This document discusses customer behavior and organizational buying. It defines customer behavior as the mental and physical activities that result in decisions to purchase products and services. There are different customer types and roles including users, buyers, and payers. Business customers have specific characteristics like derived demand, price inelasticity, and fluctuating demand. Understanding customer behavior is important for businesses to achieve customer satisfaction and success. The document also examines factors that determine customer needs and wants, and discusses push and pull marketing strategies.

1. Understanding Buyer
Behaviour
Sandeep Mishra

2. What is
Customer Behavior ?
Mental and Physical activities undertaken by household
and business customers that result in decisions and
actions to pay for, purchase and use products and
services.

3. Types of Customers
Customer Types
Mental Activities
Physical Activities
Behaviours
USER BUYER
PAYER
Roles
CUSTOMERS: Types , Roles and Behaviours

4. A Customer
 A customer is a person in
either a household or an
organisational unit who plays
a role in the completion of a
transaction with a marketer or
an entity
 E.g. a household customer
purchasing a burger at a
restaurant versus the
restaurant purchasing the
burger meat, bun and
condiments to prepare the

5. Customer Roles
 User – the person who actually consumes or uses the
product and receives the benefits.
 e.g. the person who actually eats the burger
 Payer- the person who finances the purchase
 E.g. the person who provides the money to pay for the
burger
 Buyer- the person who participates in acquiring the
product
 E.g. the person who orders and/or actually hands over
the money for the burger.

6. Importance of the Roles
 The user role is important in the
actual design of the product or
service.
 The buyer role is critical: without
buyer satisfaction, the user and
purchaser cannot buy the product.
 The buyer’s task is to identify the
product or service and find a way to
acquire it.

7. The Behaviour of Customers
 Mental Activities
 E.g. assessing suitability of
products, making inferences
from advertising information
and evaluating actual
product experiences
 Physical Activities
 E.g. visiting retail outlets,
talking to salespeople and
purchasing products.

8. Customer Behaviour Domain
Consumer Products
Business Products
Consumer Services
Business Services
Household Business
Product
s
Service
s

9. Household V/S Business products and services
 Products are physical goods
 E.g. a television for
household use or a
photocopier for business
use.
 Services are intangible and
perishable
 E.g. a haircut or dentist
visit for a household
member, or accounting
and photocopier repair
services purchased by a

10. Reasons for understanding customer
behaviour.
To achieve the purpose of
business- customer
Satisfaction
To carry out the marketing
concept
To achieve a customer
focus- business democracy
Business
Success

11. Customers as competitors
 Dissatisfied customers may decide to produce the
product or service themselves.
 Customers will make, rather than buy, products if
they have the expertise, if it is convenient, cheaper
or yields a better product.

12. The rules of the customer
and the…PayerBuyer User

13. Role specialisation
 Dividing up the customer roles- User, payer and
buyer – among individuals or groups.
 The three roles may or may not be played by the
same individual.
 For Example:
o The user is neither payer nor buyer
– E.g. Pet Food
o The user is payer but not buyer
– E.g. stockbrokers
o The user is buyer but not payer
– E.g. children buying chocolates
o The user is both buyer and payer
– E.g. clothing for personal use.

14. Reasons for Role Specialisation
Product/service is:
 Unaffordable
 Subsidised
 Free
User lacks:
• Expertise
• Time
• Buying
power
• Access

15. Reasons for Role specialisation
 The user lacks expertise or adequate knowledge to
make informed choices
 E.g. asking for advice from an expert such as a
stockbroker.
 The user lacks time so delegates to employees or
family
 E.g. teens doing family grocery shopping.
 The user lacks the required buying power
 E.g. centralised purchasing departments
 The user lacks access due to laws, physical barriers,

16. Customer Needs V/S Wants
 A need is an
unsatisfactory
condition of the
customer that leads
him or her to an
action to make the
condition better.
 E.g. the need for food
due to hunger
 A want is a desire to
obtain more
satisfaction than is
absolutely necessary
to improve an
unsatisfactory
condition.
 E.g. the desire for that
food to be chocolate.
NEED WANT

17. What determines customer needs and
wants?
Personal
characteristics
•Genetic make-up
•Biogenic
•Psychogenic
Physical
Characteristics of
Environment
•Climate
•Topography
•Ecology
Individual
Context
•Personal growth
•Institutional
context
•Cultural context
Environmental
Context
•Economy
•Technology
•Public policyDeterminants of
Determinants of
wants

18. What determines customer needs?
1. Personal Characteristics of the
Individual:
• Genetics – the branch of science
dealing with heredity and
chemical/biological characteristics
– E.g. food allergies
• Biogenics – characteristics that
individuals possess at birth.
– E.g. Gender
• Psychogenics – individual states
and traits induced by a person’s
brain functioning.
– E.g. moods and emotions.

19. 2. Physical characteristics of
environment:
• Climate, including
temperature, attitude and
rainfall
– E.g. winter versus summer
clothing
• Topography - refers to the
physical condition of the
location.
– E.g. mountain bikes in certain
terrain
• Ecology, including quality of
Determinants of needs (continued)

20. What determines customer want?
1. The individual context:
• Personal worth or the financial
resources available to the
individual.
– E.g. luxury versus budget
cars.
• Institutional context- the
groups and organisations which
a person belongs.
– E.g. teen clothing styles.
• Cultural context –the influence
of a customers' culture and
cultural values

21. Managerial implications: Pull v/s Push strategies
 In a pull strategy,
marketers appeal
directly to end users,
encouraging them to
ask the buyer to
purchase the
product.
 E.g. ‘Mom, can we
get the cereal I saw
on TV?’
 In a push strategy,
marketers appeal
directly to buyer ,
encouraging them to
promote it to end
users.
 E.g. a Rs. 10 coupon
for a particular cereal
brand.
PULL PUSH

22. Customer roles and push-pull strategies
Purchase
r chooses
the
supplier
Push
marketing
(e.g. office
supplies)
Push and Pull
marketing
(e.g. cereals, office
furniture)
Third-party
decision
drivers
Pull marketing
(e.g. personal
care products,
cigarettes)
User chooses the
supplier
NO
NO
YES
YES

23. Choice of strategy
 The decision to use a push
or pull strategy depends on
who is the decision maker.
 If the buyer is the decision
maker, then a push strategy
is most appropriate.
 If the user is the ultimate
decision maker, then a pull
strategy would be more
appropriate.

24. THE CONSUMER DECISION MAKING
PROCESS
Cultural,
Social,
Individual
and
Psychologica
l Factors
affect all
steps
NEED RECOGNITION
INFORMATION SEARCH
EVALUATION OF
ALTERNATIVES
PURCHASE
POST PURCHASE
BEHAVIOUR

25. Post-purchase behaviour
Inner tension that a consumer
experiences after recognizing an
inconsistency between behaviour and
values or opinions.

26. Post-purchase behaviour
COGNITIVE
DISSONANCE
DID I MAKE A GOOD
DECISION?
DID I BUY THE RIGHT
PRODUCT?
DID I GET A GOOD VALUE?
MARKETING
Can minimize through:
EFFECTIVE
COMMUNICATION
FOLLOW-UP
GURANTEES
WARRANTIES

27. TYPES OF CONSUMER BUYING
DECISIONS
ROUTINE
RESPONSE
BEHAVIOUR
LIMITED
DECISION
MAKING
EXTENSIVE
DECISION
MAKING
LESS
INVOLVEMENT
MORE
INVOLVEMENT

28. TYPES OF BUYING BEHAVIOUR
High
Involveme
nt
Low
Involvement
Significan
t
difference
s between
brands
Few
difference
s between
brands
Complex
Buying
Behaviour
Variety -
Seeking
Behaviour
Dissonance –
Reducing
Buying
Behaviour
Habitual buying
Behaviour

29. FACTORS THAT AFFECT THE CONSUMER
DECISION- MAKING PROCESS
Cultural
Factors
Individual
Factors
Social Factors
Psychological
Factors
Consumer
decision
making
process
BUY /
DON’T
BUY
LESS
INVOLVEMENT
MORE
INVOLVEMENT

30. How Customers Use or Dispose of Products
PRODUC
T
Get Rid of it
temporarily
Get rid of it
permanently
Keep it
Rent It
Loan It
Use for
original
purposes
Convert
to new
purpose
Store It
Give it away
Trade it
Sell it
Throw it
away
To be (re)
sold
To be
used
Direct to
consumer
Through
middleme
n
To
intermediar
y

31. Categories of
Business
Customers
PRODUCERS
RESELLERS
GOVERNMENTS
INSTITUTIONS

32. ORGANISATIONAL BUYING
 Institutional buying: Buying products on behalf of
an organisation to be consumed in the course of
the organisations’s business
 Buying for resale: buying of products to be resold
unchanged as part of the organisation’s business
 Industrial buying: buying of raw materials and
other inputs to be substantially changed in the
course of the organisation’s business
 Government buying

33. INSTITUTIONAL & GOVERNMENT
MARKETS
INSTITUTIONAL MARKETS
LOW BUDGETS CAPTIVE PATRONS
GOVERNMENT MARKETS
CENTRALIZED
BUYING
OUTSIDE PUBLICS
NON-ECONOMIC CRITERIA
PUBLIC REVIEW
SUBMIT BIDS

34. Types of Business Products
Major categories of
business
products
MAJOR EQUIPMENT
ACCESSORY
EQUIPMENT
COMPONENT PARTS
RAW MATERIALS
BUSINESS SERVICES
SUPPLIES
PROCESSED
MATERIALS

35. Characteristics of Business Markets
characteristi
cs of
business
markets
MARKET
STRUCTURE AND
DEMAND
TYPES OF DECISIONS
AND DECISION
PROCESS
NATURE
OF
BUYING
UNIT
OTHER
CHARACTERISTI
CS

36. ORGANISATIONAL BUYING
CHARACTERISTICS
 Sellers serve fewer customers
 Purchasers deal directly with
suppliers
 Focus on relationships rather
than transactions
 Purchasers are expert buyers
 Organisational demand is
derived demand
 Relatively price inelastic
 Demand fluctuates

37. Business v/s Consumer Market
CHARACTERISTIC BUSINESS MARKET CONSUMER MARKET
DEMAND ORGANISATIONAL INDIVIDUAL
VOLUME LARGER SMALLER
NO. OF CUSTOMERS FEWER MANY
LOCATION CONCENTRATED DISPERSED
DISTRIBUTION MORE DIRECT MORE INDIRECT
NATURE OF BUYER MORE PROFESSIONAL MORE PERSONAL
BUYERS INFLUENCE MULTIPLE SINGLE
NEGOTIATIONS MORE COMPLEX SIMPLER
RECIPROCITY YES NO
LEASING GREATER LESSER
PROMOTION PERSONAL SELLING ADVERTISING

38. Demand in Business Markets
DEMAND
IS…
DESCRIPTION
DERIVED Demand for business products
results from demand for
consumer products.
INELASTIC A change in price will not
significantly affect the demand
for product
JOINT Multiple items are used
together in final product.
Demand for one item affects
all.
FLUCTUATIN
G
Demand for business products
is more volatile than for

39. Business Buying Behaviour
ASPECTS
OF
BUSINESS
BUYING
BEHAVIOU
R.
BUYING CENTERS
CONSUMER
SERVICE
EVALUATION
CRITERIA
BUYING SITUATIONS
PURCHASING
POLICY

40. A Model of Business Buying Behaviour
THE ENVIRONMENT
THE BUYING ORGANISATION
THE BUYING CENTER
BUYING
DECISION
PROCESS
BUYER’S RESPONSE

41. Buying Center
All those persons in an
organisations who become
involved in the purchase
decision.

42. Roles in the Buying Center
INITIATOR
GATEKEEPE
RS
INFLUENCE
RS
DECIDER
USERS
PURCHAS
ER
BUYING
CENTER
S

43. Evaluative Criteria for Business Buyers
PRICE
SERVICE
QUALITY

44. Buying Situation
NEW BUY A situation requiring the
purchase of a product for the
first time
MODIFIED REBUY A situation where the
purchaser wants some change
in the original good or service
STRAIGHT REBUY A situation in which the
purchaser reorders the same
goods or services without
looking for new information or
investigating other suppliers.

45. BUSINESS BUYING SITUATIONS
NEW TASK BUYING
MODIFIED REBUY
STRAIGHT REBUY
Involveddecisionmaking

46. Purchasing- Procurement
Process
PROBLEM RECOGNITION
GENERAL NEED DESCRIPTION
PRODUCT SPECIFICATION
SUPPLIER SEARCH
PROPOSAL SOLICITATION
SUPPLIER SELECTION
ORDER ROUTINE SPECIFICATION
PERFORMANCE REVIEW
POST PURCHASE
PURCHASE
INFO SEARCH
& EVALUATION
NEED
RECOGNITION

47. Comparison of Business & Consumer Buying Situations
Buying Step Industrial Consumer
Need to problem
recognition
Anticipates Reacts
General need
description
Extensive Limited
Product specification Precise/ technical Benefits
Information/supplier
search
Extensive Limited
Proposal solicitation Formal Verbal
Supplier selection Extensive Limited analysis
Order-routine
specification
Calculated re-order Not routinised
Post-purchase Extensive Little comparison

48. ENVIRONMENTAL
•Level of demand
•Economic outlook
•Interest rate
•Rate of
technological
change
•Political and
regulatory
developments
•Competitive
developments
•Social responsibility
concerns
ORGANISATIONA
L
•Objectives
•Policies
•Procedures
•Organisational
structure
•Systems
INTERPERSON
AL
•Interests
•Authority
•Status
•Empathy
•Persuasiveness
Major Influence on Industrial Buying Behaviour
INDIVIDUAL
•Age
•Income
•Education
•Job position
•Personality
•Risk
•Attitudes
•Culture
Busine
ss
Buyer

49. That’s all folks!