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Lecture

ADMS 2200 Lecture Notes - E-Procurement, Extranet, Cognitive Dissonance


Department
Administrative Studies
Course Code
ADMS 2200
Professor
Li Lee

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Chapter 6 Understanding Consumer and Business Buyer Behaviour
CHAPTER 6
UNDERSTANDING CONSUMER AND BUSINESS BUYER BEHAVIOUR
PREVIEWING THE CONCEPTS – CHAPTER OBJECTIVES
1. understand the consumer market and the major factors that influence consumer buyer
behaviour
2. identify and discuss the stages in the buyer decision process
3. describe the adoption and diffusion process for new products
4. define the business market and identify the major factors that influence business buyer
behaviour
5. list and define the steps in the business buying decision process
JUST THE BASICS
CHAPTER OVERVIEW
In this chapter, we continue our marketing journey with a closer look at the most important
element of the marketplace—customers.
The aim of marketing is to affect how customers think about and behave toward the organization
and its market offerings.
But to affect the whats, whens, and hows of buying behaviour, marketers must first understand the
whys.
We look first at final consumer buying influences and processes and then at the buying behaviour
of business customers.
ANNOTATED CHAPTER NOTES/OUTLINE
INTRODUCTION
Apple: The keeper of all things cool.
Few brands engender such intense loyalty as that found in the hearts of core Apple buyers.
Apple’s obsession with understanding customers and deepening their Apple experience shows in
everything the company does.
Apple’s keen understanding of customers and their needs helped the brand to build a core
segment of enthusiastic disciples.
“To say Apple is hot just doesn’t do the company justice.” Apple is smoking.
CONSUMER MARKETS AND CONSUMER BUYER BEHAVIOUR

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Part 2 Understanding the Marketplace and Consumers
Consumer buyer behaviour refers to the buying behaviour of final consumers—individuals and
households who buy goods and services for personal consumption.
All of these consumers combine to make up the consumer market.
The North American consumer market consists of more than 333 million people who consume
more than $14 trillion worth of goods and services each year.
The world consumer market consists of more than 6.8 billion people.
What is Consumer Behaviour?
Consumers make many purchase decisions and some are more complex than others.
Most large companies research consumer buying decisions in great detail to answer questions
about:
what consumers buy
where they buy
how and how much they buy
when they buy
why they buy
Often, consumers themselves don’t know exactly what influences their purchases.
The central question for marketers is: Given all the characteristics (cultural, social, personal, and
psychological) affecting consumer behaviour, how do we best design our marketing efforts to
reach our consumers most effectively?
The study of consumer behaviour begins and ends with the individual.
Characteristics Affecting Consumer Behaviour
Consumer purchases are influenced strongly by cultural, social, personal, and psychological
characteristics, shown in Figure 6.2.
Cultural Factors
Culture is the most basic cause of a person’s wants and behaviour.
Marketers are always trying to spot cultural shifts.
Subcultures are groups of people with shared value systems based on common life experiences
and situations.
Canada is a regional country, so marketers may develop distinctive programs for the Atlantic
provinces, Quebec, Central Canada, the Prairies, and BC.
Canada had three founding nations: the English, French, and Aboriginal peoples. The unique

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Chapter 6 Understanding Consumer and Business Buyer Behaviour
history and language of each of these nations has driven many of the cultural differences that
result in different buying behaviours across Canada.
The most recent census results (2006) reported the following:
English (anglophones) accounted for approximately 57 percent of the population,
French (francophones) made up approximately 22 percent of the population,
Aboriginals represented 3.7 percent of the total population.
According to Statistics Canada, roughly one out of every five people in Canada could be a
member of a visible minority by 2017.
People with a Chinese background are the largest group among visible minorities in
Canada at 3.74 percent of Canada’s population (40 percent of this group residing in
Toronto and 31 percent are in Vancouver).
People of South Asian origin (currently 23 percent of visible minorities) may represent as
large a marketplace by 2017.
People who identified themselves as “black” in the 2006 census are Canada’s third largest
visible minority. While some members of this group trace their ancestry back to Africa,
many others have more recently emigrated from the Caribbean.
Though age is a demographic variable, some researchers also contend that different age cohorts
have distinct cultures.
As of July 2008, the median age in Canada was 39.4 years and higher than ever before
As the Canadian population ages, mature consumers are becoming a very attractive
market. By 2015, the entire baby boom generation, the largest and wealthiest demographic
cohort in the country for more than half a century, will have moved into the 50-plus age
bracket.
Social Classes are society’s relatively permanent and ordered divisions whose members share
similar values, interests, and behaviours.
Social class is not determined by a single factor, but is measured as a combination of occupation,
income, education, wealth, and other variables.
Social Factors
Groups and Social Networks. A person’s behaviour is influenced by many small groups.
Opinion leaders are people within a reference group who, because of special skills, knowledge,
personality, or other characteristics, exert social influence on others.
These 10 percent of consumers are called the influentials or leading adopters.
Marketers use buzz marketing to spread the word about their brands.
Online social networks are online spaces where people socialize or exchange information and
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