BUS602: Marketing Management

4a. Describe the characteristics of consumer marketing and buyer behavior

• What are the differences between high-involvement and low-involvement purchase decisions?
• What are the stages in the consumer buying process?
• What are the factors that impact consumer decision-making?
  

Routine response behavior is when consumers make relatively automatic purchases based on limited information or information they learned in the past. Impulse purchases are when consumers make an unplanned purchase without previous thought. Both of these types of buying decisions are considered low-involvement purchasing decisions because they carry little risk if a mistake is made.

Consumers engage in extended problem solving when they purchase higher-priced items and carry a greater risk if a mistake is made. These purchases are considered high-involvement purchasing decisions, and consumers will spend a considerable amount of time gathering information before making a purchase decision.

Whether a consumer makes a simple purchase or a complex purchase, they will go through the same process. The amount of time spent on each stage will vary depending on the cost of the item and the importance associated with making the right decision. The stages of the buying process are need recognition, information search, product evaluation, purchase decision, post-purchase evaluation, and product disposal.

Many factors influence our buying behavior. These can include the situations in which we find ourselves, store environments, the time of day, and the weather. Social and cultural factors can affect our decisions, lifestyles, and the people we associate with. Our mood and motivations impact our decisions (be sure to review Maslow's Hierarchy of Needs) and how we perceive the world around us. Of course, general demographics play a role in our purchase choices. Additionally, the influence of all of these factors can change as we age, mature, and go through different phases of the family life cycle.

To review, see The Consumer's Decision Making Process, Impulse Buying, Factors That Influence Consumers' Buying Behavior, and More on Factors.

4b. Explain the aspects of organizational markets and buying procedures 

• What are the primary characteristics of a business-to-business market?
• What are the stages of the B2B buying process?
• What are the different types of B2B buying situations?
• What is a buying center, and who are its members?
  

In a business-to-business (B2B) market, there are generally fewer customers than in a business-to-consumer market, and a small number of customers account for the company's sales. More transactions have larger dollar amounts, and the purchase decision process is lengthy. There is a greater reliance on personal selling and more rigid product standards.

While there are some similarities between a business-to-consumer purchase and a business-to-business purchase, the differences are significant. The B2B buying process begins the same way, with need recognition. However, this is where it diverges from a consumer purchase process. The next step is to describe and quantify the need, followed by a search for potential suppliers. This is followed by a request for proposal (RFP) from those suppliers, which are then evaluated and a supplier selected. The order is then agreed upon, and a purchase is made. As with all purchases, a post-purchase evaluation is conducted.

B2B buying situations are similar to consumer purchases. A business may make a straight rebuy when the company buys the same products from the same supplier. A new-buy situation is when a company buys something for the first time. A modified rebuy is when a company buys something they have purchased in the past but makes some changes such as product updates, delivery options, or quantities.

A buying center in an organization comprises the people who will be involved in making purchase decisions. The center members include initiators, who are those who first identify a need. The users in an organization are the people who will actually use the product and may also be the initiators. Influencers may or may not use the product but can add their experience to the buying decision. Gatekeepers control the flow of suppliers who have access to the decision-makers within the company. The deciders are the people who ultimately make the purchase decision. The position in an organization for a decider can vary based on the cost and importance of the purchase itself.

To review, see Characteristics of B2B Markets, Stages in the B2B Buying Process, and Buying Centers.

4c. Describe the distinctive characteristics of marketing services 

• What are the "4 Is" of marketing services?
• How can a service business benefit from referrals, reactivation, demonstrating results in advance, and personal interaction?
  

Services differ in many ways from tangible goods. As a result, they can be more difficult to market. The 4 I's of service marketing include intangibility (because they cannot be touched and may not be seen), inconsistency (because they are delivered by people, which can vary from provider to provider), inseparability (because the service and the provider cannot be separated), and inventory (because services cannot be stored).

When a company does a good job for a customer, they are more likely to refer you to other customers. However, sometimes companies have to ask for those referrals. When doing so, it is important to ask for a few other companies similar to this company since they are more likely to have the same purchase needs.

Reactivation is when a company utilizes other aspects of their business to bring in new business. This is when a company follows up on all leads and sends personalized emails to determine levels of interest, which can open up new opportunities. Additionally, companies can better leverage their websites for lead generation by providing valuable information and content.

Sometimes, a company can benefit from giving away some information or content for free. In this way, a potential customer can see the value you are offering and recognize that what they pay for can be even more significant.

If possible, conducting workshops, conferences, webinars, and other special events can highlight what a service organization has to offer in a personal and direct way. As many people aren't comfortable speaking in public, these events will enable your company to stand out, giving your organization a competitive advantage. Personal interaction between a company and their customers can help build stronger relationships, generate customer loyalty, and ensure that customers' interests are most important.

Having a sound and effective presentation is important. This can highlight the company's specific process, differentiating their offerings relative to the competition.

To review, see The "4 Is" of Service Marketing and Services Marketing.

Unit 4 Vocabulary 

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• B2B buying process
• business-to-business markets
• buying behavior factors
• buying center
• complex purchases
• free content
• high-involvement purchase decisions
• impulse purchases
• inconsistency
• information search
• inseparability
• intangibility
• inventory
• low-involvement purchase decisions
• Maslow's Hierarchy of Needs
• modified rebuy
• need recognition
• new-buy
• personal interaction
• post-purchase evaluation
• product disposal
• product evaluation
• purchase decision
• reactivation
• referrals
• straight rebuy