CONSUMER AND ORGANIZATIONAL BEHAVIOR

4.1. CONSUMER BEHAVIOR: ITS IMPORTANCE IN MARKETING STRATEGY

The study of consumer behavior stems from the current concept of marketing that focuses

on consumer needs. It is difficult to effectively satisfy the needs of current and potential customers

without prior knowledge of the goods and services they desire and the activities they perform to

acquire them. Therefore, the task of marketing is to understand, explain and predict actions

related to consumption.

Consumer behavior refers to the set of activities carried out by a person or organization

from the moment they have a need until the moment they make the purchase and subsequently

use the product. The study of such behavior also includes the analysis of all the factors that

influence the actions performed. The activities of seeking, purchasing, using and disposing of

goods to satisfy needs and desires involve mental and emotional processes as well as physical

actions.

The study of end consumer behavior includes the following aspects:

2 The purchasing or acquisition behavior. It covers all activities carried out to obtain a

good or service, including payment for it.

2 The final use or consumption behavior of the goods and services acquired by oneself or

by third parties.

2 The internal and external factors to the individual that influence the purchasing process

and the use or consumption of the acquired product.

Accepting that the consumer is the center of all marketing activity, there is no doubt about

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the importance of understanding how the consumer is motivated, how he or she buys and how he

or she uses the products purchased. It is about answering the following questions: What do you

buy?, Why do you buy it?, How do you buy it?, Where do you buy it?, How much do you buy?,

How often?, How do you use it?, etc. This knowledge will allow:

- More effectively identify current and future needs.

- Improve communication skills with customers.

- Gain their trust and ensure their loyalty.

- Plan commercial action more effectively.

Knowledge of consumer needs, the decision-making process and the factors that

determine it benefits both parties in the exchange relationship:

2 Benefits for the consumer.

It facilitates, guides and makes the purchase and consumption of products more

satisfactory. If products are tailored to their needs and prices are what they are willing to pay,

consumers will feel more satisfied. If the purchasing decision process and the factors that

influence it are also known, products can be distributed and promoted in such a way that the

decision is easier and more pleasant for the buyer.

2 Benefits for the company.

Developing a commercial strategy that is more tailored to the consumer will increase

demand for the products offered, increasing market share and company profits.

Knowledge of the needs of the consumer or user is the starting point for designing the

commercial strategy. Once the needs have been determined, the extent to which they exist in the

different market segments to be served must be identified. Products must then be positioned to

meet those needs and marketing strategies developed that communicate and deliver the product

benefits.

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4.2. THE STUDY OF CONSUMER BEHAVIOR: APPROACHES

The study of consumer behavior is not easy due to the peculiarities it presents. The

activities that people carry out and the processes they put in place when they act as consumers

are a simple manifestation of their behavior as human beings. This behavior is essentially

complex, since it is influenced by a large number of factors, both internal and external, and about

which there is little and fragmentary knowledge.

- Complex. There are many internal and external variables that influence behavior.

Furthermore, the market response to stimuli tends to be non-linear, to have “threshold” effects

(minimum levels of stimulus needed to produce a response) and to diminish over time if no new

stimuli are introduced.

- It changes with the product life cycle. As the product becomes established in the

market, throughout its life cycle, and reaches maturity, consumers carry out a learning process

and acquire greater experience regarding the characteristics and benefits of the product.

- Varies depending on the type of products. Not all products are of equal interest to

consumers, nor do all purchases pose the same risk. If the purchase is important to the consumer

(even if the price is not high) or the associated risk is high, due to the consequences of a wrong

purchase, it will be a high-involvement purchase; otherwise, it will be a low-involvement purchase

and may be carried out by inertia.

APPROACHES TO CONSUMER BEHAVIOR

ECONOMIC APPROACH OR ECONOMIC THEORY APPROACH

The focal point of this theory is the concept of the “economic man,” who directs his

behavior toward maximizing his utility by making a rational calculation of the consequences of his

purchasing behavior. It assumes that individual consumer behavior always involves a choice, and

that consumers act primarily for economic reasons. It is based on the hypothesis that the

individual has complete knowledge of his desires and is capable of acting rationally to satisfy his

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needs, his only motivation being the maximization of utility. This approach does not take into

account the structure of the decision-making process.

This approach is based on three considerations: 1) the resources available to any

economic agent are limited; 2) their needs are unlimited; and 3) there are numerous offers on the

market capable of satisfying their needs and desires.

PSYCHOSOCIOLOGICAL APPROACH

It primarily considers the human being as a social animal adapted to the general norms

and forms of its culture, to the more specific patterns of the subcultures and groups to which life is

subject. Their desires and behavior are largely shaped by their current group affiliations and their

influence. Therefore, it broadens the field of variables that influence behavior, considering not

only economic variables but also psychological (internal) and social (external) variables.

Psychological variables reflect a person's internal characteristics, needs and desires; external

variables specify the influence exerted by the environment.

MOTIVATIONAL APPROACH

It tries to explain behaviors based on the causes or reasons that produce them. Human

beings act motivated by needs. These can be defined as feelings of lack of something, which

predispose one to act in such a way that they can be alleviated. Thus, motivation is considered to

be the driving force that pushes people to action, and this driving force is caused by a state of

tension due to an unsatisfied need.

- Maslow: He established a hierarchy of needs (physiological –breathing, hunger, thirst,

shelter, etc.-, security –physical security, stability, routine, etc.-, social –love, affection, belonging

and acceptance in a group, etc.-, esteem –prestige, reputation, recognition by others, etc.- and

self-actualization –people's desire to satisfy their potential, to become all they can be) that has

had a high degree of acceptance to explain human behavior. This author states that every human

being has five basic levels of needs, which range from low-level or biogenic needs to high-level or

psychogenic needs, and that every person will try to satisfy the lowest-level needs before

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considering the higher-level needs.

A relevant idea is to consider that the human organism is dominated by unsatisfied needs;

a satisfied need ceases to be a need and loses importance in the dynamics of the human being.

Those needs that are permanently gratified cease to exist as active determinants of human

behavior.

- Freud: builds a psychoanalytic theory on the formation of the human psyche and from it

he will explain people's behavior. According to Freud, an individual's personality is formed

throughout his or her life, from infancy to adulthood, and this personality develops in three large

areas or levels: the id or id (subconscious), where the most powerful impulses and motivations

that the person cannot access are generated; the ego (conscious), where the individual's actions

are generated to respond to the impulses and motives of the subconscious, and the superego,

which tries to direct the impulses towards socially accepted behaviors. According to Freud, the

superposition of these three areas of personality explains human behavior, which is essentially

complex and where motivations remain in most cases hidden or ignored, even by the individuals

themselves.

In its application to the explanation of consumer behavior, Freud's model makes it possible

to demonstrate that buyers are not only influenced by economic variables, but also by the

symbolic aspects of the product. In this way, the importance of product design and the symbols

associated with it in influencing consumer behavior can be explained.

In general, it must be taken into account that human behavior is very complex and should

not be treated from a partial perspective but rather requires an integrative approach (internal

factors, external factors, decision-making process and consumer response). Motivational

research aims to discover the real motivations behind human actions, knowing that human beings

are often not fully aware of the reasons that drive our conduct, our purchasing behaviors.

4.3. FACTORS AFFECTING CONSUMER BEHAVIOR

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 4.3.1. EXTERNAL FACTORS

They are the macro and microenvironment variables that influence consumer behavior.

Among the former, we can highlight the economic, political, legal, cultural, technological and

environmental environment; among the latter, social class, social groups, family, personal

influences and purchasing or consumption situations.

CULTURE AND SUBCULTURES

Culture is the set of norms, beliefs and customs that are learned by society and lead to

common patterns of behavior. While the biological characteristics of a human being are innate,

culture is learned. The process of learning culture takes three distinct forms: formal learning,

whereby adults in a family teach the youngest member how to behave; informal learning, whereby

the child learns by imitating the behavior of other people; and technical learning, which is received

through training centers. However, culture is not monolithic, but changes over time.

Every culture includes subcultures, or smaller, more identifiable groups that share the

same values. The delimitation can be due to geographical, religious or ethnic factors. Members of

a specific subculture tend to have beliefs, values, and customs that are distinct from other

members of a society.

Culture is one of the great determinants of human behavior, since it underlies human

decision-making, behavior, and conditions the way of life of any society. For example, there are

differences between Spaniards, English, Germans, Chileans and North Americans in hygiene

habits, breakfast, the way of getting to work, working, understanding food, etc.

Values are very significant elements for understanding the culture of a society. Consumers

will act in their behaviors and conduct in such a way that they can achieve certain values socially

established as correct. In Spain, some predominant values can be pointed out. Among them,

materialism, it seems that there has been a certain forgetfulness of the spirituality that was

dominant in some past era and since the end of the sixties a consumer, materialistic society has

begun to develop, which has led the Spanish to worry significantly about their material

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possessions. Companies are aware of this value and try to focus their actions with little spirituality

and a high emphasis on everyday life and present enjoyment. Other significant values are

competitiveness and envy, which lead us, in terms of consumption, to focus a good part of our

purchases comparatively with those of our neighbors or those close to us. Dedication to work and

industriousness appear in the group of values, although not as predominantly as in North

American society. In parallel, Spanish society is hedonistic, it seeks pleasure, and this objective is

attempted to be achieved through the consumption of numerous products that produce pleasant

and enjoyable sensations. Freedom is another value to take into account that, for example,

connects with the attraction to nature and the natural. Patriotism, profit motive and selfishness

often appear in studies related to the identification of values in Spanish society. Probably other

values present in other societies such as equality, individualism, progress or moral orientation are

far removed from our reality. Finally, a certain humanism or social interaction also seems to be

present, more evident in some regions than in others.

This set of values creates a profile of the Spanish consumer of the 21st century, whose

fundamental features will be:

- The consumer of the 21st century will be basically functional, fond of the

environment

environment, basically conservative and, at the same time, technological and

computerized.

- Training will maintain its appeal as a result of the need to

maintain competitiveness in the workplace, train in the knowledge of new technologies

and the need for self-realization.

- Greater education will produce cosmopolitan consumers, inclined to design,

variation, independent and innovative.

- The consumer of the future will look for goods and services that simplify their

lives and

basically save time.

- The search for comfort will lead to considering the home as the main center

of leisure and consumption.

- Telecommunications will change consumption and produce new lifestyle habits

and consumption. Mobile telephony, telemarketing, teleworking and cyber-selling will

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 encourage changes in purchasing habits and will even allow us to talk about

automated stores.

SOCIAL CLASS

Social stratification is the process by which a given society is divided into strata, each of

which entails a different degree of prestige, property, and power.

Members of the same social class share certain values and attitudes because they have

similar socioeconomic characteristics; however, they are not formally grouped nor do they meet or

communicate as such a group.

There is no doubt that industrial societies have generated notable changes in the situation

of inequality in the present century for reasons of various economic, social and political nature.

Some of the factors that have driven the trend towards a reduction in inequality may be the

interventionism of governments in certain areas, changes and transformations in the labour

structure, the evolution and modifications of market economies, the acceleration in the change

and incorporation of new technologies, the improvement of economic situations, the development

of social protection systems or the greater mobility of the population. However, social strata

continue to exist, and therefore, groups of people who occupy equal positions in society and who

manifest similar attitudes, criteria, characteristics or lifestyles.

The most relevant factors when determining the existence of social classes are:

^ Income level. It translates into a certain purchasing power. The correlation between

income and status has traditionally been quite high, but has gradually become less

consistent.

^ Occupation. The work developed defines some specific manifestations of consumption.

Professions, depending on their importance, are usually linked to differential economic

advantages and a corresponding and proportionate social prestige.

^ Prestige. In line with the previous point, we can affirm that the prestige or esteem that
an individual enjoys in society is fundamentally due to the functions that they perform in

it and to which the rest of the community in question attributes greater or lesser

relevance.

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 ^ Training is a fundamental value of the most developed societies. People aspire to reach
an educational level that allows them to advance in society.

^ Economic and political power. Heritage is a symbol of being a member of a stratum. Its

importance lies in the number of properties that an individual has and how he chooses

and uses them, which will determine a lifestyle that can be very important for the

analysis of consumer behavior.

^ Class consciousness. Generally, the smaller these groupings are, the greater the group

consciousness exists; for example, in the strata that we could describe as high, there

is usually a high level of stratum identification or a clear class consciousness.

The aspects that are most influenced by belonging to a stratum are learning; personality

(some personal characteristics) – for example, children from higher social classes are self-

assured, more self-confident, have a more complete knowledge of the language and even more

spontaneity than children from lower strata; evaluation criteria in the same product category;

attitudes; and consumption – they buy and consume different quantities of products, and products

of equally different qualities, the place of purchase is different, they have different demands for

information, different ways of using leisure time and different uses of business communication.

SOCIAL GROUPS

Social groups are reference groups with which the individual identifies and which influence

the formation of their beliefs, attitudes and behaviors. A distinction can be made between groups

of which one is a member and groups to which one aspires to belong.

Groups of which one is a member

Primary. The relationship with them is frequent

Secondary. Sporadic relationship.

Groups to which one aspires to belong

They are classified according to whether or not direct contact is maintained with them. In

the first case, the individual considers it possible to become integrated into such groups

(subordinates and managers). In the second case, although one wishes to belong to the admired

groups, the hope of aspiring to them is more remote because there is no direct relationship with

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them but one identifies with their members and accepts their beliefs (fans of a character or artist).

DEGREE OF INTENSITY OF THE DEGREE OF STRUCTURING

BELONGING RELATIONSHIP
INFORMAL FORMAL
Belonging groups Primary Working groups
Family Friends
Gatherings
Secondary Sports clubs
Recreational clubs Political parties
Trade unions
Scientific associations
Aspiration groups They are those to which one aspires to belong.
Dissociation groups They are those to whom one does not wish to belong.

Social groups exert different types of influence: informative (members of a group

exchange information, share data, etc.), comparative (they provide the individual with criteria for

evaluating his or her own image) and normative (they urge compliance with group norms).

The products most influenced by reference groups are cars, tobacco, beer and medicines.

There are different factors that favor the influence of the reference group, some of these factors

concern products and brands, and others concern the characteristics of consumers:

- The visibility of consumption is a factor that reinforces the influence of

consumer groups.

reference, especially in luxury products, the consumption of which can be

observed by others (golf clubs, sailing, etc.).

- The importance of perceived risk in the purchase also tends to reinforce the

influence of the reference group. For example, when purchasing product

categories such as cars, motorcycles, etc.

- Individual consumer characteristics can reinforce or inhibit the influence

of the reference groups. Thus, when social approval is sought through

consumption, the action of reference groups is reinforced; while the

strengthening of self-confidence inhibits this influence.

Some members of groups have greater influence than others, due to greater knowledge,

privileged status, or any other reason. These individuals become opinion leaders and their

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influence on consumer behaviour is reinforced by the credibility granted to them in the information

they transmit.

FAMILY

It is a primary social group whose influence on the personality, attitudes and motivations of

the individual is very strong. The family is the basic group that provides a person, from childhood,

with learning about the products they should purchase and about consumer behavior patterns. In

the family it is possible to distinguish 6 different roles or roles: the initiator (sends the idea of

buying the product), the informant (who obtains the information about the product considered), the

influencer (tries to influence the purchase decision), the decider (makes the purchase decision),

the buyer (acquires the product) and the consumer or user (consumes the product). Family

members exchange these roles depending on the type of product, and one member may assume

more than one role at the same time.

An aspect of great interest is the study of the influence that each member of the couple has

on purchasing decisions. Thus, there are products whose purchase is decided unilaterally by the

husband or the wife, while for others it is decided predominantly by the husband (car, home

insurance, life insurance, etc.) or the wife (furniture, upholstery, tableware, children's clothing,

etc.) and, in others, the purchase is decided jointly (vacations, movies, etc.). Joint purchases are

more likely when:

- The purchase decision is important or the perceived level of risk is high (house,

vacation,...)

- There is enough time.

- The family is middle class.

- The family is young.

- The family has no children. If there are, there tends to be a delegation of the

purchase.

- The woman does not work. If she does, she has less time to consult her husband and

becomes more independent.

It is also important to note that family needs and purchasing behavior change over time.

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Based on this idea, sociologists studying the family have used the concept of family life cycle to

classify family units into meaningful groups from the point of view of their purchasing behavior.

The family life cycle is defined as a progression of stages through which most families pass,

beginning from singlehood to marriage (and the creation of the basic family unit), through the

growth phase (with the birth of children), to contraction (as children leave home), and ending with

the dissolution of the basic family unit (due to the death of a spouse).

The family life cycle is a composite variable created by combining demographic variables

such as marital status, family size, age of members, and employment status of the head of

household; the age of parents and relative income level are inferred from the stage of the family

life cycle. Many models have been constructed on the family life cycle and most of them differ in

the number of stages considered. This analysis is relevant to the extent that it allows the market

to be segmented and segments to be identified that are made up of families with relatively

homogeneous characteristics, whose needs and purchasing behaviors are similar.

PHASE OF THE FAMILY LIFE CHARACTERISTICS SHOPPING

CYCLE
Stage of being single Low financial burdens Leisure-
(young, single people who do not oriented Basic furniture
Cars
live at home with their parents) Vacation
Newlywed couples (young people Good financial position High
without children) purchase rate Cars Refrigerators
Durable Furniture
Holidays

Full Nest I Unsatisfactory financial position

(with children under 6 years old) Low liquidity Baby Food Toys
Full nest II Acceptable financial position Wife
(children over 6 years old) usually works Food
Cleaning supplies
Bicycles
Full nest III Good financial position Wife works
(older couples with dependent Durable goods
Quality furniture
children) Cars
Empty nest I Very satisfactory financial position
(older couples without children at Vacation
Luxury goods
home) Home improvements
Drastic decrease in income House
Medical attention
Empty Nest II (Retired Husband) ownership Pharmaceutical products
Survivor Good income Medical attention
(lonely person who works) You can sell your house Pharmaceutical products

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Survivor Low income Medical attention
(retired lonely person) Need for attention and affection Pharmaceutical products

PERSONAL INFLUENCES

Personal influence is very powerful because it is more credible than other sources of

information. What a friend or trusted person says will prevail over information obtained from mass

media. Hence the importance of a satisfied customer.

SITUATIONAL DETERMINANTS

The product or service purchased may depend on how, when, where and why it is going

to be used or consumed. The benefits of a product may be perceived differently depending on the

situations in which it may be used, but the greater the brand loyalty, the less influence situational

factors will have.

A distinction can be made between purchasing situations and usage situations:

Purchasing situations. The type of product purchased, the brand, size, packaging, etc., or

the place where the product is purchased may vary depending on whether the product is

purchased for oneself or as a gift to a third party, whether it is a normal purchase or in the event

of a special offer or sale.

Consumption situations. Purchasing behavior may also vary depending on the intended

use of the product or the people who will consume it. Thus, the product purchased may be

different depending on whether it is for family or guests, for home consumption or for travel, for

personal use or for several people. You can also change your behavior depending on when you

are going to consume it: day or night, in summer or winter, at lunch or dinner, etc.

4.3.2. INTERNAL FACTORS

THE MOTIVATION

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 The purchasing decision process begins with the recognition of a need, and motivation is

required for it to be recognized and evaluated. The ultimate cause of all conduct or behavior of a

person is motivation, which is the driving force that pushes him or her to action. Motivation directly

affects the specific criteria for evaluating a need.

Motivation can be defined as a general predisposition that directs behavior toward

obtaining what is desired. Needs and goals are constantly evolving and changing to respond to

physical changes in the individual, the acquisition of new experiences, changes in the

environment or interactions with other people; thus, as an individual achieves his or her goals, he

or she sets new ones. For practical purposes they can be considered equivalent to needs and

desires. They can be classified:

2 Physiological or psychological.

1st.- They satisfy biological or bodily needs and are innate to the person (hunger or thirst).

2nd.- They focus on the satisfaction of emotional needs, such as knowledge, friendship,

etc., which are those that we learn or feel as a consequence of our culture and response to our

environment.

Both needs can be satisfied simultaneously, as when sharing a meal with friends.

2 Primary or secondary.

1st.- They direct purchasing behavior towards generic products such as a television, a car,

a meal, etc. (physiological needs are considered primary motivations to the extent that they are

necessary for the preservation of human life).

2nd.- They complement the previous ones and guide the choice between brands and

models of generic products or between establishments in which they are sold (in this sense,

psychological needs are considered as secondary needs or motivations).

Thus, the primary need to eat will be complemented by the choice of the type of food and

the place where it will be eaten.

2 Rational or emotional.

1st.- They are associated with observable or objective characteristics of the product, such

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as size, consumption, duration, price, in such a way that, after analyzing the alternatives, the

consumer chooses the one that maximizes their utility.

2nd.- They are related to subjective sensations such as comfort, pleasure or prestige.

Both types of motives are involved in most purchasing decisions to a greater or lesser

extent, and therefore it could be said that this distinction does not seem very justified. Thus, the

purchase of a car is decided by objective criteria (price, power, speed, consumption, etc.) and

subjective criteria (comfort, distinction, modernity, etc.).

2 Conscious or unconscious.

1st.- The consumer perceives that they influence their purchasing decision and has clearly

identified them.

2nd.- They influence the decision without the consumer realizing it.

The buyer may not be aware of some reasons because he does not want to face the real

reason for his purchase. Thus, the buyer of a Mercedes or BMW car may not admit that he really

bought it for reasons of prestige and claim that he did so because he wants a powerful and fast

car.

In other cases, you may not really be aware of the real reasons for the purchase. Thus, it

may not be possible to explain why certain colors are preferred over others.

2 Positive or negative.

1st.- They lead the consumer to achieve the desired objectives.

2nd.- They keep him away from unwanted consequences.

Positive motives predominate in purchasing decisions, but in some cases, negative motives

are more influential. An example of a negative force is fear, which plays a decisive role in the

purchase of insurance to prevent fire, theft, damage or loss of one's own life. Another example

would be the case of a consumer who may be attracted to a sports car, but rejects a motorcycle

because it is considered dangerous.

PERCEPTION

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 It refers to the personal way of interpreting and giving meaning to the stimuli to which one

is exposed. A person's reality is only the perception that he or she has of his or her immediate

environment; people act and react based on their perceptions of reality and not on an "objective"

reality, hence the importance of the perception process in consumer behavior.

Perception is a process of selecting, organizing and integrating sensory stimuli into a

meaningful and coherent image. In this process 4 stages can be distinguished:

1 .- Exposure to information.

2 .- The attention paid.

3 .- The understanding or interpretation of the message.

4 .- The retention of information in memory.

But not all information coming from the environment is perceived by the individual. Of the

large amount of data and stimuli that a person simultaneously receives from their environment,

they will only pay attention to a few and reject the rest. For this reason, it is said that perception is

selective, that is, what interests us is perceived. The same product can be perceived differently by

different consumers depending on the attributes and characteristics that are of greatest interest to

them. For some consumers, the most important thing will be the technical characteristics, for

others the economic, aesthetic aspects or the brand image.

Selectivity in the perception process manifests itself in each of the four stages of the

process. People expose themselves to the media of their choice. Greater attention is paid to

information that is consistent with one's own beliefs and opinions and there is a tendency to avoid

information that is contradictory to them. Information is interpreted differently depending on beliefs

and attitudes, and that which best fits these is retained in memory to a greater extent.

Humans may not distinguish differences between stimuli when they are not apparent. Small

changes in price or size of the product or packaging may go unnoticed by consumers. There is a

threshold in the perception of differences in stimuli. Weber's law states that a certain level of

variation in the stimulus is necessary for it to be perceived and that this variation is proportional to

the initial amount of the stimulus. That is, if a 10% variation in the price of a product is required to

be perceived, the variation must maintain this proportion when the initial price is different. Thus, if

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the initial price is 30 euro cents and the variation to be received has to be 3 cents, when the initial

price is 30 euros, a variation of 3 euros will be required.

In short, it is of great importance for marketing managers to know and understand the

consumer perception process, since all the information that the company transmits to them is

filtered and interpreted through this process. The brand image, the product positioning, the

company image are the result of the way in which the potential consumer perceives and interprets

the information and stimuli that the company sends them. Thus, to effectively reach and influence

consumers, marketers must understand the effects that perceptions have on their purchasing

decisions.

EXPERIENCE AND LEARNING

Experience is gained through learning. Learning is a process while experience is a result or

situation. New knowledge and acquired experiences continually provide feedback to the

individual, who will guide his future behavior taking into account the new experiences.

Learning can lead to habit and brand loyalty. As purchases are repeated and the

experience is satisfactory, the time spent searching for and evaluating information is reduced.

Furthermore, as learning theories hold, behavior that is reinforced is more likely to occur again.

Thus, choosing a newspaper for the first time or changing from one to another can be a complex

decision, but if the experience is satisfactory, it is likely that the choice will be repeated and its

purchase will become a habit.

DEMOGRAPHIC, SOCIOECONOMIC AND PSYCHOGRAPHIC CHARACTERISTICS OF

THE BUYER

They are objective characteristics of the buyer and generally easy to measure. They all

influence the different phases of the purchasing decision process, as well as other internal

variables.

Demographic variables.

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 Age, sex, marital status, family position (head of household, housewife, other member),

number of family members, habitat (urban or rural)

Socioeconomic variables.

Occupation, profession or activity performed, regular income obtained, accumulated

assets, level of education.

Psychographic variables.

They are subjective and more difficult to measure, like personality and lifestyles (activities,

interests and opinions).

ATTITUDES

They are learned predispositions to respond consistently favorably or unfavorably to an

object or class of objects. They are made up of three components: the knowledge that the person

has about the object and the beliefs (cognitive component), the evaluation, that is, the emotions

or feelings of a person regarding the object - favorable or unfavorable evaluation - (affective

component) and the tendency to act (active component). Some characteristics of the attitude are:

1. Attitudes are not innate, but are learned. From a marketing perspective, this

means that attitudes relevant to consumer behavior are formed or acquired

through direct experience with products or through information obtained from other

people, the sales force, or the media. In conclusion, if attitudes are learned,

marketing actions can influence the formation of attitudes or their change.

2. Attitude is related to behavior, since it implies a “predisposition to respond.”

3. The attitude is relatively consistent with the behavior it reflects. Consistency does

not mean permanence, since attitudes change; consistency must be understood in

relation to behavior, that is, if the person has freedom of action, we can anticipate

that their behavior will be consistent with their attitudes.

4. The attitude is directed towards an object (product, brand, service, company,

person or idea).

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 The study of consumer attitudes is of particular importance in marketing, since through

knowledge of them it is hoped to be able to induce consumer purchasing behavior and, therefore,

make a forecast of the demand for the product or brand considered. However, it is necessary to

recognize that the identification of an attitude does not imply an exact prediction of behavior,

since the relationship between attitude and behavior is difficult to establish in a satisfactory way.

5. 4. THE PURCHASE DECISION PROCESS

The decision-making process for purchasing a product or service, in general, is made up of

a series of sequential stages whose importance, intensity and duration depend on the type of

purchase made.

For major consumer purchases, such as buying a home or a car, the decision-making

process will be long and complex. On the other hand, the less important the purchase (the risk of

making a mistake is lower), the greater the previous experience in using the product and the

greater the knowledge of the different existing brands, the simpler and quicker it will be.

In general, in complex decision-making processes, 5 phases can be identified; the entire

process is influenced by internal variables of the individual (motivation, perception, experience,

personal characteristics and attitudes) and by external variables (economic environment, cultures,

reference groups, family, personal influences and situational determinants) in addition to the

variables inherent to marketing (price, product, promotion and distribution).

The stages of the purchasing decision process will occur sequentially in a complex

decision. However, in repeat, habitual or inertial purchases, the process will be simpler,

simplifying or eliminating some stages. Even the sequence of the process can be reversed, as

occurs in impulse purchases, made emotionally, in which the purchase decision is made first and

then the need is justified.

PHASES

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 ^ Recognition of the problem.

The starting point of the decision-making process is the recognition of the problem or need

that must be satisfied. In this sense, it is necessary to distinguish between when the need is

evidenced by an internal motivation, such as hunger, and when the problem or need is revealed

by an external stimulus, such as a television advertisement. In any case, the consumer will then

initiate a behavior tending to obtain those goods or objects that allow him to satisfy the identified

need or reach the desired state. At this stage, motivation and environmental factors are especially

influential. The action of marketing will be to direct the needs towards the specific demand of the

products offered.

^ Information search.

It will be more or less intense depending on the complexity of the purchase and the buyer's

previous experience; which is also detailed in the advertising, which will have more or less

informative content. First, the consumer will use internal information accumulated from previous

experiences and only in some cases will he resort to external sources of information. The intensity

of the information search and the amount of information required will also depend on the type of

purchase and the risk perceived by the buyer.

^ Evaluation or analysis of alternatives.

After collecting the information, the consumer identifies a certain number of products or

brands from which to choose. It is the phase in which the attributes of the different candidate

products are perceived and preferences are formed.

^ Decision to buy or not.

At this stage of the process the buyer must finally make a decision: buy one of the

evaluated alternatives, look for an additional alternative or postpone the purchase. It should be

noted that the buyer does not face a single decision when deciding to buy a product, but generally

makes a series of decisions relating to the different dimensions of the purchase: the decision on

the brand, the place of purchase, the quantity to buy, the time of purchase and the conditions or

method of payment.

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 The decision not to buy may be definitive or temporary, until more information is gathered

or a more opportune moment arises (for example, you want to buy but do not have enough

money or credit).

ª Feelings or sensations after the purchase.

Satisfaction: will encourage repeat purchases and can lead to brand loyalty.

Dissatisfaction: will lead to a change of brand.

At this stage, the buyer may experience dissonance, that is, doubts about whether a good

decision was made. To narrow it down, you can try looking for testimonials or evidence that

reinforces the wisdom of your purchase (for example, a friend or a famous person who also

purchased the product or service).

The experience gained through the use or consumption of the product will feed back into

the purchasing decision process should it occur again. This information will be stored and can be

used in a new purchasing decision process.

6. 5. CHARACTERISTICS OF THE PURCHASING BEHAVIOR OF

ORGANIZATIONS

Organizational buying is the decision-making process by which formal organizations

establish the need for purchased products and services and identify, evaluate, and select among

alternative brands and suppliers.

The main similarities between the purchasing behavior of organizations and the purchasing

behavior of end consumers are: the normal result is a purchase and the decision is the result of a

process. However, both behaviors also present multiple differences, among which the following

stand out:

- The demand of the organizations is derived

- Demand is subject to greater fluctuations (a small variation in the

final demand can have a large effect on the demand for industrial products)

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 - Demand is usually more inelastic (price variations in products

industrial ones usually have little impact on demand volume)

- Demand is more concentrated

- Purchases are of greater volume

- The purchasing decision does not fall on a single person but on the purchasing

center

(all individuals who participate in the purchasing decision-making process and

who share common objectives and the risks that may arise from the decisions:

initiators, users, influencers, deciders, approvers and buyers)

- The purchasing process is longer, more complex and more time-consuming

- The purchase evaluation criteria are different and less subjective

7. 6. PURCHASE SITUATIONS, THE PURCHASE PROCESS AND

MARKETING IMPLICATIONS

5.6.1. PURCHASE SITUATIONS

The purchasing behavior of organizations is largely determined by the type of purchasing

situation they face on each occasion. The number and complexity of decisions varies significantly

depending on whether it is a routine purchase with accumulated experience, or the acquisition of

a product or service that is being considered for the first time.

Direct buyback

It is a routine purchasing situation, where the buyer requests an order again from the usual

suppliers maintaining the same conditions as previous orders. In this type of situation, the degree

of uncertainty is minimal, the requirements for new information are minimal and decisions are

made automatically based on criteria that have been tested over time.

Modified Buyback

Organizational buyers may consider changing purchasing conditions when they believe

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that doing so will provide them with certain benefits, such as cost reduction, improvements in

service quality, etc. In this type of situation, the buyer may be interested in changing product

specifications, delivery conditions, payment methods, or even replacing suppliers.

New Purchase

This type of situation arises when an organization considers, for the first time, purchasing a

product or service. In this case, decisions will have to be made regarding product specifications,

delivery terms and deadlines, payment methods, service quality, supplier search and selection,

etc. The greater the importance of the purchase or the perceived risk involved, the greater the

number of people involved in the decision-making process, who will also have to establish, for the

first time, the criteria that guide decisions on the issues raised. Furthermore, since this is a new

situation with no prior experience, the uncertainty surrounding decision-making is high and,

therefore, the need for information is also high, both in terms of quantity and quality.

5.6.2. THE PURCHASE PROCESS

When buyers of an organization are faced with a direct or modified purchase situation, it is

not necessary for them to go through the eight phases of the purchase process; however, when

faced with a new purchase situation, they must go through the eight stages of the process that we

will describe below:

1. Recognition of the problem (for example, due to internal factors such as the launch of a

new product or a machine breakdown or due to external factors such as customer

requirements).

2. Determining solutions (what are the required applications?, what type of goods or

services should be considered?, what quantities are needed?).

3. Product specification.

4. Supplier search.

5. Request for proposals.

6. Evaluation of proposals and selection of suppliers (technical competence, on-time

delivery and quality service).

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 7. Ordering procedure.

8. Purchase evaluation.

5.6.3. THE MARKETING IMPLICATIONS

Once the organizational buyer behavior model is known and understood, it is possible to

design the most appropriate marketing strategies for each situation.

Marketing managers of a company trying to sell its products or services in an

organizational market must identify the purchasing situation of their potential customers, as well

as the phase they are in in their decision-making process, in order to design the most appropriate

strategy in each case. In this sense, we must pay special attention to the first five phases of the

purchasing process, since they are the ones that have the greatest impact on the marketing

strategy.

Purchase situations

Stages of the decision- New purchase Modified Buyback Direct buyback

making process
Recognition of Anticipate the problem Suppliers usual:
the Using advertising and sales maintain quality/service Regular suppliers: maintain
problem
force to convince buyers of Suppliers potentials: close relationships with
our ability to solve their monitor the development of users and buyers Potential
problems trends suppliers: convince the
buyer to re-examine the
alternatives
Determining solutions Provide technical Same as phase 1
assistance and information Regular suppliers: maximize
the ability to solve problems
for the buyer
Product specification Provide information to Same as phase 2 Same as phase 1
purchasing decision makers
about he binomial
product/service
Search for suppliers Regular suppliers: maintain Same as phase 1
dependency Potential Regular suppliers: monitor
suppliers: demonstrate the evolution of the problem
ability to solve problems Potential suppliers:
demonstrate ability to solve
the problem
Analysis of proposals Grasp the Grasp the Make proposals on time
customer needs and make customer needs and make
proposals on time proposals on time

Phase 1. Problem recognition

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 The marketing opportunity in a new buying situation depends on recognizing the

prospect's problem early and providing the necessary information and assistance quickly.

Marketers must design a communication strategy to alert potential customers to potential

problems and inform them that products are available to solve such problems.

In a direct buy-back situation, the regular supplier must maintain close contact with the

product users and purchasing staff and guarantee them an adequate level of quality and service.

You should also keep a close eye on all factors that could lead to a modified repurchase situation.

Sellers attempting to acquire a customer who is being served by other suppliers must

develop information systems that enable them to quickly detect trends that may lead the customer

in question from a direct repurchase situation to a modified repurchase situation. When this

possibility of change is detected, the seller must immediately take action in order to convince the

potential client of the opportunity to reconsider the possible alternatives.

Phase 2. Determining solutions

The marketing opportunity at this stage of the process focuses on providing information,

technical assistance and suggesting possible alternatives, while the potential client is in the

process of narrowing down solutions to the detected problem. At this stage, whether it is a new

purchase or modified repurchase situation, marketing efforts should be directed toward gaining

acceptance of the seller's participation in the problem-solving process. In direct buy-back

situations, the regular supplier must maintain information flows to its customer, to prevent the

possibility of a modified buy-back situation arising.

Phase 3. Product specification

Marketers have a great opportunity at this stage to influence the determination of

specifications that favor their organizations' products or services.

In these first three phases of the decision-making process, it is very important to identify

the people within the potential clients' organizations who make the purchasing decisions. The

purpose of this identification is to concentrate marketing efforts on them.

Phase 4. Search for suppliers

In new purchase and modified repurchase situations, the sellers' efforts must be directed at

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demonstrating to potential clients their technical capacity, their good reputation, their speed of

service, their financial responsibility, in short, that their organization should be taken into account

as a potential supplier. In the direct repurchase situation, regular suppliers must focus their efforts

on maintaining service quality and information flows to prevent the situation from leading to a

modified repurchase.

Phase 5. Analysis of proposals

The marketing strategy in new purchase or modified repurchase situations should be

aimed at knowing the specific details of the potential customer's problems and providing technical

assistance to solve them. In new purchase situations, it is very important for the salesperson to

determine the relative importance of the specifications made by the customer (what is essential,

what is desirable, and what is accessory). Regular suppliers who are in a direct buyback situation

must make timely proposals that respond to the requirements and demands of their clients,

avoiding a situation of modified buyback.

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