Buying Behaviour

Buying Behaviour

1. Consumer or Organisational?

   • CONSUMER: for personal or household use
   • ORGANISATIONAL: for use in the operation of a business/organisation, to manufacture other products, for resale to others

2. What is consumer behaviour?

   • The study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs or wants.

3. How consumers buy

   • 5. Post-purchase evaluation of alternatives
     • 4. Purchase
       • 3. Evaluation of alternatives
         • 2. Information search
           • 1. Need recognition/problem awareness
             •  Internal stimulus: normal needs, hunger External stimulus: love new car - triggers buying one
   • Information Search
     • Total set
     • Awareness set
     • Consideration set
     • Choice set
   • Evaluation of Alternatives
     • Economic
       • Price Value for money Running costs Residual value Life-style costs
     • Social
       • Status Social belonging Convention Fashion
     • Technical
       • Reliability Durability Performance Style/looks Comfort Delivery Convenience Taste 
     • Personal
       • Self-image Risk reduction Ethics Emotions

4. What is Organisational Buying?

   • Organisational buying decision making process where formal organisations establish need for purchased products & services & identify, evaluate & choose among alternative brands & suppliers
   • Examples: paper cups by McDonald's, computer chips by Toshiba
   • Characteristics of Organisational Buying
     • Complexity of buying
     • Buying to specific requirements
     • Reciprocal buying
     • Negotiations
     • Derived demand
     • Nature and size of customers
     • Economic and technical choice criteria
     • Risks

5. Buying SItuations

   • 3. New task
   • 2. Modified rebuy
   • 1. Straight rebuy

6. Decision-making Unit

   • 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 organization
   • Influencers
     • Supply information and advice. Outsiders such as consultants sometimes perform the role
   • Initiators
     • Begin the purchase process
   • Buyers
     • Have the authority to execute the contractual arrangements
   • Users
     • Actually use the product. They may be the one who initiates the purchase process and may develop the product specification.

7. Buy Phases

   • 1. Recognition of a problem
   • 2. Determination of specification and quantity of needed item
   • 3. Search for and qualification of potential sources
   • 4. Acquisition and analysis of proposals
   • 5. Evaluation of proposals and selection of supplier(s)
   • 6. Selection of an order routine
   • 7. Performance feedback and evaluation