Buyer Behavior and Customer Needs

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Copyright Managerial Marke�ng

James Finch University of Wisconsin, La Crosse

Bridgepoint Educa�on, Inc.

VP of Learning Resources: Beth Aguiar

Editor-in-Chief/AVP: Steve Wainwright

Director of Editorial Technology: Peter Galuardi

Sponsoring Editor: Mireille Yanow

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ISBN-10: 1621780082

ISBN-13: 978-1-62178-008-3

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Acknowledgments The Editorial team would like to thank the following reviewers for their feedback and guidance:

Christopher P. Blocker, Baylor University

Victoria L. Cri�enden, Boston College

Jacqueline Gilliard, Ashford University

Sharif Muhammad, Ashford University

M. Joseph Sirgy, Virginia Tech

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Chapter 5

Analyzing Markets: Decision Making and Buyer Behavior

Lifesize/Thinkstock

Learning Outcomes

By the end of this chapter, you should be able to do the following:

Understand how personal, social, cultural, and economic condi�ons influence buyer behavior. Know that the processes that direct how consumers evaluate and select brands depends in part on their involvement with the purchase situa�on and product. Realize that a teaching or cogni�ve learning approach to influencing brand preferences requires ac�ve involvement by the buyer. Be able to describe the organiza�onal buying process and the three types of buying situa�ons. Recognize the significance of the buying center and its influence on decision making in B2B contexts.

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Ch. 5 Introduc�on This chapter examines the two classes of markets to which businesses sell their products: organiza�onal buyers and the ul�mate consumers. The organiza�onal market is made up of businesses or other ins�tu�ons that buy raw materials, semi-finished products, and fully finished products with the intent to resell final goods into the retail consumer, enduser market. The consumer market includes individual purchasers as well as households, families, and other purchasing retail groups.

We will begin by examining the environmental influences and decision making processes that are specific to the individual, retail consumer. We will then briefly review how personal, psychological, and cultural factors impact markets before turning to a close examina�on of how the buying decision process directs purchase behavior. The closing sec�ons of the chapter examine organiza�onal buying behavior. They explore how business-to-business markets differ from retail consumer markets. This includes an inves�ga�on of the three classes of B2B buying situa�ons, the steps involved in the buying process, and the iden�fica�on of the par�cipants involved in the business purchasing process.

Marke�ng managers need to understand the decision making processes of individuals and organiza�ons in order to influence their product and brand-specific choices. Knowing the methods that different individuals and groups use to evaluate alterna�ves enables marketers to develop segment-specific marke�ng programs to impact the outcome of these choice processes. However, brand preferences and choice decisions are not created in a vacuum. Cultural, social, and personal influences have direct and indirect impacts on how consumers make decisions.

* * *

One of the reasons that market researchers rely on the study of large numbers of consumers is that individual behavior is subject to wide variability. But it is s�ll surprising when professionals in their respec�ve fields are the outliers . . . the excep�ons to the norm.

Consider the case of Nancy Gerhardt, a 31-year-old real estate agent from Chicago who relocated to the Tallahassee, Florida, area. As she explained to her new Sunshine State colleagues, when it came to buying a house for herself, she was a great client to work with because she knew exactly what she wanted: "I really am my own favorite client!" In the Tallahassee metro area, she was intent on finding a modern, maintenance-free condo or townhome with low homeowners' associa�on (HOA) fees. She insisted on living within walking distance of city ameni�es and downtown shops. She'd se�le for two bedrooms and one bath, just as long as her new home met her three Cs criteria: carefree, contemporary, and close to where the ac�on is.

You can imagine the surprise of her colleagues when, only three weeks later, she closed on the purchase of a three-bedroom, two-bath 1920s Cra�sman-style bungalow in the remote suburbs outside the city limits. It wasn't near "the ac�on" or much else other than houses, though it did have beau�ful gardens and a huge yard to mow. Her explana�on for this choice from among the hundreds of homes available was concise. "Well . . . I know it isn't exactly what I said I wanted," she offered with some embarrassment, "but I couldn't help myself. It just looked so . . . ummmm . . . so cozy!"

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A consumer research group is studying Hispanic teens to get an understanding of consumer behavior. In addi�on to being consumers in their own right, Hispanic teens influence the purchases made by other genera�ons within their families. What would marketers have to consider when appealing to a cultural group?

The Indian Chicken Maharaja Mac reflects McDonald's responsiveness to cultural preferences.

Demo�x/Corbis

5.1 Social and Economic Influences on Consumer Behavior The decision making behavior of individual consumers is significantly affected by environmental influences in two dis�nct ways. Cultural, social, and personal factors impact the product wants, needs, and preferences of individual purchasers; these factors also shape their percep�on of the available brands. Psychological influences shape consumers' mo�va�ons to buy and their assessment of the importance of each purchase situa�on. The role of marke�ng within this context is to provide prospec�ve buyers with brand-specific informa�on and images consistent with the influence of all of these different factors. That is, marke�ng is most effec�ve when working with the flow of these sources of influence rather than struggling against the �de. Marke�ng is most efficient when adap�ng to the nature of the customers we serve rather than trying to change them. This is a par�cularly important considera�on with respect to the influence of cultural factors on buyers' behavior.

Cultural Factors

As discussed in chapter 3, cultural and social factors are cri�cally important concerns for marke�ng managers because they profoundly impact consumers' recep�vity to the marke�ng efforts of the firm. As product strategies aim to sa�sfy the preferences of clusters of buyers, the significance of these factors is amplified insofar as they provide bases for understanding important shared characteris�cs within market segments.

A buyer's cultural background is evidenced by his or her beliefs, a�tudes, values, and customs. The differen�al impact of culture on purchase behavior is some�mes difficult to discern, however, because its effects are so pervasive. As both consumers and marke�ng managers, culture filters our percep�ons of the world around us, and it can be difficult to detach ourselves from our built-in biases. For example, percep�ons of what kinds of food are most appe�zing are ini�ally directed by the culture we are immersed within, and these beliefs are reinforced as we grow and develop un�l they are an integral part of our makeup.

Cultural background heavily influences many personal, social, and economic ac�vi�es. It can impact our shopping habits, our a�tudes toward brands, and personal values and priori�es. Promo�ng U.S. brands to foreign countries is an obvious instance where marke�ng managers need to be keenly aware of the impact of cultural differences on purchase behavior. Less obvious, however, is the need to re-shape the cultural content of marke�ng programs when a company wishes to target consumers who have emigrated from other countries. Less obvious s�ll is that not everyone born in the United States shares the same cultural roots.

Hispanic Teen Consumers

Subcultures are groups of people who are differen�ated from the broader culture in which they live by shared beliefs and characteris�cs that iden�fy the group as dis�nct from the whole. These factors o�en include geographic region, ethnic origin, racial iden�ty, religious beliefs, occupa�on, poli�cal tradi�ons, and other factors that make the members of the subculture more like each other than those outside the group. In many instances, these affilia�ons with specific subcultures impact consumer lifestyles and, consequently, purchase preferences.

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Senior ci�zens are among the largest and most influen�al age- defined segments for many types of products.

Comstock/Thinkstock

Age is among the most common bases for segmen�ng markets and the basis for understanding several different subcultures. People of the same age group tend to have had similar life experiences and share more preferences and values. As consumers move through their life cycle, their product preferences change as well. Since the market for many types of media are reported according to age and sex of the audience, age is a par�cularly useful basis for tracking buyer behavior. As marketers develop marke�ng mixes to suit the tastes and preferences of specific age segments, it is rela�vely easy to find corresponding media through which they can be reached.

Consider the characteris�cs of senior ci�zens as an age subculture. People over 65 years of age have very different health concerns than younger cohorts. They value living independently, an issue that younger genera�ons seldom pause to consider. As a group, family �es and close friendships have greater significance for this genera�on than for others. They have more leisure �me than other age segments, and many enjoy the discre�onary income to pursue favorite hobbies and pas�mes. Some purchasing pa�erns are well established for this subculture, and brand loyalty is higher for this segment than all others. Each of these characteris�cs and values has substan�al implica�ons for marke�ng to this subculture that makes it dis�nct from every other genera�on.

Think About It

The baby boom genera�on includes those born between 1946 and 1964. Genera�on Xers were born between 1965 and 1985. Those in Genera�on Y were born between 1986 and 2002. Genera�on Z includes those born in 2003 and later. Pick one of these age cohorts and describe how their shared history has shaped their values.

How can these shared values be related to crea�ng brand preferences?

A wide array of subtle and apparent differences exists within any na�on's cultural mix. Consider how differences are expressed in how everyday events such as birthdays, weddings, and funerals are observed. Subcultures can vary widely—from the holidays they observe; to the a�tudes they exhibit toward ma�ers such as debt, nego�a�ng, shopping, and consump�on; to their views on subjects like gambling, global climate change, and professional sports. The differences of direct relevance to marke�ng managers are those that impact brand preference and purchase behavior. In addi�on to the impact of cultural context, consumers' personal economic circumstances and social class standing also have direct bearing on their behavior in the marketplace.

Think About It

Did you grow up in a Ford or Chevy household?

Does your family eat the evening meal at the same �me that you did growing up?

Is your preferred brand of peanut bu�er rooted in your personal background and culture?

For which products and brands that you regularly purchase can you see a cultural connec�on?

Personal Economic Factors and Social Class

Discre�onary income and disposable income are related measures of earnings that play large roles in both the ability and willingness of consumers to purchase nonessen�al goods. Disposable income is the amount of money that households have available to spend a�er income taxes have been accounted for. This measure is o�en used by economists as a key indicator to evaluate the health of the economy at large. Discre�onary income is the spendable por�on of disposable income available to households a�er deduc�ng the cost of necessi�es such as shelter. This measure is of more direct interest to most marketers since consumers have the freedom of choice to spend this money in accord with their wants rather than their needs.

Discre�onary income can be thought of as a pool of dollars that is available on a compe��ve basis. Those products and brands best suited to mee�ng the emo�onal and psychological needs of poten�al buyers are able to capture a share of that pool. The aggregate size of the pool, however, is subject to the ups and downs of the economic cycle. Sales of par�cularly expensive luxury items are o�en hurt dispropor�onately during extended periods of economic stagna�on or decline.

It is temp�ng to regard the role of economic factors in consumer decision making as strictly a ma�er of dollars and cents. However, a number of psychological considera�ons are at work here as well. Consumer confidence is an assessment of how op�mis�c consumers feel about the future state of the economy and their personal financial situa�on. High levels of confidence in the future tend to produce higher levels of discre�onary spending in the present. It is important to note that purchase behaviors typically change in an�cipa�on of future events, not in response to current condi�ons. In this sense, consumer confidence is regarded as a leading economic indicator.

Social class is an economic construct used to describe a person's standing or place in society. It is usually determined by a combina�on of economic and social factors including occupa�on, income, and educa�on. Social classes tend to promote the establishment of an economic hierarchy where groups a�ain greater or

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lesser status in their communi�es. Consumers o�en assert their current social status through the brands they buy. However, in many instances, the purchase of high-status or pres�gious brands reflects the aspira�ons of the buyer to ascend to a higher social level. Buyers using brand-specific purchases to convey a high status image is referred to as conspicuous consump�on. This pa�ern of buying high-end brands to impress others can be readily observed in the markets for fashion, luxury cars, and fine wines.

Some brand strategies inten�onally appeal to the drive for conspicuous consump�on. Aspira�onal brands are those that many status seekers may wish to own, but cannot. Both premium pricing strategies and quan�ty limita�ons imposed by the manufacturer create an ar�ficial scarcity that enhances the desirability of the brand. The por�on of the market that hopes to someday be able to afford the purchase is some�mes referred to as the aspira�onal audience for the brand.

Think About It

One of the best places to find aspira�on brands is in the pages of magazines. Many readers of magazines that focus on fashion, cars, celebri�es, and fine living are escaping into an environment that is very much unlike their current situa�on. Adver�sements within these publica�ons offer readers the opportunity to share in this "be�er world" by purchasing their products.

Iden�fy three magazines that seem to be directed to an aspira�onal audience. What brands are featured in their pages?

What type of message or appeal are the adver�sers using to reach their intended target market?

The level of discre�onary income that defines a market segment is o�en a good predictor of brand preference for basic, func�onal, low-status expenditures (e.g., laundry detergent). Social class, however, can be more relevant to understanding the basis for brand preferences when the product involved contributes to the self- image of the buyer or is intended by the buyer to convey informa�on to others about himself or herself (e.g., country club memberships).

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For many consumers, there are mul�ple influences on product preference and brand choice. Above, a woman shops for her daughter's jeans at a Jus�ce store. Why did she choose Jus�ce?

Associated Press

5.2 Psychological Influences on Consumer Behavior Psychological influences are those unique, personal factors that impact consumers' mo�va�ons to purchase and shape their percep�on of the importance of the purchase. Factors such as learning, memory, and mo�va�on play key roles in how consumers experience and respond to marke�ng efforts, par�cularly adver�sing. As consumers we assign different levels or degrees of importance to purchasing situa�ons as a func�on of their relevance to our lives. This perceived relevance of a product to our wants and needs is termed involvement.

Mo�va�on

Consumer mo�va�on refers to the internal state or processes that drive people to purchase products or services that they believe will fulfill conscious and unconscious wants and needs. Marke�ng strategies are oriented toward crea�ng products that deliver a bundle of benefits that will sa�sfy the drives of target customers.

Beyond the basic need for life's essen�als such as food and shelter, there are a number of types of needs that mo�vate people to purchase goods and services. For example, some food purchases stem from mo�va�ons other than simply hunger. Neither chocolate nor pizza is essen�al to survival. Clothes are necessary, but designer jeans are not. Given discre�onary income, consumers can choose to simultaneously meet basic needs while expressing taste preferences or their individual sense of fashion and style.

The desire to belong or fit into certain groups or subcultures is reflected by purchases that convey status or affilia�on with the group. The drive to relax or have fun directs purchases of games, toys, and recrea�onal equipment. Products geared primarily toward sa�sfying the drive for experien�al pleasures are some�mes termed hedonic products. Many vaca�on and resort services, for example, are geared toward providing customers with a luxurious and relaxing escape from their everyday lives. In many contexts, the role of mo�va�on in shaping behavior is mediated by the consumer's involvement.

Think About It

Many marke�ng campaigns that target Genera�on Y and Genera�on Z make the claim that their brand will allow users to express their individuality. Since these brands are being sold to millions of customers, why would this approach to sa�sfying the buyer's need for uniqueness be successful? Think of examples where this type of promise is being made both explicitly in the language of the adver�sement and implicitly through the use of images.

Involvement

Involvement is a pivotal concept in marke�ng. It is a measure of the perceived relevance or importance of a product to our wants and needs. Consumers' involvement with a product category or brand is typically described along a con�nuum ranging from high to low importance. As the American Marke�ng Associa�on explains it, "High involvement products are seen as having important personal consequences or as useful for achieving important personal goals. Low involvement products are not linked to important consequences or goals" (2011).

The level of importance assigned to a purchase, however, is unique to the individual and his or her mo�va�ons. Purchasing a new cell phone may be a cri�cal decision for one buyer if she feels that this product will significantly contribute to her sa�sfac�on with daily life or make a personal statement to others. Another buyer may simply see func�onal or u�litarian value in being able to make calls when away from home.

Although product involvement is specific to the individual consumer's level of interest, certain characteris�cs tend to make the purchase decision for some products more involved than others. For example, buyers o�en spend more �me and effort evalua�ng brands for purchases in product categories that are rela�vely unfamiliar or expensive. Any product decisions that are seen as either physically or psychologically risky will typically raise consumers' level of a�en�on in the purchasing process as well. By contrast, products that are inexpensive, frequently purchased, and require a minimum of thought or effort are low involvement products. Virtually all rou�ne or impulse buys are low involvement purchases.

In many instances, market strategies are designed to increase prospec�ve buyers' mo�va�on to buy and involvement with the buying process. Adver�sing techniques used to heighten interest in a brand include entertaining messages, celebrity endorsements, and various a�en�on-ge�ng special effects, as well as value and price promo�ons.

Understanding whether a product corresponds to a rela�vely high or low involvement purchase decision is an important considera�on in the determina�on of brand strategy. If a purchase is important to a consumer, then buyers can be engaged in thinking about the merits of one brand versus the available alterna�ves. Auto makers, for example, can promote their products by providing detailed informa�on about the specific a�ributes of the product (e.g., gas mileage, safety ra�ng) only because buyers are mo�vated to listen and learn. Appealing to buyers as though�ul, ra�onal consumers can only be effec�ve if they are mo�vated to pay a�en�on to the informa�on and incorporate it into their decision making.

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This humorous ad focuses on the brand's image of consistently providing a quality product to its customers since 1925. What makes the Jolly Green Giant an appealing spokesperson?

Associated Press

The strategy of appealing to intellect and reasoning will not be effec�ve for buyers in low involvement contexts. Although products like frozen vegetables can be differen�ated by marketers on the basis of tangible a�ributes (e.g., freshness, color), the task is more difficult since buyers simply are not that interested in the rela�ve merits of one brand over another. As a consequence, you o�en see promo�onal themes for low involvement product categories appealing to buyers on the basis of emo�on rather than intellect. The use of a�rac�ve models, cute baby animals, and animated spokespeople (e.g., the Jolly Green Giant) reflects an effort to make shoppers like the brand without having to learn anything specific about the category.

Think About It

On any given day, thousands of adver�sements in the mass media are intended to influence consumers' preferences based on seemingly irrelevant gimmicks. Talking animals, animated super heroes, talking infants . . . it is a very long list. Iden�fy three brands from the same low involvement product category and explain how each employs a different tac�c of this sort to posi�on its brand against compe�tors.

Learning

Marketers would like all of their prospec�ve customers to learn everything about the products they sell. However, the prolifera�on of compe�ng brands and adver�sing messages overwhelms the buyers' ability to keep track of all the informa�on they are bombarded with on a daily basis. In fact, consumers have li�le incen�ve to pay any a�en�on to most media messages. In this climate, it can be very difficult for marketers to impact brand preference. Knowing whether consumers view the purchase of your product as a high or low involvement decision should dictate how you approach the process of teaching them about your brand.

Learning is the term used to describe the process by which people acquire new knowledge and preferences, which in turn provides the basis for enduring changes in behavior. It is important for marketers to understand how consumers learn about products and services if we want to influence their behavior. The process by which consumers learn about products within a high involvement context differs substan�ally from low involvement situa�ons. In high involvement circumstances, consumers are mo�vated to acquire more informa�on about brands to improve the outcomes from their purchase decision. Under low involvement, the consequences of a subop�mal brand choice are not sufficiently serious to warrant much evalua�on of alterna�ves. Based on this contrast, marketers need to be aware of two paths to teaching consumers about their brands: behavioral learning (low involvement purchases) and cogni�ve learning (high involvement purchases).

Behavioral Learning and Low Involvement

Behavioral learning describes passive learning that takes place in response to external events. One of the primary forms of behavioral learning is classical condi�oning. In classical condi�oning, a previously known s�mulus that elicits a posi�ve response is repeatedly paired with another, neutral s�mulus. When a subject experiences this paired associa�on of s�muli several �mes, he or she passively learns to associate the previously neutral s�mulus with the pre-exis�ng posi�ve feelings associated with the ini�al posi�ve s�mulus.

This principle was first established by Ivan Pavlov in his famous experiments on training dogs. The repeated pairing of a ringing bell with the presenta�on of meat powder caused the dogs to learn the associa�on between the two s�muli. In subsequent experimental trials he observed that the dogs would salivate at the sound of the ringing bell, even in the absence of the meat powder. This model of learning without conscious effort has direct applica�ons to the process of shaping consumer preferences under low involvement.

The use of a�rac�ve models, celebrity endorsers, star athletes, cute children, lovable puppies, poignant family scenes, amusing animated figures, memorable musical themes, and generally posi�ve imagery in adver�sements is o�en intended to serve as the posi�ve or previously learned s�mulus. New brands or unfamiliar brands are the neutral s�mulus. The repeated pairing of the two will increase the strength of the associa�ons between the two s�muli over �me and

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reinforce the transfer of emo�onal content from one to the other. In markets that are overcrowded with both compe�ng brands and media adver�sing, this approach to shaping preferences without the deliberate par�cipa�on of the audience can be very effec�ve given sufficiently high levels of repe��on.

Think About It

The ability to influence individuals' a�tudes without any effort or awareness on their part is a poten�ally powerful marke�ng tool. However, the use of classical condi�oning in adver�sing has raised some ethical concerns within consumer advocacy groups.

Can you think of any ethically ques�onable prac�ces related to the use of this persuasion strategy?

Are there certain groups of consumers who should be shielded from this prac�ce?

Cogni�ve Learning and High Involvement

Cogni�ve learning describes an ac�ve learning process based on informa�on processing within the mind of the consumer. The process is typically prompted by the perceived need to make a decision or solve a problem. In contrast to the passive learning that takes place under classical condi�oning, cogni�ve learning requires both the mo�va�on to think about an issue and the dedica�on of some por�on of the individual's conscious a�en�on.

There are many different models of cogni�ve learning, but each of them is centered on the processes by which consumers acquire, process, retain, and retrieve informa�on. For marke�ng managers, the important endpoint of the process is the forma�on and persistence of an a�tude.

In simplest terms, an a�tude is the feeling of liking or disliking something. It is a rela�vely stable and enduring emo�onal or affec�ve response that directs our behavior toward the object of the a�tude. Insofar as products are bundles of benefits, an a�tude toward a product represents an individual's summary evalua�on of how good the bundle is rela�ve to his or her needs. The marke�ng efforts of a firm can influence a�tudes via two routes. The first is through classical condi�oning as discussed in the previous sec�on. The alterna�ve is through the cogni�ve learning path where exposure to new informa�on creates new a�tudes or alters exis�ng ones.

To impact a�tudes through cogni�ve learning, marketers need to carefully examine the bundle of benefits provided by a product to understand which product a�ributes are most important to a given target market. These key a�ributes will be those elements of the product that most significantly impact brand choice and provide the basis for posi�oning your brand in a compe��ve market. Marketers rely extensively on mul�-a�ribute models to understand how consumers' a�tudes and behaviors are shaped by their percep�ons of product a�ributes.

Think About It

Suppose that you needed to replace your car in the near future.

How would you describe the bundle of benefits that you would be looking for?

Which features or a�ributes are "must haves" and which are op�onal for you?

Can you priori�ze that list of features and specify the order of importance?

If a car salesperson knew what this list looked like, how could she use it to help her make a sale?

Mul�-A�ribute Models

Of all the psychological factors that can influence purchase decisions, a�tudes are the most powerful. In the absence of interference from factors beyond people's control their a�tudes will determine which brands they buy, which stores they shop in, how they choose to finance large purchases, and so on. Mul�-a�ribute models inves�gate the organiza�on of consumer a�tudes toward brands as a composite of beliefs about product a�ributes. In this model, a�tude is a func�on of the beliefs about brand a�ributes that the consumer regards as essen�al to the product, weighted by the importance of those categories of beliefs. This formula�on of how a�tudes are created and changed can be expressed mathema�cally.

Figure 5.1: Mul�-a�ribute model of a�tude

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The components of consumers' a�tudes toward a brand are their beliefs about how well it performs on any given a�ribute (bi) and the importance that the buyer a�aches to that a�ribute (wi).

Comparison shopping for product informa�on is consistent with the mul�-a�ribute model of a�tude development.

Associated Press

The mul�-a�ribute model shown in Figure 5.1 demonstrates that a buyer's a�tude toward a brand is a func�on of the beliefs that he or she holds about its a�ributes. Specifically, the three elements this model of a�tude comprises are a�ributes, beliefs, and important weights. The bi elements of the model reflect

consumer beliefs about how well a given brand performs on any given a�ribute. The wi elements of the model refer to the importance weight that buyers a�ach to

any given a�ribute. Consequently, a consumer's a�tude toward a brand is dependent on his or her beliefs about how well the brand delivers the promised a�ributes and the importance that he or she a�aches to each of these a�ributes or benefits.

Consider the example of a consumer's a�tude toward different brands of refrigerators. Having already made some preliminary choices about minimum style and performance features (e.g., must be a stainless steel, side-by-side model with in-door ice dispenser), the buyer is primarily concerned with evalua�ng the alterna�ve brands on four remaining product a�ributes: price, freezer volume, energy efficiency, and vegetable crisper capacity. (Addi�onal features may be considered but may not be important enough to be mathema�cally significant.) Further assume that there are four brands under considera�on (Brands A through D). Importance weights are assigned to each of the four a�ributes on a 1 to 10 scale, where 10 is most important. A�ribute evalua�on scores for each brand are also scored on a 1 to 10 basis, where higher numbers reflect levels of benefits closer to the buyer's ideal point.

Several marke�ng applica�ons for the mul�-a�ribute model can be gleaned from an examina�on of the sample data provided in Table 5.1. The analysis of survey data from a large number of prospec�ve refrigerator shoppers will enable marke�ng managers to define different market segments based on the benefits or a�ributes that they weight most heavily. There may be a price segment, an energy efficiency segment, a style segment, a func�onal value segment, and so on. A mul�-a�ribute approach to the study of markets can reveal which combina�on of benefits is most

important to a given target market. The applica�on of this model in market research contexts can illustrate how a�tudes provide a summary evalua�on of how good the benefits bundle is rela�ve to the needs of different segments.

Table 5.1: Mul�-a�ribute example

A�ribute Beliefs (bi)

Importance (wi) Brand A Brand B Brand C Brand D

Price 7 8 9 6 3

Freezer Volume 5 9 3 3 3

Energy Efficiency 4 4 5 6 9

Vegetable Crisper Capacity 2 8 2 1 9

A�tude Score 133 102 83 90

From a strategic perspec�ve, the bi and wi measures of mul�-a�ribute models provide informa�on that can be used to assess the level of differen�a�on between

brands and establish goals for brand posi�oning. Mul�-a�ribute models of consumer a�tudes supply the data required to create the types of posi�oning maps

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Even successful product launches like the Puffs Plus Lo�on brand can be modified to extend its appeal by adding new features such as the soothing scent of Vicks.

Associated Press

shown in Chapter 1. Maps of this sort are typically used to examine the gaps that exist between a brand's desired posi�oning strategy and the market's current percep�ons.

The mul�-a�ribute model is not intended to provide a precise, accurate depic�on of how consumers use informa�on to form a�tudes in every circumstance. Over �me, however, it has proven to be a very good descrip�ve and predic�ve model when applied to the study of large groups or market segments. As a tool for planning marke�ng strategy, it can be used to answer several key ques�ons about consumer behavior. Properly specified, it can indicate how consumers use informa�on to evaluate alterna�ve brands and which product benefits are of greatest importance to a given segment of the market.

Think About It

Apply the mul�-a�ribute model of a�tude forma�on to the process that you might use when making decisions about your next major purchase (e.g., car, computer). How accurately does the model describe the process you are likely to go through in reaching a decision? What are the advantages to marke�ng managers of examining behavior within the context of this type of model?

A�tude Forma�on Under Low Versus High Involvement

For both low and high involvement products, purchase decisions are driven by specialized a�tudes that we refer to as brand preference. In both contexts, a�tudes are formed through learning. Under low involvement, learning typically occurs without the ac�ve mental involvement of the individual. The repeated pairing and linking of s�muli as described by the classical condi�oning paradigm is one of the most common paths to a�tude forma�on under low involvement. In addi�on, consumers can learn a�tudes from the rewards or outcomes associated with past behavior via instrumental condi�oning.

Instrumental condi�oning is a form of passive learning that occurs based on the punishment and rewards associated with a specific behavior. Within many low involvement contexts, an individual will modify his or her behavior over �me due to its consequences. Coupons and rebates, for example, are intended to provide shoppers with posi�ve reinforcement of their brand purchase behavior and encourage future purchases. Ideally, sa�sfac�on with the product itself should be the primary source of posi�ve reinforcement. Under high involvement situa�ons, a�tudes are learned from the processing of informa�on about the object of the a�tude. Informa�on may come from direct experience with a product, experiences shared by friends, or exposure to marke�ng-controlled informa�on sources such as adver�sing.

The three primary means by which marketers can directly influence buyers' a�tudes are evident from the mathema�cal formula�on of the mul�-a�ribute model. Marke�ng programs can try to change consumers' beliefs (bi values) about their brand rela�ve to compe�tor brands. For example,

Puffs might adver�se that its brand is stronger than compe�ng brands of facial �ssue. However, it can also try to leverage the impact of a�ributes for which it already has high brand-specific scores by increasing their perceived importance and importance weights (wi values). If the Puffs Plus Lo�on

brand is already recognized as gentler on one's skin than compe�tors' brands, the brand manager might decide to promote the rela�ve importance of �ssue so�ness to personal comfort and skin care. Finally, marketers can choose to add new a�ributes to the set of considera�ons that consumers use to evaluate alterna�ve brands. For example, a facial �ssue manufacturer that can't compete on other product quali�es (e.g., strength, so�ness) could introduce a new feature such as the infusion of an�microbial gel into its brand.

If ini�ally successful, subsequent marke�ng efforts for this new brand could focus on raising awareness of the risks associated with common household germs to elevate the weight (wi) that

consumers a�ach to this new feature. Alterna�vely, adver�sing messages could be aimed at reinforcing buyers' belief (bi) that this new brand is best at figh�ng common household germs. Some

combina�on of the two is most likely for this emerging brand and would provide a viable path to improving buyers' a�tudes toward this new compe�tor.

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The buying center roles include influencers, gatekeepers, deciders, buyers, and users. How do these relate to one another?

5.3 The Purchase Decision Process: A Five-Stage Model Just as marke�ng managers need to understand how a�tudes direct purchase behavior, they need to understand the process by which consumers make decisions about the products they buy. Purchase decisions are made in a series of stages that result in the selec�on of one alterna�ve over other compe��ve choices. Decisions related to purchase of high involvement products typically require greater a�en�on and mental effort than low involvement decisions. In fact, the habit- strength related to some low involvement purchases (e.g., buying chewing gum) makes the actual process nearly automa�c.

The five-stage model described in this sec�on relates specifically to high involvement decision making. Since the consequences of low involvement decisions are less important to consumers, the cogni�vely intensive processes of searching for relevant informa�on and though�ully evalua�ng alterna�ves are generally omi�ed. Consequently, the corresponding three-step model for low involvement decision making is far simpler.

Figure 5.2: Low versus high involvement decision processes

It is worth remembering that the dis�nc�on between high and low involvement decision making illustrated in Figure 5.2 is not intended to be absolute. High and low involvement anchor the endpoints of a spectrum, and purchase decisions may share some characteris�cs of both extremes. In addi�on, the unique characteris�cs of the purchasing occasion or context can shi� the percep�on of a product's importance from one extreme to the other. Buying a watch at the hotel gi� shop because you le� yours at home is a much different experience than buying a watch as a gi� on your 25th wedding anniversary.

To illustrate the purchase decision process five-stage model, we will follow one high involvement decision process from start to finish. We will consider how a 30- year-old woman decides to find an obstetrician for the first �me.

Problem Recogni�on

Problem recogni�on (consumer buying) is the first stage in the five-step purchase decision process model. It occurs when a consumer becomes aware of a need that must be met and recognizes that a par�cular product or service is required.

So, what factors might trigger thoughts about selec�ng an obstetrician? Learning that you're pregnant. Turning 30 years old. Hearing that a close friend or rela�ve is pregnant. News stories on fer�lity. A husband's remarks about star�ng a family. Possibly even adver�sing.

Informa�on Search

Once consumers recognize an important (high involvement) problem, they typically ini�ate an informa�on search that will help them be�er understand and solve the problem. An internal search is the process of scanning memories for relevant product informa�on. An external search relates to the acquisi�on of new informa�on from sources outside ourselves such as adver�sing, Internet searches, and discussions with friends.

In the case of the woman looking for informa�on on choosing an obstetrician, she is likely to draw informa�on from friends, family members, her personal physician, health care websites, adver�sing, media stories, and personal interviews with poten�al providers.

The intensity of an informa�on search is reflected by the number of alterna�ve brands evaluated, the number of sellers or providers considered, the number of external sources consulted, and the total �me spent searching. In general, consumers con�nue the search un�l they feel that the added value of new informa�on

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fails to cover the �me costs associated with searching. Consumers use this informa�on search process to reduce risk in the same way that organiza�ons use market research. For consumers, the poten�al risks associated with making a poor decision include financial risk, psychological risks, and risks to our physical well-being.

Think About It

Some people ac�vely pay a�en�on to car adver�sements long before they ever seriously consider buying their next car.

Do you think that this behavior can be a�ributed to their long-range planning and desire to be sure they make a good decision once the �me comes?

Or do some people just enjoy keeping up on cars?

Evalua�on of Alterna�ves: Mul�-A�ribute Model

The evalua�on of alterna�ves within a high involvement context relies on the same basic processes described in the sec�on on the mul�-a�ribute model. However, this stage of the model also includes the task of narrowing the set of all possible choices to a few. The total number of brands that the buyer knows about make up his or her evoked set. However, the specific alterna�ves being ac�vely considered by the decision maker may be a considerably smaller subset of the total. This is termed the considera�on set. One goal of marke�ng programs is to ensure that the company's brand is part of the considera�on set for its target markets.

In the case of a woman seeking an obstetrician illustrated in Table 5.2, the type of prac�ce may be a useful filter or screen in the ini�al narrowing down of the considera�on set. The available alterna�ves may include private obstetric prac�ce, group prac�ce, MD in prac�ce with a nurse-midwife, and clinic/hospital-affiliated obstetrician. Assuming she decides to narrow the field to hospital-affiliated obstetric care, the considera�on set is further narrowed down and the remaining op�ons are considered more carefully. Our best concep�on of how this evalua�on process is carried out is provided by the mul�-a�ribute model described in a preceding sec�on.

Table 5.2: Applica�on of the mul�-a�ribute model to choice of obstetric care

A�ribute Beliefs (bi)

Import. (wi) Hospital A Hospital B Hospital C Hospital D

Loca�on 9 4 9 3 8

Latest Technology 7 7 6 9 8

Caring Staff 6 5 5 1 8

Nutri�on Counseling 4 6 2 1 2

A�tude Score 139 161 100 184

It is possible that many more a�ributes would be considered in this situa�on, such as flexible hours for appointments, woman physicians on staff, physicians' willingness to answer ques�ons, home-like delivery and post-delivery rooms, natural childbirth support facili�es, and so forth. However, it is unlikely that the fi�h or sixth most important a�ributes would make a significant mathema�cal difference since their importance weights (wi) would be low by comparison to the first four.

This mathema�cal principle is also reflected in reality since people have a limited capacity for processing informa�on and are typically seeking to maximize brand performance on a rela�vely small set of features. Brand a�ributes that are used by consumers to discriminate between brands in this mul�-a�ribute process are termed determinant a�ributes. At most, lesser-weighted brand a�ributes some�mes serve as �e-breakers.

Purchase Decision

A�er the considera�on set has been evaluated, consumers will usually choose among the contending brands at the purchase decision stage. In some instances, however, they may not feel confident in their decision and will opt to return to the informa�on search stage. Uncertainty may also stem from the marke�ng efforts of compe�ng brands. As each brand stresses a�ributes on which it excels, the importance weights assigned by consumers may become unstable.

In most instances, however, the evalua�on stage produces a ranked set of preferences. In the absence of interven�on by other factors (e.g., insurance companies, husband's objec�ons, special circumstances), the consumer will move toward the selec�on of the most preferred alterna�ve. In the example we have been following, the woman searching for obstetric care would probably select Hospital D and then proceed to the next itera�on of decision making as she tries to iden�fy the best physician for her within that hospital.

Post-Purchase Evalua�on: Sa�sfac�on or Remorse

Throughout this descrip�on of the five-stage model, the purchase decision process has been described as ra�onal and logical. Cogni�ve learning has been the opera�ve route to decision making with li�le thought for the role of affec�ve or emo�onal influences on the decision process. This reflects the nature of the high involvement purchasing process. Since the consequences of the purchase are significant, the tendency is for consumers to be rela�vely systema�c about the process—even when they are not aware of it.

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The rela�vely higher levels of risk associated with the purchase of high involvement products, however, also carries substan�ally higher risks for nega�ve emo�onal outcomes. Whether or not customers are sa�sfied with their experience of a product is determined by how well the delivered bundle of benefits matches the expecta�ons they held prior to buying it. Feelings of dissa�sfac�on can produce cogni�ve dissonance, some�mes called buyer's remorse. This is o�en the direct result of the "insecurity that a buyer feels about the appropriateness of the purchase decision a�er the decision has been made" (American Marke�ng Associa�on, 2011). Efforts by salespeople or customer service representa�ves to reassure buyers following a significant purchase is part of marke�ng efforts to reduce this form of post-purchase dissonance and address buyers' concerns.

Who Is the Internet Shopper?

As recently as 2000, research on the impact of online shopping had predicted a behavioral revolu�on that would eliminate many brick-and-mortar stores from the retail landscape (Evans and Wurster, 2000). Though the change has not been as radical as predicted, the Internet has provided great opportuni�es for startup companies and is the fastest growing retail channel for many exis�ng brands. Despite its popularity with many consumers, however, it is far from becoming the most common path for consumer shopping. In fact, online sales account for about 3 percent of total retail sales in the United States (Laudon and Traver, 2008).

There is li�le doubt, however, that the global impact of online retailing will con�nue to grow in importance. European and Asian consumers make almost twice as many purchases as North American online shoppers and the rate is even higher in developing countries than in developed markets (ACNielsen, 2005).

So . . . what do we know about Internet shoppers? Who are they and what dis�nguishes them from tradi�onal retail customers? Research published by Brashear, Kashyap, Musante, and Donthu in 2009 provides some answers.

As might be expected, Internet shoppers typically have higher incomes, Internet usage levels, and computer ownership rates than those who do not shop online. Online shoppers are also mo�vated by shopping convenience to a greater extent than tradi�onal consumers. In contrast to those who shop exclusively at tradi�onal retail stores, online consumers also tend to be more innova�ve and willing to try new products and services. Similarly, Internet shoppers also demonstrate rela�vely high levels of impulsive buying in response to the s�muli provided by the shopping environment. And, finally, Internet shoppers also tend to be more recep�ve to both direct marke�ng and adver�sing appeals when compared with those who do not shop online.

To promote the growth of online sales volume in the near term, marke�ng managers will need to tailor the Internet retail environment to fit the preferences and tendencies of current Web-friendly customers. Among other considera�ons, this means making the online purchasing process as convenient as possible. Special online promo�ons, coupons, and discount pricing can also be emphasized to target the impulsiveness of online buyers. To extend the popularity of online shopping beyond the ranks of current customers, however, Web designers will need to broaden the appeal of the online shopping experience to different types of customers. How to facilitate this growth remains the subject of extensive research and specula�on.

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5.4 Business-to-Business Markets Organiza�onal markets are composed primarily of manufacturers, wholesalers, retailers, and government agencies. These business-to-business, or B2B, buyers purchase goods and services for their own opera�onal needs, for use in the produc�on of other products, or for resale. An integral feature of B2B markets is derived demand. Organiza�onal buyers' demand for materials is derived from the an�cipated sales of finished goods to retail consumers. A summary of some essen�al differences between business markets and consumer markets is provided in Table 5.3.

Table 5.3: Business versus consumer markets

Market and Buyer Characteris�cs Business Markets Consumer Markets

Number of Buyers Rela�vely few and o�en similar Many and very diverse

Size of Purchases For products that are used regularly, businesses o�en buy large volumes

Smaller purchase volumes, typically less expensive goods

Concentra�on of Buyers Higher levels of geographic concentra�on Widely dispersed

Time Required to Complete a Sale Transac�ons o�en require mul�ple interac�ons between buyer and seller

Sales o�en completed at first visit to retailer

Standardiza�on of Products Products are o�en custom designed to meet buyer's unique specifica�ons

Usually standardized products with some varia�ons within models

Product-Related Exper�se of Buyers Transac�ons are managed by professional buyers and influenced by in-house experts

Usually limited by the purchaser's prior experience with the product

Prices: Fixed or Nego�ated Usually nego�ated Typically nonnego�able other than for large purchases

Number of People Involved in the Decision Making Process

Usually several, increasing according to the cost and importance of the purchase

Limited sphere of influencers—usually family members

Most Common Type of Promo�ons Personal selling Mass media adver�sing

As shown in Table 5.3, B2B markets are characterized by fewer and larger buyers than are typically found in B2C markets. Rela�onships between buyers and sellers are typically closer, and there is a greater emphasis on personal selling rather than adver�sing. Prices are nego�ated more o�en in B2B markets than B2C markets, and the average dollar value of a purchase is typically much larger as well. However, the purchasing behavior of organiza�onal buyers closely resembles the high involvement model of retail consumer purchase behavior in many significant ways. The remaining sec�on of this chapter highlights those ways.

In the inves�ga�on of retail buying, we dis�nguished between low and high involvement types of purchases based on the perceived importance of the product to the buyer. The corresponding division of buying situa�ons for organiza�onal customers dis�nguishes among three types based primarily on the complexity of the purchase and the level of problem-solving required to complete the transac�on successfully.

Straight Rebuy

The straight rebuy is a habitual decision that corresponds to the low involvement purchases made by B2C buyers. Straight rebuy processes are used to repurchase inexpensive, low-risk products with which the company's purchasing agent is already familiar. In most instances, new purchases are simply reorders to replace depleted inventory or stock. Alterna�ve brands or vendors are not typically considered or evaluated unless there is some dissa�sfac�on with current suppliers. Rou�ne purchases of everything from office supplies to the standardized components used in manufacturing (e.g., nuts, bolts, screws) are examples of straight rebuys.

Modified Rebuy

A modified rebuy involves limited decision making and problem-solving. Modified rebuy processes are used when the purchase situa�on is less complex than new-task buying, but more involved than a straight rebuy. Some informa�on search and acquisi�on is required to reach decisions, and a limited number of alterna�ves may be evaluated. In many instances, modified rebuy situa�ons are ini�ated by product users within the organiza�on who want to revise product specifica�ons or change suppliers. In health care se�ngs, for example, physicians are o�en very selec�ve about the tools of their trade. If they are dissa�sfied with the quality of medical supplies (e.g., gloves, instruments, pa�ent gowns), they will o�en ini�ate the process of changing vendors.

New Task Buying

New task buying is the most complex of the three buy classes. A new task requires greater effort in gathering informa�on and evalua�ng alterna�ves because the company has not previously made a similar decision. As a consequence, more people within the organiza�on are typically involved in the

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An example of a straight rebuys is rou�ne purchases of office supplies. What other examples can you think of?

Fancy Collec�on/SuperStock

decision making process for new task buying than for the other two types. This is par�cularly true if the product being purchased is rela�vely expensive and the firm has not had direct prior experience with its use. The dynamics and processes involved in new task buying most closely correspond to the high involvement purchase model developed in the previous sec�ons of this chapter.

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The buying center roles include influencers, gatekeepers, deciders, buyers, and users.

5.5 Par�cipants in the Business Buying Process The organiza�onal purchasing process for important decisions is typically influenced by many people within the firm who interact and collaborate in a decision making unit referred to as the buying center. As illustrated in Figure 5.3, the buying center is not defined by a specific place or spa�al loca�on within the firm. Instead, it is typically a cross-func�onal en�ty comprising all the people who par�cipate in or influence the decision making process. The value of the buying center as decision making unit stems from the team members' opportuni�es to share knowledge and concerns related to important buying decisions.

Figure 5.3: Par�cipants in the buying center

It is important to note that the primary mo�va�on behind the processes involved in organiza�onal buying and the crea�on of buying centers is risk reduc�on. Just as retail consumers can engage in intensive periods of informa�on search to improve the outcomes of important buying decisions, corpora�ons allocate valuable human resources to buying center teams to minimize the likelihood of making bad choices on major purchases.

Composi�on of the Buying Center

To func�on effec�vely, buying centers require input and collabora�on from a range of func�onal departments and opera�onal groups within the organiza�on. These typically include marke�ng, accoun�ng, finance, and opera�ons management. Technical experts are required to serve as resources to the team when technical purchases are being considered. The composi�on and number of people making up the buying center will vary, depending on the complexity and requirements of purchase being planned. However, there are five roles that can usually be iden�fied within any fully func�onal center:

Buyers: Professional purchasing specialists who iden�fy suppliers, arrange terms of sale, and carry out the contractual procedures required to facilitate the sale of the product.

Users: People within the firm who will be end users of the product being purchased.

Influencers: Individuals who a�empt to affect the outcome of the process, o�en through the expression of their expert opinion. Opera�ng within their area of exper�se, they may offer sugges�ons on the func�onal or technical specifica�on of product requirements.

Gatekeepers: People within the organiza�on who control the flow of relevant purchase- and product-related informa�on.

Deciders: The individual team member or members who make the final purchase decision.

Stages in the Business Buying Process

The term buy phases is used exclusively to describe the stages that organiza�ons follow when making purchasing decisions. The seven stages in the business buying process resemble the five-stage purchase decision process model for retail consumers. Each of the seven steps is illustrated in Figure 5.4 and explained in the sec�on that follows.

Figure 5.4: Stages in the business buying process

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Stages in the B2B buying process include: problem recogni�on, product specifica�on, supplier sourcing, personal solicita�on, supplier selec�on, making the transac�on, and performance review.

This adver�sement for TallyGenicom laser printer is directed toward business

Problem Recogni�on (organiza�onal buying): The process is ini�ated when a problem or need is recognized. This can result from either factors internal to the company (e.g., mechanical breakdowns in old equipment) or external factors. The marke�ng program of a supplier, for example, may persuade the firm to consider replacing aging equipment.

General Need Descrip�on and Product Specifica�on: This is the stage where the problem that was ini�ally iden�fied is translated into a general need descrip�on (e.g., 60 new ver�cal lathes) and then a set of product specifica�ons. Technical specifica�ons for a lathe might include load capacity, feed rates, and turning speed.

Supplier/Source Search: This describes the processes used by buyers to iden�fy poten�al suppliers through the Internet, trade directories, catalogs, and adver�sements. An essen�al task of suppliers' marke�ng programs is to make their company known to prospec�ve buyers. This corresponds to breaking into the considera�on set for retail buyers.

Proposal Solicita�on: At this point in the process, buyers invite qualified and approved suppliers to submit proposals. This can be a very complex procedure if the product is technically complex or unusual.

Supplier Selec�on: Part of the output from the buying center process is usually the development and implementa�on of a supplier evalua�on model. It is a mul�-a�ribute model of the type previously described that is used to systema�cally evaluate alterna�ve suppliers. In a sense, the buying center is explicitly execu�ng the model that consumers are implicitly following in their purchase delibera�ons.

Making the Transac�on or Ordering Process Rou�ne: For parts and materials orders, organiza�ons will usually try to create a standardized rou�ne for future product reorders. For some major purchases, the provision of required maintenance, service, and accessory products will be planned and scheduled. Automa�c reordering systems are o�en used to support just-in-�me inventory systems. This usually signals the beginning of a long-term rela�onship with the preferred supplier. Maintaining this customer's sa�sfac�on, however, must become a high priority for the supplier who earns this business opportunity.

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customers. How is it appealing to this par�cular consumer group?

Associated Press

Performance Review: In this final stage, the buyer systema�cally and periodically reviews the efficiency and effec�veness of chosen suppliers. Informa�on for this review process is typically acquired from material end users within the organiza�on since these are the people most directly impacted by the quality of supplier performance. The consequences of a dissa�sfied customer may include financial penal�es or adjustments to the terms of the contract at the �me of renewal. In the worst case scenario, the organiza�on may discon�nue the rela�onship with the supplier completely and solicit a new round of proposals from compe�ng vendors.

Think About It

The selec�on and purchase of pharmaceu�cal drugs by physicians and hospitals seems as though it should be a straigh�orward process based on the needs of pa�ents and the efficacy of alterna�ve drugs.

Can you iden�fy any marke�ng tac�cs that drug makers might use to influence these purchasing decisions that are not directly related to promo�ng the benefits of the products they are selling?

Can you cite examples from other markets and industries?

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Ch. 5 Conclusion Retail consumers and organiza�onal buyers share some common characteris�cs in their approaches to decision making. For important purchases, both groups search for informa�on as a means of mi�ga�ng the risk of making poor choices. The end-user market for consumer goods is influenced by a wide range of social, cultural, economic, and psychological forces. Some of these are unique to the individual while the impact of others spans large segments of the economy. The process of organiza�onal purchasing is generally free from many of the seemingly extraneous forces that influence retail consumers. The process is designed to provide a highly ra�onal approach to purchasing products and solving problems. It is important to remember, however, that the judgment exercised by people opera�ng within these logical and highly structured buying processes is occasionally going to be influenced by factors unrelated to the objec�ves of the system. In some instances, marketers inten�onally introduce these unrelated factors as part of their efforts to sell products.

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Ch. 5 Learning Resources

Key Ideas

Cri�cal Thinking Ques�ons

1. Iden�fy five dis�nct subcultures with which you are familiar. For each one, explain what makes people in that group different from the culture at large. Can you explain how meaningful market segments could be created from each of these subdivisions?

2. Do families make decisions differently than individuals? If so, how? Would this significantly change the nature or applica�on of the mul�-a�ribute model presented in the chapter?

3. People some�mes adopt aspects of their spouse's cultural background. Since these beliefs, values, and prac�ces are not the ones these people were raised with, are they likely to impact market behavior as reliably as the innate aspects of their original culture?

4. Marketers o�en assume that the preferences and behaviors associated with specific age-defined subcultures are rela�vely constant over �me. Since the actual membership of age segments (e.g., 25- to 34-year-olds) changes constantly, is this assump�on valid?

5. How can segmenta�on by religious affilia�on or spiritual beliefs be used to improve the effec�veness and efficiency of marke�ng programs for some products? Provide examples.

6. Consumer confidence is a leading economic indicator in the sense that high levels of confidence in the future tend to produce higher levels of discre�onary spending in the present. It also works in reverse for low levels of confidence. Do you believe that this rela�onship is equally strong for op�mis�c and pessimis�c expecta�ons?

7. Since a consumer's level of involvement with a product is specific to each individual, how can it be used effec�vely in the planning of marke�ng programs? 8. Some people seem more naturally resistant than others to learning about products and brands from adver�sements. Why might this be the case? 9. A student once commented in class that she had never been influenced to buy anything because of an adver�sement. The instructor replied, "How would you

know?" What do you think he meant by that? 10. Many researchers believe that it is impossible for more than six product a�ributes to contribute to the choice of one brand over another. Using the mul�a�ribute

model of a�tude forma�on, explain why you agree or disagree with that statement. 11. According to the mul�-a�ribute model, a�tudes drive behavior and beliefs drive a�tudes. This should make the analysis and predic�on of brand choice pre�y

straigh�orward. What factors are likely to reduce the explanatory and predic�ve accuracy of the model in real life? 12. How has the Internet changed the way in which consumers search for informa�on about products? Provide examples to support your observa�ons. 13. Se�ng aside the comparisons made in the chapter, how do you think retail buying and organiza�onal buying behaviors differ from each other? 14. Consider the three different types of B2B buying situa�ons: straight rebuy, modified rebuy, and new task buying. Where do you suppose the greatest number of

transac�ons occurs? Greatest dollar volume? The highest average purchase price? Why? 15. Many organiza�ons have become increasingly dependent on the Internet to facilitate different stages in the organiza�onal buying process. Which ones are most

commonly handled online? What are the advantages associated with using the Internet for these ac�vi�es? The risks?

Key Terms

Click on each key term to see the defini�on.

aspira�onal audience (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The por�on of a market that hopes to someday be able to afford the purchase of high-status brands.

aspira�onal brands (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Brands that status seekers would like to own for the purpose of demonstra�ng their wealth or high social status but cannot afford to buy.

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a�tude (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The feeling of liking or disliking something. It is a rela�vely stable and enduring emo�onal response that directs our behavior toward the object of the a�tude.

behavioral learning (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A form of passive learning that takes place in response to external s�muli and events.

buy phases (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Stages that organiza�ons follow when making purchasing decisions.

buyers (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Professional purchasing specialists who iden�fy suppliers, arrange terms of sale, and carry out the contractual procedures required to facilitate the sale of the product.

buying center (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A cross-func�onal decision making unit composed of all the people who par�cipate in or influence the decision making process.

classical condi�oning (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A form of behavioral learning in which a previously known s�mulus that elicits a posi�ve response is repeatedly paired with another, neutral s�mulus. When a subject experiences this paired associa�on of s�muli several �mes, he passively learns to associate the previously neutral s�mulus with the pre-exis�ng posi�ve feelings associated with the ini�al posi�ve s�mulus.

cogni�ve dissonance (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Feelings of dissa�sfac�on or insecurity that a buyer feels about the purchase they have made.

cogni�ve learning (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

An ac�ve learning process based on informa�on processing.

considera�on set (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The specific brand alterna�ves being ac�vely considered by the decision maker from among the evoked set.

conspicuous consump�on (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Buying and displaying expensive brands as a way to convey a high status image.

consumer confidence (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

An assessment of how op�mis�c consumers feel about the future state of the economy and their personal financial situa�on. It is generally regarded as a leading economic indicator.

deciders (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The individual team member or members who make the final purchase decision.

determinant a�ributes (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Brand features that are used by consumers to discriminate between brands in the mul�-a�ribute purchase decision process.

discre�onary income (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The spendable por�on of disposable income available to households a�er deduc�ng the cost of necessi�es such as shelter.

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disposable income (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The amount of money that households have available to spend a�er accoun�ng for income taxes.

evalua�on of alterna�ves (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

This stage in the high involvement purchasing process entails the evalua�on of alterna�ve brands in accord with the processes defined by the mul�-a�ribute model.

evoked set (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Total number of brands that the buyer knows about in the product category he or she is evalua�ng.

external search (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

This relates to the acquisi�on of new informa�on from sources outside ourselves such as adver�sing, Internet searches, and discussions with friends.

gatekeepers (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

People within the organiza�on who control the flow of relevant purchase- and product-related informa�on.

general need descrip�on and product specifica�on (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The stage where the problem that was ini�ally iden�fied is translated into a general need descrip�on.

hedonic products (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Brands geared primarily toward sa�sfying the drive for experien�al pleasures.

influencers (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Individuals who a�empt to affect the outcome of the process, o�en through the expression of their expert opinion. They may offer sugges�ons on the func�onal or technical specifica�on of product requirements.

informa�on search (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The second stage in the five-step purchase decision process model; occurs when consumers seek informa�on to help them be�er understand and solve the problem.

internal search (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Seeking relevant product informa�on from a scan of one's own memory.

involvement (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The perceived relevance or importance of a product to our wants and needs.

leading economic indicator (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A sta�s�cal measure that points to posi�ve or nega�ve changes in the na�onal economy ahead of the actual changes.

learning (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A term used to describe the process by which people acquire new knowledge and preferences.

making the transac�on or ordering process rou�ne (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Efforts to standardize the process for subsequent rou�ne orders and future product reorders.

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modified rebuy (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A B2B purchase decision that involves limited decision making and problem solving.

mo�va�on (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The internal state or processes that drive people to engage in goal-oriented behavior. Within the context of marke�ng, an internal drive to purchase products or services that consumers believe will fulfill conscious and unconscious wants and needs.

mul�-a�ribute models (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Conceptual and mathema�cal models that specify consumer a�tudes toward brands as a composite of beliefs about product a�ributes, weighted by the importance of those categories of beliefs.

new task buying (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The most complex of the three buy classes. A new task purchase requires greater effort in gathering informa�on and evalua�ng alterna�ves because the company has not previously made a similar decision.

organiza�onal markets (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

B2B buyer markets composed primarily of manufacturers, wholesalers, retailers, and government agencies.

performance review (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The buyer's systema�c, periodical reviews of the efficiency and effec�veness of current suppliers.

post-purchase evalua�on (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The final stage of the purchase decision process where consumers respond with sa�sfac�on or remorse to the choice they have made.

problem recogni�on (consumer buying) (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

First stage in the five-step purchase decision process model; occurs when a consumer becomes aware of a need that must be met and recognizes that a par�cular product or service is required.

problem recogni�on (organiza�onal buying) (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The process is ini�ated when a problem or need is recognized.

proposal solicita�on (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The stage in the purchase process where buyers invite qualified and approved suppliers to submit proposals.

purchase decision (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The fourth stage of the purchase decision process, where consumers choose between the contending brands.

purchase decision process five-stage model (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

An illustra�on of the steps involved in high involvement decision making.

social class (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A division or group within a society that shares a similar social and economic status.

straight rebuy (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A habitual purchase decision typical of the low involvement purchases made by B2C buyers.

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subcultures (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Groups of people who are differen�ated from the broader culture in which they live by shared beliefs and characteris�cs that iden�fy the groups as dis�nct from the whole.

supplier selec�on (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The evalua�on and selec�on of the winning supplier, usually based on the results of a supplier evalua�on model.

supplier/source search (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The processes used by buyers to iden�fy poten�al suppliers.

users (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

People within the firm who will be end users of the product being purchased.

Web Resources

A site created by Professor Lars Perner that includes a broad array of informa�on on the topic of consumer behavior. Much of the content on Professor Perner's site addresses advanced topics in the field. h�p://www.consumerpsychologist.com (h�p://www.consumerpsychologist.com)

A crea�ve and thought-provoking examina�on of the impact of social class in America. It is a companion website to the PBS documentary "People Like Us." h�p://www.pbs.org/peoplelikeus/ (h�p://www.pbs.org/peoplelikeus/)

This site is the home of the U.S. Consumer Product Safety Commission, which is charged with protec�ng the public from dangers associated with unsafe consumer goods. The site includes informa�on on product recalls, child safety issues, and reports on past inves�ga�ons. h�p://www.cpsc.gov (h�p://www.cpsc.gov)

This site is a special sec�on of the Psychology Today website devoted to repor�ng on psychological research on topics including adver�sing, the impact of social status, and decision making. h�p://www.psychologytoday.com/basics/consumer-behavior (h�p://www.psychologytoday.com/basics/consumer-behavior)

This site is a link to the ar�cle "Predic�ng Consumer Behavior with Web Search," from the Proceedings of the Na�onal Academy of Sciences (Goel, Hofman, Lahaie, Pennock, and Wa�s, 2010). It illustrates how the volume of queries on search engines can be used to predict near-�me events. They cite examples related to opening weekend box-office revenue for feature films, first-month sales of video games, and the rank of songs on the Billboard Hot 100 charts. h�p://www.pnas.org/content/107/41/17486.full.pdf+html (h�p://www.pnas.org/content/107/41/17486.full.pdf+html)