Introduction to Buyer BehaviourDr Brian Monger

Copyright February 2014 This Power Point program and the associated documents remain the intellectual property and the

copyright of the author and of The Marketing Association of Australia and New Zealand Inc.

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Dr. Brian Monger

• Brian Monger is the CEO of MAANZ International and a Professional marketer and consultant with over 40 years

experience.

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Outline

• Buyer behaviour refers to the behaviour that buyers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

• The study of buyer behaviour is the study of how individuals make decisions to spend their available resources - time, money, effort - on consumption-related items.

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Buyer behaviour includes the study of:

• What they buy,• Why they buy it,

• When they buy it,• Where they buy it,

• How often they buy it, • How they use it

• How often they use it.

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Different products evidence different buying motivations

• Buyer researchers are able to provide marketers with buyer orientated information to enhance their product and marketing communication.

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Personal Buyers and Organisational Buyers

• The Personal Buyer buys goods and services for his or her own use, or as a gift for a friend.

• The Organisational Buyer encompasses profit and not-for-profit businesses, government agencies, and institutions.

• The marketer must take account of who is the end-user of this consumption.

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Buyers and Users (Consumers)

• The person who makes a product purchase is not always the user, or the only user, of the product in question.

• Buyers are not always the users, or the only users, of the products they buy, nor are they necessarily the persons who make the product selection decisions.

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Buyers and Users (Consumers)

• Payers, that person who pays for the purchase is not necessarily either the buyer or buyer.

• Marketers must decide at whom to direct their promotional efforts: the buyer, payer or the user.

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Buyers and Users (Consumers)

• Buyer behaviour research also considers the uses buyers make of the goods they buy and their subsequent post-purchase evaluations.

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Buyers and Users (Consumers)

• Buyer researchers are also interested in how individuals dispose of their once-new purchases.

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Buyer Behaviour as an academic discipline and an applied field

• The initial thrust of buyer research was from a managerial perspective. Marketing managers wanted to know the specific causes of buyer behaviour, and how people receive, store, and use consumption-related information, so that they could predict buyer behaviour and influence

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Buyer research describes the process and tools used to study buyer behaviour.

• The two theoretical perspectives are:

• Positivist – objective and empirical, seeking causes for behaviour and conduct research that can be generalised to larger populations. This provides data for strategic managerial decisions.

• Interpretivist – qualitative, based on small samples that seek to find common patterns of operative values, meanings and behaviours across consumption situations.

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The Interdisciplinary Nature of Buyer Behaviour Research

• There are a number of reasons why the study of buyer behaviour developed, such as:

• Marketers had long noted that buyers did not always act or react as economic theory would suggest.

• Buyer preferences were changing and becoming highly diversified.

• Other factors including: new product development, the buyer movement, growing consumerism, public policy, environmental concerns, non-profit marketing, and the development of international and global markets.

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Buyer behaviour embraces concepts developed in other scientific disciplines,

• Such as psychology, sociology, social psychology, cultural anthropology, and economics.

• Buyer behaviour research enables marketers to develop new market segments and is undertaken by various marketing and constituted bodies.

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Buyer behaviour

• Buyer researchers need to ask the right questions in order to design research that will address the needs of the marketer.

• Buyer research provides the basis for product development, and identifies target markets based on customer requirements. It does not guarantee commercial success but improves the chances of success.

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Why Marketers Study Buyer Behaviour

• Marketers adopted a policy of market segmentation, which called for the division of their total potential market into smaller, homogeneous segments.

• Marketers also used promotional techniques to vary the image of their products to certain target segments (now known as positioning

• Technological advancement has resulted in the rapid introduction of new products at an ever increasing rate, resulting in shorter product lifecycles.

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Why Marketers Study Buyer Behaviour

• Buyers placed increasing importance on the environment. Brands positioned to be environmentally friendly are considered favourably by buyers

• The growth of the buyer movement created an urgent need to understand how buyers make consumption decisions. Marketers needed to understand and work with the buyer protection laws developing at a Federal and State level

Why Marketers Study Buyer Behaviour

• The growth of services marketing forced marketers to deal with relatively intangible and perishable offerings to the public.

• Not-for-profit organisations are increasingly using marketing techniques, and so find the study of buyer behaviour relevant to them.

• An increased awareness on the part of business to market on a global basis in order to achieve major economies of scale. Australian marketers are now aware of the importance of international buyer research.

More AboutBuyer Behaviour

The buyer’s goal is to obtain goods and services that meet their needs and wants

buyers face varying problems associated with acquiring products to satisfy these needs and wants

People engage in purchase activities for many purposes other than consumption

buyers make specific types of decisions in order to obtain desired goods and services

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For example, a research study may ask buyers...

How they use the product

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Benefits of Customer Retention

Loyal customers

Buy more products

Are less price sensitive

Pay less attention to competitor's advertising

Spread positive word-of-mouth

Are cheaper to service

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Two Broad Types of Buyers

Personal buyers

The personal buyer buys goods and services for:

His or her own use

Use by the whole household, or a household member, or

A gift for someone else

In all contexts, the products are bought for final use by individuals (end-users)

Organisational buyers

Organisational buyer includes:

Profit businesses

Not-for-profit businesses

Public sector agencies and

Institutions (e.g. schools, churches)

In all cases, they buy products to help run their organisations

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Buyer Research: Two Perspectives

POSITIVIST APPROACH

Tends to be objective and empirical

Seeks causes for behaviour

Conduct studies that can be generalised to larger

populations

INTERPRETIVIST METHODOLOGY

More qualitative

Based on smaller samples

View each consumption situation as unique and non-

predictive

Look for common patterns across consumption situations

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The Interdisciplinary Nature of Buyer Behaviour Research

Psychology

The study of the individual

Sociology

The study of groups

Social Psychology

How individuals operate in groups

Economics

An important component of economics is the study of buyers

Inputs to the study of buyer behaviour

Cultural Anthropology

The study of humans in society

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Key Model Components

• Input Process Output

• Input = Various firms’ marketing activities + EXTERNAL social/culture influences

• Process = Decision steps + INTERNAL psychological factors (modified with experience)

• Output = Trial and repeat purchases and post-purchase evaluation

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