11.4 Buyer Behavior

Culture

Consumer decision-making is influenced by culture. Culture is the set of values, ideas, attitudes, and symbols created to shape human behavior. Culture is the part of customs and traditions of a group of people that is transformed into its art, food, costumes/clothing, architecture, and language, as well as other unique manifestations of a specific group of related individuals.

Culture by definition is social in nature. It is human interaction that creates values and prescribes acceptable behavior. Culture gives order to society by creating common expectations. Sometimes these expectations are codified into law; for example, if you come to a red light, you stop the car. In some cultures, a young person undergoes a special rite of passage from youth into adulthood (such as a bar mitzvah in Jewish culture or a quinceañera in Hispanic culture). As long as a value or belief meets the needs of society, it will remain part of the culture. If it is no longer functional, the value or belief fades away. For example, the value that very large families are ideal is no longer held by a majority of people in the U.S. whose daily lives are less dependent on a large household for survival. The impact of culture on consumer decision-making can be found, for instance, in food tastes and traditions, gift-giving practices, and personal care preferences. Beyond products themselves, the aesthetics of a retail space or the way salespeople interact with potential customers, for example, can appeal to certain cultural values.

Social Factors

Most consumers are likely to seek out the opinions of others to reduce their search and evaluation effort or uncertainty, especially as the perceived risk of the decision increases. Consumers may also seek out others’ opinions for guidance on new products or services, products with image-related attributes, or products where attribute information is lacking or uninformative. Specifically, consumers interact socially with reference groups, opinion leaders, and family members to obtain product information and decision approval. All the formal and informal groups that influence the buying behavior of an individual are considered that person’s reference groups. Consumers may use products or brands to identify with or become a member of a group. They learn from observing how members of their reference groups consume, and they use the same criteria to make their own consumer decisions. A reference group might be an age cohort, coworkers in your field, or an interest group to which you belong.

Individual Influences

Consumers have different behaviors when it comes to shopping and what they are shopping for, such as convenience items, specialty items, or unsought items. A person’s buying decisions are also influenced by personal characteristics unique to each individual, such as gender and personality. Physiological differences between men and women result in different needs, such as health and beauty products. Just as important are the distinct cultural, social, and economic roles played by individuals and the effects that these have on their decision-making processes. Studies show that spending habits among single men and women are similar. For example, research indicates that the percentage of spending single females expend on entertainment is 41 percent, whereas for men it is around 38 percent. There are, however, some distinct differences when it comes to household purchases and online shopping. A vast majority of the grocery shopping is by women (80 percent). Over half of men, around 60 percent, prefer to make purchases in-store compared to online or through an app. Generational differences can also be seen in shopping habits. Millennial men are reported to spend nearly 60 percent more money on clothing and shoes than females.⁴

Each consumer has a unique personality. Personality is a broad concept that can be thought of as a way of organizing and grouping how an individual typically reacts to situations. Thus, personality combines psychological makeup and environmental forces. It includes people’s underlying dispositions, especially their most dominant characteristics. Although personality is one of the least useful concepts in the study of consumer behavior, some marketers believe that personality influences the types and brands of products purchased. For instance, the car, electronics, or clothing a consumer buys may reflect one or more personality traits.

Psychological Influences

An individual’s buying decisions are further influenced by psychological factors such as perception, beliefs, and attitudes. These factors are what consumers use to interact with their world. They are the tools consumers use to recognize their feelings, gather and analyze information, formulate thoughts and opinions, and take action. Unlike the other three influences on consumer behavior, psychological influences can be affected by a person’s environment because they are applied on specific occasions. For example, individuals will perceive different stimuli and process these stimuli in different ways depending on whether the individual is sitting in class, chatting with friends, or out to dinner with family.

The Decision-Making Process

The purchases that organizations make often involve greater risk than purchases made by individual consumers. For this reason, businesses (and other organizations) tend to base purchase decisions on more data and make purchase decisions based on rational decision-making so purchases will optimize value for the organization and minimize risk. For this reason, the business purchase decision-making process differs from the consumer process. The steps are similar: need recognition, setting specifications, information search (including identification of suppliers), evaluation (including evaluation of suppliers), purchase (“go or no-go”), and post-purchase evaluation. The major difference between the two processes is that businesses decide beforehand what exactly is needed on the purchase (setting specifications) and then seek information regarding products that meet those specifications. In this way, the purchases are more likely to satisfy the needs of the overall organization, thus reducing the risk.

Characteristics of the B2B Market

The main differences between consumer markets and business markets include the following:

1. Purchase volume: Business customers buy in much larger quantities than consumers. Mars must purchase many truckloads of raw materials to make one day’s output of M&Ms. Home Depot buys thousands of boxes of screws and nails each day for resale to consumers. The federal government must use (and purchase) millions of office supplies each day.
2. Number of customers: Business marketers usually have far fewer customers than consumer marketers. As a result, it is much easier to identify prospective buyers and monitor current needs. For example, there are far fewer customers for industrial equipment than there are for consumer goods like paper towels. There are more than 125 million consumer households in the United States.
3. Location of buyers: Business customers tend to be much more geographically concentrated than consumers. The tech industry is concentrated in areas such as California and Texas. Aircraft manufacturing is found in Seattle, Washington; St. Louis, Missouri; and Dallas/Fort Worth, Texas. Suppliers to these manufacturers often locate close to the manufacturers to lower distribution costs and facilitate communication.
4. Direct distribution: Business sales tend to be made directly to the buyer because such sales frequently involve large quantities or custom-made items such as heavy machinery. Consumer goods are more likely to be sold through intermediaries such as wholesalers and retailers.