,
and behaviors of a
group of people,
influencing their
purchasing decisions
and consumption
patterns.

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Personal
• Lifestyle: The way
individuals live and
spend their time,
influenced by
values, opinions,
and interests..

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Personal
• Age and Life-Cycle
Stage: Influences
consumer choices
and purchasing
decisions based on
age-related factors
and the stage of
life a person is in.
Infants, Toddlers, Preschoolers, School-Age Children,
Teenagers, Youth, Middle-Aged Adults, Senior Citizens
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Personal
• Lifestyle: The way individuals live and spend their time,
influenced by values, opinions, and interests..

• Personality and Self-Concept: Individual traits and self-

perception influencing how consumers make purchasing
decisions and interact with products and services.

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Consumer’s Perspective Vs Marketer’s Perspective

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Consumer’s Perspective Vs Marketer’s Perspective

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Consumer’s Perspective Vs Marketer’s Perspective

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Consumer Behaviour Analysis - Key Elements
Focuses on the viewpoint and preferences of customers
when evaluating products or services, highlighting
aspects important to consumers.

1. Needs and Wants

The desires and requirements of individuals or groups
for specific products or services.

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2. Consumer Decision Process

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Consumer Behaviour Analysis - Key Elements
Consumers identify their needs and wants based on
personal preferences, lifestyle, and values.

Consumers go through a series of steps to make

purchasing decisions, including problem recognition,
information search, evaluation of alternatives, purchase,
and post-purchase evaluation.

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The Buyer Decision Process for New Products
Individual Differences in Innovativeness
Varied responses to new products or ideas, often influenced
by personal traits and attitudes towards change.

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Influence of Product Characteristics on Rate of
Adoption

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Relative Advantage
The degree to which an
innovation is perceived as
better than the idea it
supersedes.

The perceived improvement of

a new innovation compared to
existing solutions, along with
the clarity of what the
innovation offers.

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Compatibility

The degree to which an

innovation is perceived
as consistent with
existing values, past
experiences, and needs
of potential adopters.

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Complexity

The level of difficulty

or intricacy involved
in understanding and
implementing new
ideas or technologies.

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Trialability

The ease with which

an innovation can be
experimented with
and tested before
full-scale adoption.

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Observability

The extent to which the

results of an innovation
are visible to others,
making it easier for
potential adopters to
assess its benefits.

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Business Markets

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Business Markets
Organizations that purchase goods and
services for use in their own operations or to
resell.

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Business Buyer Behaviour

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Major Types of Buying Situations

The circumstances in which a business makes

purchases, including new task, modified
rebuy, and straight rebuy situations.

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New Task Buying

When a business purchases a product or

service for the first time, involving a high level
of complexity and risk assessment.

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Modified Rebuy
A situation where the buyer wants to make
some changes in the existing product
specifications, prices, terms, or suppliers.

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Straight Rebuy
Routine purchase of a product without
changes in specifications, typically made by
businesses to replenish depleted stock.

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Buying Centre

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The Business Buyer Decision Process

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Business-to-Business Digital and Social
Media Marketing
Analytics and Monitoring
Measuring and tracking the performance of
digital marketing campaigns targeted at other
businesses.

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What is Marketing Research?
Gathering, analyzing, and interpreting information about a market,
including customer needs, and preferences and buying habits.
How companies develop and manage information about important
marketplace elements:
• customers,
• competitors,
• products,
• and marketing programs.

To succeed in today’s marketplace, companies must know how

to turn mountains of information into insights that will help
them engage customers, create and deliver greater value to
them. 51
Types of Marketing Information

To gaining insights about the marketplace and

customers we have two ways in which we can access
or collect data.

Internal Data
Large databases collect massive amounts of data
from sources: customer demographic and profile
data.

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Gaining insights about the marketplace and customers
Big Data
Internal Data
Large databases collect The huge and complex data sets generated
massive amounts of data by today’s sophisticated information
from sources: customer generation, collection, storage, and
demographic and profile analysis technologies. Every day nearly
data.
2.3 trillion gigabytes of data.

linked to in-store
That’s enough data to fill 5.68 trillion
and online
good old CD-ROMs, a stack tall enough to
purchasing
go to the moon and back nine times.
history, Web site
search terms,
page views, social Roughly 90 percent of the data in the world
media posts, and today has been created in only the past two
other data. years.2
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Gaining insights about the marketplace and customers
Big Data
Internal Data The huge and complex
data sets generated by
Large databases collect today’s sophisticated
massive amounts of data information
from sources: customer generation, collection,
storage, and analysis
demographic and profile technologies. Every
data. day nearly 2.3 trillion
gigabytes of data.

linked to in-store That’s enough data to Data mining:

fill 5.68 trillion good
and online old CD-ROMs, a stack computer algorithms
purchasing tall enough to go to the
moon and back nine search for patterns in
history, Web site times.
the data and generate
search terms,
page views, social Roughly 90 percent of recommendations and
the data in the world
media posts, and today has been created insights about how to
in only the past two
other data. years.2 increase sales.
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Managing Secondary Data
• Companies create customer insights
teams, whose job it is to develop
actionable insights from marketing
information and work strategically
with marketing decision makers to
apply those insights.
• Companies must design effective
marketing information systems to
enable the decision makers to access
and use the right data, in the right
form, at the right time.

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Managing Secondary Data
• Companies create customer insights teams, whose job it
is to develop actionable insights from marketing
information and work strategically with marketing
decision makers to apply those insights.
• Companies must design effective marketing
information systems to enable the decision makers to
access and use the right data, in the right form, at the
right time.

The goal is to
• create customer value,
• Customer engagement,
• and stronger customer
relationships.
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Managing Marketing Information
It is best used in the customer insights it provides. A marketing information
Companies create customer insights teams, whose system (MIS)
job it is to develop actionable insights from A system that allow
marketing information and work strategically with
marketing decision makers to apply those insights. companies to assess data
needs, develop the needed
Companies must design effective marketing
information systems to enable the decision makers data, and help decision
to access and use the right data, in the right form, at makers use the data to
the right time.
generate and validate
The ultimate goal is to actionable customer and
• create customer value,
• Customer engagement, market insights.
• and stronger customer relationships.

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Managing Marketing Information - A marketing
information system (MIS)

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Secondary Research
Gathering and analyzing existing data and information
collected by others for a specific purpose or research
question.

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Secondary Research
Gathering and analyzing existing data and information
collected by others for a specific purpose or research
question.

It includes
• customer characteristics,
• in-store and online sales transactions,
• web and social media site visits. The customer
service department keeps records of customer
satisfaction or service problems.
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Secondary Research
It include: Sales Reports
• customer Data collected and generated
characteristics, within the organization to
• in-store and online analyze sales performance and
sales transactions,
trends.
• web and social media
site visits. The
customer service Customer Feedback
department keeps Information gathered from
records of customer customers through surveys,
satisfaction or feedback forms, and other direct
service problems. interactions.
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Competitive Marketing Intelligence
Market Analysis
The systematic analysis of information to understand and
evaluate a company's position in the market.

Competitor Analysis
Evaluating and understanding competitors, their strategies,
strengths, and weaknesses to inform business decisions and
gain a competitive edge.

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Competitive Marketing Intelligence
Direct Competitors
Rival companies that offer similar products or services
within the same industry and target the same customer
base.

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Competitive Marketing Intelligence

Direct Competitors
Rival companies that
offer similar products or
services within the same
industry and target the
same customer base. Strategies
Tactics used to evaluate and
understand the strengths and
weaknesses of rival businesses
in the same industry.
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Competitive Marketing Intelligence

Pricing
Specific pricing
strategies used by
direct competitors to
analyze market
conditions and gain a
competitive
advantage.
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Competitive Marketing Intelligence

Product Offerings
The products and
services offered by a
company to attract
customers and gain
a competitive
advantage in the
market.
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Primary Research

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Primary Research
Firsthand data collected through:
• surveys,
• interviews,
• Focus groups
• observations

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Surveys
Collecting data
directly from
individuals or groups
to obtain insights
into preferences,
opinions, or trends.

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Focus Groups
Qualitative research
method where a
small group of
people share their
opinions and
feedback on a
specific topic.

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Interviews
Obtaining insights
directly from
individuals through
structured or
unstructured
questioning to gather
specific information.

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Social Media Data for
Marketing Research
Analyzing data from
social media platforms to
understand consumer
behavior, preferences,
and trends for marketing
purposes.

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Types of Research Objectives
Exploratory Research: To gather preliminary
information to help define the problem and
suggest hypotheses.

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Types of Research Objectives (1)

• Exploratory Research

• Descriptive Research

• Causal Research

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Types of Research Objectives (2)
• Exploratory Research: In-depth investigation to generate insights
and ideas, often used to understand consumer behavior and market
trends. It’s often used to define research questions and hypotheses –
Interview and FGDs.

• Descriptive Research: Involves the collection and analysis of data to

describe marketing phenomena, without influencing or altering the
environment being studied. I.e., describing market potential,
demographics, and consumer attitudes – Surveys and Observational

• Causal Research: Investigates cause-and-effect relationships to

understand how marketing strategies impact consumer behavior
and outcomes - Experimental
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Translating Objectives into Information Needs

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Key Considerations in Developing a Research
Plan
• Alignment with research objectives.

• Feasibility and cost-effectiveness.

• Potential impact on decision-making.

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Sampling in Marketing Research

Definition: The process of selecting a subset of

individuals from a larger population to
represent the whole for data collection and
analysis purposes.

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Sampling in Marketing Research

Simple Random
Sample: Selecting a
sample in which
every member of the
population has an
equal chance of
being chosen.
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Sampling in Marketing Research

Stratified Sampling: Dividing the population into

subgroups to ensure representation of different
characteristics or strata in the sample. 85
Probability and Non-Probability
Probability Sampling:
Selecting a subset of
individuals from a
larger population in a
way that each
member of the
population has an
equal chance of being
chosen.

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Probability and Non-Probability
Non-Probability
Sampling: A method
of selecting a sample
where not every
member of the
population has an
equal chance of being
chosen.

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Probability and Non-Probability

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Probability and Non-Probability

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Questionnaires as Research Instruments

Flexibility: Can be administered in various

formats including in-person, phone, email, or
online.

Types of Questions: Closed-ended for

quantitative analysis and open-ended for
qualitative insights.
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Designing Effective Questionnaires

Question Types:
Closed-ended with predefined responses.
Open-ended allowing free-form answers.

Design Principles: Simple, unbiased wording,

and logical question order.

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Closed-ended vs. Open-ended Questions
Comparison:
Closed-ended questions facilitate easier
interpretation and tabulation.

Open-ended questions can reveal deeper

insights without restricting responses.

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Mechanical Instruments for Consumer
Monitoring
Examples: People meters by Nielsen, checkout
scanners, GPS technologies, and Internet of
Things (IoT) connected devices.

Applications: Tracking TV viewership, shopping

behavior, and consumer movements and
activities.
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Internet of Things (IoT) and Big Data
Impact: Over 50 billion IoT-connected devices
providing vast amounts of data on consumer
behavior.

Potential: Enabling detailed monitoring of

consumer actions for deeper market insights.

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Neuromarketing: A New Frontier
Technologies: EEG and MRI to track brain
activity, combined with biometric measures for
comprehensive consumer response analysis.

Application Example: Nielsen's study for the

Shelter Pet Project to optimize ad effectiveness.

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Challenges of Interpreting Neuromarketing
Data
Complexity: Brain responses can be difficult to
interpret accurately.

Complementary Use: Often combined with

other research methods for a fuller
understanding of consumer reactions.

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Choosing the Right Research Instrument

Decision Factors: Research goals, budget,

required precision, and type of data needed
(quantitative vs. qualitative).

Balancing Act: Combining different instruments

for a comprehensive view of consumer
preferences and behaviors.

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