Consumer & Organisation Buying Behaviour

 

Consumer Buying Behaviour: -

All the actions taken either offline or online by a consumer in the process of buying a product/service. There are certain factors that affect consumer’s mind behaviour such as: -

1.      Cultural factors: -

a.      Culture

b.      Sub-culture

c.       Social class

2.      Social factors: -

a.      Reference groups – People with whom we have direct/indirect contact with

i.                    Primary reference group – family members, friends, etc.

ii.                  Secondary reference groups – e.g.; colleagues, professionals, etc.

b.      Family –

i.                    Family of orientation: parents, siblings, blood relation, etc.

ii.                  Family of pro-creation: spouse, in-laws, etc.

c.       Role & Status

3.      Personal factors: -

a.       Age and stages of the life cycle

b.      Occupation and Economic circumstances

c.       Lifestyle

d.      Personality

4.      Psychological factors: -

a.       Motivation

i.                    Biogenic needs

ii.                  Psychogenic needs

b.      Perception

c.       Learning

d.      Beliefs and Attitudes

Consumer Buying Decision process: -

1.      Problem Recognition – Here, we identify the problem. It is triggered by either internal or external stimuli. Internal stimuli cover the basic needs whereas the external stimuli involve societal needs, self-actualization needs.

2.      Information Search – Finding the information regarding whatever product you want to buy.

3.      Evaluate Alternatives

4.      Purchase Decisions

5.      Post-purchase Behaviour

Organizational Buying Decisions process: -

1.      Problem Recognition: To develop a new product/strategy.

2.      General Need, Description and Product Specifications: In which quantity/quality and characteristics you want your products to be.

3.      Supplier Search: Searching for different suppliers.

4.      Proposal Solicitation: The proposal that the seller gives to the buyers.

5.      Supplier Selection: On the basis of our needs, demands, manufacturing capacity, we select the suppliers.

6.      Order Routine Specifications: When you negotiate on the basis of price, quantity and quality.

7.      Performance Review: Buyer will periodically review the performance of the seller whether the quality, quantity, etc. are in place or not.

Segmentation, Targeting and Positioning: -

Segmentation: To divide the whole market into homogenous groups is segmentation of the markets.

There are several types of segmentation: -

1.      Geographical Segmentation: Dividing the whole market on the basis of geography i.e.; Nations, regions, e.g.; North India, South India, etc.

2.      Demographic Segmentation: Dividing the whole market on the basis of age, life cycle, gender, generation, race and culture, ethnicity, values, beliefs, etc. for e.g.; Toddlers, Children, Adults, Gen Z, Millennials, etc.

3.      Psychographic Segmentation: Dividing the whole market on the basis of personality,

4.      Behavioral Segmentation: Dividing the whole market on the basis of consumer’s knowledge about the product.

Target Markets: Targeting of the markets on the basis of the pre-determined segments.

We target markets on the basis of 4 strategies: -

1.      Single Segment Specialization

2.      Selective/Multiple Specialization

3.      Product Specialization

4.      Market Specialization

Positioning: - Market positioning is a strategic exercise we use to establish the image of a brand or product in a consumer's mind.

5 Strategies

1.      On the basis of Product characteristics and features e.g.; Saffola advertising for Low Cholesterol in its oil

2.      On the basis of Price e.g.; positioning low-price products.

3.      On the basis of Quality of the product

4.      On the basis of Application/usage of the product

5.      On the basis of Competition

Types of products: -

1.      Consumer

2.      Industrial

Consumer Products – These are ultimately used by the consumers. They are of three types: -

a.       Convenience Products – Brought by the consumers frequently. E.g.; newspapers, milk, etc.

b.      Shopping Products – Consumers make efforts in buying these products. E.g.; Jewelry, Smartphones, etc.

c.       Specialty Products – In which you make special efforts in buying the products. E.g.; Paintings

d.      Industrial Products – They are used to manufacture finished products. E.g.; Raw material goods, machine and machine parts, Capital items – Machinery.

e.       Services and supplies – Facilitate the manufacturing process. E.g.; Painters, technician, etc.