Notesale: Turn your study into money

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Chapter 3: Understanding Customer Behaviour
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Marketers have to empathize with customers + understand the needs, wants + behaviour
Transactions – individual relationships between buyers + sellers
Transvections – sequence of transactions through the supply chain
Consumer Acquisition Process (six stages)
o Motive Development
 Consumers decide about their needs / become aware of it
o Information Gathering
 Look for alternative ways
 Active – search / passive – open for information but not searching for it
 Internal – consider what they already know / external – seek advice +
information
o Proposition Evaluation
 Rational – e
...
cost / irrational – e
...
desire criteria to rank various offerings
 Customer has an evoked set of products to evaluate (considerable offerings)
o Proposition Selection
 Select which fits the needs best
 Sometimes need for re-evaluation because the chosen product is not
available
o Acquisition/Purchase
 Regular (low involvement in decision-making, bought before) or special (one
off or infrequent, higher involvement) purchase
 Infrequent (and large) purchases – marketer has to try to ease the pain of
payment (e
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return policies)
o Re-evaluation
 Can lead back to any of the prev
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g
...
g
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(81% takes place person to
person, 10% by phone, 9% online)
o Celebrity endorsement
 Social grade – classification of the population into groups (depending on their work) –
consumers make purchases based on their socio-economic position within society NOT really
in use anymore!
 Lifestyle
o The manner in which someone deals and copes with psychological + physical
environment on a day-to-day basis
o Activities, interests, opinions
o Marketers fit around a customers´ lifestyle
Organizational Buying Behaviour
 High financial value, product complexity, large value of individual orders, risk + uncertainty
 Decision-making unit (DMU) / buying centre
o Informal groupings
o Vary in composition + size
o Size + form of DMU is not static – changes with the nature of the buying task
o Determined by interpersonal relationships

o Initiators – start the process with a request
o Users – use product + evaluate performance
o Influencers – technical specification + evaluation of alternatives
o Deciders – purchasing decision (most difficult to identify)
o Buyers – select suppliers + manage the process
o Gatekeepers – control type +flow of information to the organization
 Ease of doing business is the measure for a supplier-customer relationship
o Trust, interdependence, integrity + communication
 New task – high risk, little collective experience, large number of decision participants, a lot
of information, long period of time
 Modified rebuy – reduced uncertainty (not eliminated), request for modifications, fewer
people involved
 Straight rebuy – routine, approved list of suppliers, no other people involved until things
change drastically
 Electronic purchasing systems empower employees to make purchases (under control) –
employees more involved, process is speeded up, costs reduced, managers can spend more
time with other higher priority activities
Buyphases
 Need/Problem recognition – identification of a gap + its size
 Product specification – desired characteristics
 Supplier + Product search – match the specification, meet requirements, review the market
 Evaluation of proposals – prepared professionally, criteria: purchase order specification +
evaluation of the supplying organization
 Supplier selection – DMU does supplier analysis, purchasing from several suppliers at the
same time or in rotation (disadvantage: costs – miss out on discounts for high value) or
purchasing from one supplier (build long-term buyer-supplier relationship)
 Evaluation – order is written to selected suppliers > criteria for evaluation: responsiveness to
enquiries, modifications to the specification + timing of deliveries
Role of purchasing in organizations
 Collaborative approach to purchasing improves business performance > build long-term
relationships with suppliers, strategic procurement – negotiate on a cooperative basis
 Issues
o Increasing customer sophistication – more specialized
o Increasing competition – more attention to internal costs + operations > purchasing
policies, processes + procedures have increased in importance
o Strategic issues – make or buy decision, the growth of the purchasing function, the
integration of the purchasing function
Six main purchasing strategies
 Price Minimizer – lowest price possible, promotes competition between suppliers
 Bargainer – long-term collaboration with selected supplier
 Clockwiser – network relationships, careful coordination of activities performed by each
supply network partner
 Adaptator – accommodate to the particular needs of a buyer
 Projector – development partners, close collaboration during a project > when completed
the continue independently
 Updator – collaboration in research + development, continuous, supply network



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