Business Buyer Behavior
Figure 5.6 shows a model of business buyer behavior.
Within the organization, buying activity consists of two major parts:
1. The buying center and
2. The buying decision process.
Major Types of Buying Situations
Straight rebuy: the buyer reorders something without any modifications.
Modified rebuy: the buyer wants to modify product specifications, prices, terms, or suppliers.
New-task buy: the company is buying a product or service for the first time.
Use Figure 5.6 here.
Use Key Terms Straight Rebuy, Modified Rebuy, and New Task here.
Systems selling (solutions selling) is often a key business marketing strategy because many
business buyers prefer to buy a packaged solution to a problem from a single seller.
In this situation, a buyer may ask sellers to supply the components and assemble the package or
system.
Use Key Term Systems Selling (Solutions Selling) here.
Use Discussion Question 5-4 here.
Participants in the Business Buying Process
A buying center consists of all the individuals and units that play a role in the business
purchase decision-making process.
The buying center is not a fixed and formally identified unit within the buying organization.
Use Key Term Buying Center here.
Major Influences on Business Buyers
Most B-to-B marketers recognize that emotion plays an important role in business buying
decisions.
When suppliers’ offers are very similar, buyers can allow personal factors to play a role in their
decisions.
However, when competing products differ greatly, business buyers tend to pay more attention to
economic factors.
Figure 5.7 lists various groups of influences on business buyers.
Use Figure 5.7 here.
Environmental factors include the current and expected economic environment, as well as
shortages of key materials.
Technological, political, and competitive developments can also affect business buyers.
Culture and customs can also influence buyer reactions to the marketer’s behavior and strategies.
Organizational factors are important because each buying organization has its own objectives,
policies, procedures, structure, and systems.
Interpersonal factors influence the business buying process. These can be very difficult to
ascertain.
Individual factors are involved as well. Each participant in the business buying process brings
in personal motives, perceptions, and preferences.
Individual factors are, in turn, influenced by personal characteristics such as age, income,
education, professional identification, personality, and attitudes toward risk.
Use Chapter Objective 5 here.
Use Figure 5.8 here.
Use Critical Thinking Exercise 5-8 here.
Use Marketing Ethics here.
The Business Buying Decision Process (Figure 5.8)
1. Problem recognition: The buying process begins when someone in the
company recognizes a problem or need that can be met by acquiring a
specific product or service.
2. A general need description is generated to describe the characteristics
and quantity needed of an item.
3. The product specification includes the technical product specifications.
Product value analysis is an approach to cost reduction in which
components are studied carefully to determine if they can be redesigned,
standardized, or made by less costly methods of production.
Use Key Term Product Value Analysis here.
4. A supplier search is conducted to find the best vendors. The newer the
buying task, and the more complex and costly the item, the greater the
amount of time the buyer will spend searching for suppliers.
5. The proposal solicitation is the stage in which the buyer invites qualified
suppliers to submit proposals.
6. Supplier selection occurs after the buying center reviews the proposals.
7. An order-routine specification includes the final order with the chosen
supplier or suppliers. Many large buyers now practice vendor-managed
inventory, in which they turn over ordering and inventory responsibilities
to their suppliers.
8. Buyers conduct a performance review. This review may lead the buyer to
continue, modify, or drop the arrangement with the seller.
Engaging Business Buyers with Digital and Social Marketing
E-Procurement and Online Purchasing
Online purchasing (e-procurement) has grown rapidly in recent years.
Companies can do e-procurement in any of several ways.
They can conduct reverse auctions, in which they put their purchasing requests online
and invite suppliers to bid for the business.
They can use online trading exchanges, through which companies work collectively to
facilitate the trading process.
Companies can set up their own company buying sites.
They can create extranet links with key suppliers.
Use Key Term E-Procurement here.
Business-to-business e-procurement yields many benefits.
1. It shaves transaction costs and results in more efficient purchasing for both buyers and
suppliers.
2. It reduces the time between order and delivery.
3. It frees purchasing people to focus on more-strategic issues.
The use of e-purchasing presents some problems.
1. It can erode decades-old customer-supplier relationships.
2. It can create potential security disasters.
Business-to-Business Digital and Social Media Marketing
Today’s B-to-B marketers are now using a wide range of digital and social media marketing
approaches.
Digital and social media marketing have rapidly become the new space for engaging business
customers.
Compared with traditional media and sales approaches, digital and social media can create
greater customer engagement and interaction. B-to-B marketers know that they aren’t really
targeting businesses, they are targeting individuals in those businesses who affect buying
decisions.
Use Discussion Question 5-5 here.
Marketing by the Numbers: Evaluating Alternatives
One way consumers can evaluate alternatives is to identify important attributes and assess how
purchase alternatives perform on those attributes. Consider the purchase of a tablet. Each
attribute, such as screen size, is given a weight to reflect its level of importance to that consumer.
Then the consumer evaluates each alternative on each attribute. For example, in the table below,
price (weighted at 0.5) is the most important attribute for this consumer. The consumer believes
that brand C performs best on price, rating it 7 (higher ratings indicate higher performance).
Brand B is perceived as performing the worst on this attribute (rating of 3). Screen size and
available apps are the consumer’s next most important attributes. Operating system is least
important.
Importance Alternative Brands
Attributes Weight (e) A B C
Screen size 0.2 4 6 2
Price 0.5 6 3 7
Operating system 0.1 5 5 4
Apps available 0.2 4 6 7
A score can be calculated for each brand by multiplying the importance weight for each attribute
by the brand’s score on that attribute. These weighted scores are then summed to determine the
score for that brand. For example, ScoreBrand A = (0.2 x 4) + (0.5 x 6) + (0.1 x 5) + (0.2 x 4) = 0.8 +
3.0 + 0.5 + 0.8 = 5.1. This consumer will select the brand with the highest score.
5.6. Calculate the scores for brands B and C. Which brand would this consumer likely
choose? (AACSB: Communication; Analytic Reasoning)
Answer:
ScoreBrand B = (0.2 x 6) + (0.5 x 3) + (0.1 x 5) + (0.2 x 6)
= 1.2 + 1.5 + 0.5 + 1.2 = 4.4
ScoreBrand C = (0.2 x 2) + (0.5 x 7) + (0.1 x 4) + (0.2 x 7)
= 0.4 + 3.5 + 0.4 + 1.4 = 5.7
Based on this analysis, the consumer would probably select Brand C because it has the
highest score.
5.14. Which brand is this consumer least likely to purchase? Discuss two ways the marketer of
this brand can enhance consumer likelihood of purchasing its brand. (AACSB:
Communication; Reflective Thinking; Analytic Reasoning)
Answer:
This consumer is least likely to select brand B because it has the lowest score. The marketer
can attempt to change consumer attitudes toward its brand in three ways:
a. Change beliefs—if consumers believe a brand does not perform well on an attribute,
then the marketer can attempt to change that belief. This consumer believes brand B
is more expensive than the other alternatives. This is the most important attribute for
consumers, so the marketer needs to address this, perhaps by lowering price.
b. Change attribute importance—the marketer of brand B can attempt to influence how
consumers evaluate product attributes. Brand B performs very well on screen size
and availability of applications, but these attributes are not rated as very important.
Increasing the importance weight on those attributes will help this brand considerably
because it performs better than both competitors on screen size and almost as well at
brand C on applications.
c. Add a new attribute to consider—the marketer of brand B could attempt to get
consumers to consider an attribute that is not on the list, such as battery life. The
added attribute needs to be something that will be considered important by consumers
and be one that the brand would be perceived as better than the competition for this to
be successful.
Video Case: IMG Worldwide
IMG Worldwide is the world’s largest sports entertainment media company. In years past, IMG
was all about professional golf and tennis marketing. But today, IMG handles sales and
marketing activities for 70 to 80 colleges, making college sports marketing the company’s
highest-growth business. In short, IMG handles anything and everything that touches the college
sports consumer short of actually playing games on the court or field.
Although you might think that all college sports fans are created equal, IMG finds that nothing
could be further from the truth. How different fans consume sports and sports-related activities is
affected by geographical, generational, and institutional factors. IMG focuses on
comprehensively understanding the process that consumers go through to view or attend a
sporting event. It then connects with consumers at each and every stage.
After viewing the video featuring IMG Worldwide, answer the following questions:
5-15. What “product” is a college athletics department selling?
5-16. Discuss how a college sports fan might go through the buying decision process,
providing examples for each stage.
5-17. Of the four sets of factors affecting consumer behavior, which most strongly affects
how college sports fans consume a sport?
Company Cases
See Appendix 1 for cases appropriate for this chapter.
Case 5, UPS: “We Love Logistics”—Put UPS to Work for You and You’ll Love Logistics
Too. Business buying decisions are influenced by numerous factors that go way beyond dollars
and cents. UPS recognizes the value business clients place on providing full-service logistics
solutions.
Case 1, FedEx: Making Every Customer Experience Outstanding. Businesses and consumers
have various needs when it comes to shipping letters and packages. From the time FedEx opened
for business more than 40 years ago, the company strategy has been built on a foundation of
obsessive customer focus and meeting those needs at every stage.
Case 7, Target: Where Store Brands Offer More Than Low Prices. So many factors influence
the decisions consumers make. Target understands this and has focused on making the purchase
decision easy with a comprehensive strategy based on store brands.
MyMarketingLab If assigned by your instructor, complete these writing sections from your
Assignments in the MyLab.
5-18. Discuss how lifestyle influences consumers’ buying behavior and how marketers
measure lifestyle. (AACSB: Communication; Reflective Thinking)
5-19. Describe the characteristics of a new product that affect its rate of adoption. Which
characteristics will affect how quickly the new digital and social media services described
above will be accepted by consumers in the United States? (AACSB: Written and Oral
Communication; Reflective Thinking)
GREAT IDEAS
Barriers to Effective Learning
1. By and large, students have not been exposed to the consumer behavior concepts in this
chapter before. If they have taken a sociology or human behavior course, chances are very high
that the concepts were not presented in a way that allowed the students to understand them as
they apply to business in general and marketing in particular. After presenting the concepts of
consumer behavior, have the students discuss the concepts in terms of their own buying habits,
their backgrounds, and how they differ from others in the class.
2. There is a lot of material in this chapter; although it hits only the high points of consumer
behavior, the authors have done a good job of summarizing the constructs in a way that allows
students to comprehend, albeit in a basic way, why these concepts are important to marketing
managers. Explaining that consumer behavior is usually offered as a course unto itself can
actually relieve some of their anxiety. Also helpful is continually reminding them of how they
can apply this material to more fully appreciate their own motivations for purchases. This can
then lead them to understand how a marketer could approach understanding consumers’ motives
in general.
3. Understanding business buyer behavior and the business buying process can be especially
difficult for students. Very few have ever had any experience with business purchasing decisions.
This requires thorough explanation; the strategic use of personal experience in this regard is
particularly helpful. If the instructor has no personal experience in business buying situations, it
could be very helpful to bring in a guest speaker for this topic.
4. Business buying centers can be a very nebulous topic for students, particularly their
dynamic nature. Discussing the importance and uses of inter-departmental teamwork in this
section can be highly enlightening. This can then lead to a discussion of the different types of
influencers, users, and so forth that could be found in a business buying center, and what their
functions could be in the buying decision–making process.
Student Projects
1. Every culture contains smaller subcultures. In the U.S., the rapidly increasing Hispanic
market holds opportunities for many businesses. Look around your community and make a
list of those businesses that may well prosper from this increasing subculture. Why do you
think this is so?
2. Within the U.S. Hispanic market there exist many distinct subsegments. Research these
subsegments and detail the characteristics unique to each.
3. What social class do you belong to? Why? What would it take for you to move up a class?
4. How does social class in the U.S. differ from social class in India?
5. Think about the online social networks (such as Facebook or MySpace). How are marketers
trying to use these networks to promote their products?
Small Group Assignment
Form students into groups of three to five. Each group should read the opening vignette to the
chapter on Harley-Davidson. Each group should then answer the following questions:
1. Who is the Harley-Davidson customer?
2. How has Harley-Davidson gained such a devoted following?
3. What is Harley-Davidson doing to ensure the customer experience remains at a high level?
Share your findings with the class.
Individual Assignment
Take a look at the websites for Apple (www.apple.com), Dell (www.dell.com), and Lenovo
(www.lenovo.com). How are each of these companies appealing to their potential customer? Are
they using emotions, facts, comparisons, or other factors? How effective do you believe each of
them to be?
Think-Pair-Share
Consider the following questions, formulate answers, pair with the student on your right, share
your thoughts with one another, and respond to the questions from the instructor.
1. Describe the “black box.”
2. Describe a cultural shift that has had an impact on marketers.
3. Highlight some of the more significant differences in purchase habits between
African-Americans and the U.S. Hispanic market.
4. What factors determine social class in the U.S.?
5. How are online social networks changing the face of marketing?
Classroom Exercise/Homework Assignment
Age and lifecycle changes have a dramatic impact on the many and type of products we purchase
and consume. Go to Toyota’s website (www.toyota.com) and examine their complete product
offering. How has Toyota tried to reach consumers of all ages and stages of the lifecycle?
Classroom Management Strategies
This chapter has a tremendous amount of material. Consumer buying behavior, in particular,
presents an incredible amount of information, and all of this information is key to understanding
marketing. As in Chapter 3, it is helpful to tie in both sociological and psychological principles in
discussing this chapter.
1. More than half the class should be spent on Consumer Markets and Consumer Buyer
Behavior. A thorough understanding of this section will make the business part of this
chapter that much easier to comprehend. It is divided up into the “why” of buying and
the “how” of buying. The former is guaranteed to never have crossed the students’
mind prior to this, so lots of examples will help drive home the importance of
understanding why people buy what they do. Using their own buying history helps,
particularly when really drilling down into why they really choose the school they are
attending, the clothes they are wearing, etc. The actual buying process can be
illustrated through examples of buying something very complex, such as a computer
or a car, and then something very simple, such as salt. The new product buying
decision process is also covered, and several minutes should be spent on this topic.
2. The remaining third or so of this class will then be spent on Business Markets and
Business Buyer Behavior. Again, the section is divided into the “why” of buying and
then the “how.” There is also a discussion of the different market structure and
demand characteristics of business markets. The terminology of business buying is
different, and you should be certain the students understand the differences between
straight rebuy, modified rebuy, and new tasks. Also, the buying process is more
complex and more likely to be followed in practice, particularly for very expensive or
very large purchases. Students will need to be aware of the eight steps in the business
buying process as well as all of the participants in this process and the roles they play.
PROFESSORS ON THE GO
Understanding Consumer and Business Buyer Behavior
Key Concepts
Consumer behavior model
Cultural, social, personal, and psychological factors
A bank used Consulting Business Intelligence Values and Lifestyles (VALS) research
to profile a customer segment that did not use any automated or electronic services.
Based on your knowledge of this lifestyle classification system, speculate what might
be the primary and secondary VALS type for this customer segment.
In general, how are decisions and the decision processes for business markets similar
to those of consumer markets? How are they different?
List four primary characteristics of the business market.
Key Concepts
Complex, dissonance-reducing, habitual, and variety-seeking behavior
The stages of the buyer decision process
New product adoption process
Environmental, organizational, interpersonal, and individual influences
The business buying process
In a small group, discuss how the buyer decision process for a college student would
differ from that of a snowboarder in purchasing a backpack. How would you use this
knowledge to develop an advertising plan?
The vice president of marketing for a regional doughnut retailer says, “We believe our
customers exhibit high involvement buying behaviors.” Do you agree? Why or why
not?
Assume that while you were vacationing in Australia, you ran across a book
published there that you believed would do well in the United States market. You
negotiate U.S. distribution rights with the Australian publisher and set about getting
the book into the major U.S. outlets—Amazon.com, Barnes & Noble, and iTunes. Go
to the Web sites for these companies and find out how you list books with them. How
have they used the Internet to simplify their buying process? Do their procedures
meet the needs of small businesses that want to sell to these giants? Why or why not?