Week 2 Project
Buying Behavior
© 2016 South University
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[Course Name (not number)]
©2016 South University
2 Buying Behavior
Week 2 Lecture 1
The modern study of buyer behavior is very closely linked to the marketing concept. According to the marketing concept, an organization is most likely to build loyal customers if it focuses on satisfying the needs and wants of its target market. This is only possible when marketing managers have a solid understanding of the behavioral factors involved in generating customer satisfaction.
The buyer behavior process explains how successful brands have been built in the past and how to build them in the future. This is the objective of having the marketing managers study buyer behavior and the measure of that study's successful application in the marketing plan.
There are five important stages of buyer behavior.
1. Need or Want Recognition The first stage is need or want recognition. For a buyer, this may imply deciding that he or she needs a new shirt or is thirsty. Organizations often have a formal process for recognizing a need and making a request to begin the buying process.
2. Information Search The second stage is information search to satisfy the need. For a buyer, this might involve searching on the Internet for information about products, viewing advertisements, or traveling to retail outlets to check out the options available. For organizations, this means developing a list of vendors or posting a request for proposals to satisfy the need.
3. Evaluation of Alternatives The third stage is evaluation of alternatives. For a buyer, this means weighing the product choices using a mental checklist and deciding on the best. For
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[Course Name (not number)]
©2016 South University
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organizations, this process is spelled out in their policy manuals and procurement regulations for selecting the best vendor and is often assigned to a department or an individual who specializes in procurement.
4. Purchase Decision The fourth stage is the purchase decision. For a buyer, this means making up his or her mind. For organizations, it is a formal process with approvals from their purchasing agents and perhaps superiors, depending on the size of the purchase. For major purchases, the board of directors often needs to approve the acquisitions.
5. Postpurchase Evaluation The last stage in buyer behavior is the postpurchase evaluation. For a buyer, this involves analyzing how he or she feels about the purchase and determining whether he or she is satisfied enough to repeat it. For organizations, it’s a formal review process to see if the purchase satisfied their needs
There are four basic markets based on the buying mechanism and customer needs. All four markets may be local or global, depending on the size of the firm and its product mix.
1. Business Markets Consist of organizations that buy goods and services to produce services for consumers Business markets consist of organizations that buy goods and services to sell or perform services for their consumers. These organizations buy products to generate revenue.
2. Government Markets Consist of local, state, national, and international agencies Government markets consist of local,
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[Course Name (not number)]
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state, national, and international agencies. These markets need to buy products to serve their citizens through different kinds of services. Because they spend taxpayers’ money, these markets have special procurement regulations.
3. Nonprofit Markets Consist of organizations that buy goods and services to sell or perform services for consumers but that are not in the business to make a profit Nonprofit markets comprise a fourth type of market. Like business markets, nonprofits also buy goods and services for producing services for consumers, but they are not in business to make a profit. As a result, they must work within a very limited budget, making pricing important.
4. Consumer Markets Consist of individual consumers of goods and services Consumer markets consist of the individual consumers of goods and services. These are the traditional markets most individuals are familiar with through their own participation.
For the purpose of understanding buying behavior, the markets are further clustered into:
• Consumer markets: In the consumer markets, consumers use their own money to purchase goods they utilize for their own purposes. For consumers, the process is internal and is often applied unconsciously.
• Organization markets: Organization markets, by contrast, use money belonging to other people (stockholders, taxpayers, and donors) to buy products they need to produce the goods and services consistent with their organization's
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[Course Name (not number)]
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mission. The buyer decision process is common to both consumer and organization markets. For organizations, the buyer decision process is often spelled out in detail in policy manuals and procurement regulations.