Chapter 7

Buyer Behavior

Culture and Buyer Behavior

h Marketing and Materialism
• Marketing actions are basically undertaken in the
belief that more and better goods will bring an
increase in consumers’
consumers’ standard of living, an increase
in their satisfaction, and perhaps even more happiness
• However, when anticipating customers’
customers’ reactions to
new products and increased product choices, it is
important to note the limits on the relationship
between material affluence and personal happiness
• “Money can’
can’t buy you love.”
love.”

Local Buyer Behavior

External
Buyer Choices
Influences “Models of Man”
Product choice
Culture
Buyer Buyer Brand choice
Economics decision
characteristics Store choice
Technology process
Supplier choice
Politics

Local
Marketing
Effort

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 Local Buyer Behavior

• James Duesenberry - Relative Income hypothesis –

consumer’s well-being is a function of how much income
they have relative to their peer groups, not the actual
income

• Milton Friedman – Permanent income, defined as the

regularly expected income, is what determines an
individual’s consumption

• Thorstein Veblen – Conspicuous consumption – the

notion that people make purchases of expensive brands &
products in order to display their ability to afford them

Local Buyer Behavior

•What does the product/service do for the buyer?
• How does it fit into the consumption and use
pattern of the buyer?
• What are the core benefits?
• What is the perceived risk and how high is it?

The CORE BENEFIT often differs between local markets.

The generic function of a product depends more on the
local environment than on innate individual preferences.

• Remember: Buyers are GOAL-ORIENTED –

they buy for a reason. Point is to
understand what that reason is.

The Buyer Decision Process

Evaluation
Problem
Search of Choice Outcome
recognition
alternatives s

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 The Buyer Decision Process
h Problem Recognition
• A problem is when an individual perceives a
difference between an ideal and an actual state of
affairs
– New products often lead to tension and a recognized
“problem”
problem”
• For the local marketer it is important to recognize
that education about the core benefits might be
necessary in order to create a demand for the
product

The Buyer Decision Process

h Search
• A consumer’
consumer’s search for alternative ways to solve
the problem is closely related to his or her level of
involvement with the product category
– For product with which involvement is high, search
tends to be more comprehensive and time
consuming
– For convenience and habit purchases, the decision
process is shorter, with little need for extensive
searches or alternative evaluations
• Search intensity is dependent on the perceived
availability of the alternative
– One advantage for product with high global brand
awareness is that initial distrust is easier to overcome

The Buyer Decision Process

h Evaluation of Alternatives
• When a new product or service is in the
“consideration set”
set”
– A highly involved individual will process the available
information matching the pros and cons of the
alternatives against preferences
• Consumers can deal with multi-
multi-attribute
evaluations in several ways:
– They can use gradually less-
less-important features to
successively screen out alternatives
– A “hierarchical”
hierarchical” decision rule
– They can consider all features simultaneously:
– A “compensatory”
compensatory” rule – hard to do.

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 Fishbein’
Fishbein’s Multi-
Multi-attribute Model
Multi-attribute
evaluation
(ΣBI)

Social
forces Preference
Social
norms

Motivation Behavioral
to comply intent
Situational
factors
(P-O-P)
Choice

B = beliefs about product attributes; I = importance of the beliefs; P-O-P =

point of purchase

The Buyer Decision Process

h Choice
• The final choice of which alternative to select or
try is typically influenced by social norms and by
situational factors
• Social Norms
– Where group pressures to comply are strong social
norms influence is expected to override multiattributed
evaluation
» The social norms can be usefully analyzed by the
extended Fishbein model
– The social norms involve two aspects
– Social forces
– Motivation to comply

The Buyer Decision Process

y Outcomes
y The main question about the outcomes revolves around the
degree of customer satisfaction.
y Customer satisfaction is particularly important in mature
markets where choices are many and the needs are already well
met.
y Satisfaction engenders loyalty to the brand and to the company.
y Because buying is typically a risky choice between different
brands, the marketer has to make sure that the customer does
not encounter cognitive dissonance, a sense of possibly making
the wrong choice.
y One approach is to get satisfied customers to endorse the
product, a common strategy in advertising.

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 A Strong Brand Simplifies the
Decision Process
y -- REDUCES INFORMATION SEARCH

y -- REDUCES PERCEIVED RISK

y -- PLACES A BRAND IN THE EVOKED

CONSIDERATION SET MORE EASILY
y -- BRAND LOYALTY MEANS DECISIONS GO FAST.

y A GLOBAL BRAND CAN FOCUS ON:

y -- ATTITUDES

y -- NORMS

y -- P-O-P (Point-of-Purchase Promotions)

The Local Market Research Process

Problem Secondary data
definition
Exploratory Qualitative
research
Research Descriptive Consumer
design
surveys
Causal Trade surveys
Measurement/
scaling
Observation
Questionnaire
construction Experiments

Sampling Causal Models

Data
Fieldwork analysis

Local Market Research

FOCUS GROUPS
•Focus groups have become standard for initial exploratory
research

• In foreign markets, focus groups have the advantage of

being relatively inexpensive, can be completed quickly, and
can reach local pockets of the market

•Unfortunately, they can also constitute an unrepresentative

sample because typical screening criteria are incorrect in the
new environment or are not implemented correctly

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 Local Market Research
SURVEY RESEARCH
Consumer Surveys
Surveys of large (n = 500 and above) random samples drawn from a
sampling frame of representative product users are of central
importance in marketing research
Cultural problems involved in the typical consumer survey:
•In high context cultures especially, one cannot fully understand
consumers from their responses to standard survey questions.
• At the same time, informal face-to-face interviews are prone to bias
because of demand characteristics
• However, even if surveys are afflicted by a number of problems in
many foreign markets, they can still be useful if care is taken.

Local Market Research

TRADE SURVEYS

• Trade surveys of distribution channels and trade associations can

provide a good starting point for further data gathering and analysis
• In the U.S., the use of middlemen for information about consumers is
usually limited to the sales and scanner records of retailers and
wholesalers
• In countries with less social mobility and less diversity than the U.S.,
key informants in the trade are good sources of information about
buyers.

Local Market Research

MEASUREMENT & SCALING

•In attitude scaling, very basic factors can create

difficulties
• The cognitive and emotional concepts measured
might not be equivalent across cultures.
•This means measurement equivalence is
questionable.

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 Local Market Research

QUESTIONNAIRE CONSTRUCTION

•The questionnaire employed in the typical consumer survey

needs to be carefully pre-tested & translated into the foreign
language.
• It should then be back-translated for verification and
adjustment.

• In high context cultures the questionnaires are typically much

longer because of the need to establish the proper context for
the questions.

Local Market Research

SAMPLING

Lack of comprehensive and reliable sampling frames has

long been a problem for marketing researchers in many
countries.
• Emergence of firms that specialize in developing lists for
direct marketing and survey research is gradually resolving
this problem.
•Still sampling equivalence can be questionable because the
appropriate profiles differ (e.g. “high” income in one country
might not be“high” in another).

Local Market Research

FIELDWORK

Typically handled by a subcontracting marketing

research firm, sometimes a full-service advertising
agency
• As economic growth occurs, mature markets with
differentiated demand requiring formal and
scientific market research applications will emerge
in many countries.

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 Psychographic Profile of
Porsche’s American Customers
Percent of
Category All Owners Description
Top Guns 27 Driven and ambitious. Care about power
and control. Expect to be noticed.
Elitists 24 Old money. A car-even an expensive one-is
just a car, not an extension of on’s
personality.
Proud Patrons 23 Ownership is what counts. A car is a
trophy, a reward for working hard. Being
noticed doesn’t matter.
Bon Vivants 17 Cosmopolitan jet setters and thrill seekers.
Car heightens excitement.
Fantasists 9 Car represents a form of escape. Don’t
care about impressing others; may even
feel guilty about owning car.

BSB’
BSB’s Global Psychographic Segments
h Strivers (26%) h Consists of young people with a median age of 31
who live hectic, on-
on-the-
the-go lives. Driven to achieve
success, they are materialistic pleasure seekers for
whom time and money are in short supply.
h Achievers (22%) h Older than strivers, the affluent, assertive Achievers
are upwardly mobile and already have attained a
good measure of success. They are status conscious
consumers for whom quality is important.
h Pressured (13%) h Comprised mostly of women, cuts across age
groups and is characterized by constant financial
and family pressures.
h Adapters (18%) h Comprised of older people who are content with
their lives and who manage to maintain their values
while faced with change
h Traditionals (16%) h Are “rooted to the past”
past” and cling to the country’
country’s
heritage and cultural values.

Global Segmentation Study

100%
22 14 17
80% 12
16 Adapters
18
60% 14 Traditionals
12
19 Pressured
40% 22 18 Achievers
17 Strivers
20%
26 29
22
0%
Japan United United
States Kingdom

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Y&R’s Consumer Characteristics
Group Attitudes Work Lifestyle Purchase Behavior

Resigned Poor Unhappy Labor Shut-in Staples

Distrustful Unskilled Television Price
Struggling Poor Unhappy Labor Sports Price
Dissatisfied Craftsmen Television Discount stores
Mainstreamers Happy Craftsmen Family Habit
Belong Teaching Gardening Brand loyal
Aspirers Unhappy Sales Trendy sports Conspicuous
Ambitious White Collar Fashion consumption
magazines Credit
Succeeders Happy Managerial Travel Luxury
Industrious Professional Dining out Quality
Transitionals Rebellious Student Arts/crafts Impulse
Liberal Health Field Special interest Unique products
magazines
Reformers Inner growth Professional Reading Ecology
Improve world Entrepreneur Cultural events Homemade/grown

Understanding Industrial Buyers

h The Business-
Business-to-
to-Business (B2B) Marketing Task:
• The marketer should help the buying organization succeed.
h Industrial Buyers are influenced by the same forces as
individual consumers, but also conditioned by the
organizational culture in which they operate.
h The organizational culture reflects company policies
and ways of making decisions.
h The industrial buying process involves several stages
from problem recognition to performance review.

Industrial Buying Process

Problem recognition

Product specification

Search for suppliers

Proposal solicitation

Supplier selection

Order specification

Performance review

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 Industrial Buyers: Building
Relationship
h “Relationship Marketing”
Marketing” is important in
B2B.
• The term is applied to a marketing effort
involving
– Various personalized services
– Creation of new and additional services
– Customizing a company’
company’s offering to the needs of a
special buyer
• Takes a long-
long-term view
– Since without it, the effort required to build a
relationship is not worth it.

Relationship Marketing
THINGS A MARKETER CAN DO TO CREATE A
WORKABLE RELATIONSHIP:

• ADOPT THE BUYER’S VIEWPOINT.

• ACCEPT AND DEMAND TRANSPARENCY.

• GROW WITH THE RELATIONSHIP.

• BE PROACTIVE.

Always consider how the culture of the nation and the culture of
the organization affect relationship marketing.

Three Market Environments

EMERGING NEW GROWTH MATURE

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 Dominant Market Features
Feature Emerging New growth Mature

Life cycle stage Intro Growth Mature

Tariff barriers High Medium Low

Nontariff barriers High High Medium

Domestic competition Weak Getting stronger Strong
Foreign competitors Weak Strong Strong
Financial institutions Weak Strong Strong
Consumer markets Embryonic Strong Saturated
Industrial markets Getting stronger Strong Strong
Political risk High Medium Low
Distribution Weak Getting stronger Strong
Media advertising Weak Strong In-store
promotion

Dominant Marketing Tasks

product/market situation
task emerging new growth mature
marketing analysis
research focus feasibility economics segmentation
primary data sources visits middlemen respondents
customer analysis needs aspirations satisfaction
segmentation base income demographics life style
marketing strategy
strategic focus market development participation in growth compete for share
competitive focus lead/follow domestic/foreign strengths/weaknesses
product line low end limited wide
product design basic advanced adapted
new product intro rare selective fast
pricing affordable status value
advertising awareness image value-added
distribution build-up penetrate convenience
promotion awareness trial value
service extra desired required

Managers’ Decision Making

Styles in Different Countries
United States Japan Mexico Middle East
Delegation of Authority Yes. Believed to be Yes. Subordinate No. Authoritarian style No. Authority rests at
essential in increasing development is reflects mgr’s the top; delegation
subordinates’ primary mgt. individualism; sub- depends on personal
capabilities Function; worker ordinate development relationship
suggest-ions are sought is not mgr’s function
and accepted
Participation in Yes. Subordinates Yes. Subordinates No. May indicate to No. Chain of command
Decision Making contribute to decisions; participate in and subordinates that mgr is rigidly followed
believed to improve initiate decisions; is unsure of own job;
motivation and per consensus of all maintaining social
employees is sought distance is important
Importance of Planning High. Problem solving High. Planning is Low. Plans appear to Low. Ad hoc planning
is valued, planning is a valued, more emphasis restrict mgr’s personal
tool for decision on long-term planning expression
making emphasis on
short-term planning
Emphasis in Direct and frank Polite, respectful; Maintenance of Tone depends on
Communication Style patience in difficult pleasant relationships; position, power, or
topics avoidance of difficult family influence
issues
Commitment to Firm’s Doing well for the Firm’s and mgr’s goals Career success is Success dependent on
Objectives firm is an essential are one and the same; based on personal contacts and being of
component of career mgr identifies with relations with the “right” social
success firm superiors position

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