Economists assume consumers are economic men: they know all facts, compare,. maximize value, etc.

Above view assumes following economic needs: economy of purchase convenience efficiency dependability improvement of earnings

See exhibit 7-3

Needs motivate consumers:

Needs are basic forces motivating a person to do something. When a need is not satisfied, drive is created.

PSSP: solve lower order needs, then move on to higher order needs. See exhibit 7-3

Perception determines what consumers see and feel:

• Selective exposure: we seek only that which interests us
• Selective perception: we screen out conflicting information
• Selective retention: we remember only what we want to.

Cues: stimuli in the environment

Response: effort to satisfy drive

Reinforcement: if response is followed by satisfaction

Many needs are culturally learned

Attitudes relate to buying

Belief: person’s opinion about something

Ethical issues: May have to address issues such as meaning of low fat, lite, etc.

Lifestyle dimensions: may help. See exhibit 7-5
 

• Who makes the purchase? Uses? Influences?
• Social class: occupation, education, type and location of housing, etc.
• Reference groups: are important
• Opinion leaders: person who influences others
• Culture: whole set of beliefs, attitudes, and ways of doing things

Purchase reason varies.

Time and surroundings can also make a difference

• Becoming aware of problem
• Gather information
• Evaluate alternatives
• Decide on solution
• Evaluate decision
• See exhibit 7-7

• Awareness
• Interest
• Evaluation
• Trial
• Decision
• Adoption

Business and organizational customers are buyers who buy for resale or to produce other goods and services

See exhibit 8-1

Three kinds of buying processes:

1. New task: Organization has a new need -- buyer wants a lot of information
2. Straight rebuy: routine repurchase
3. Modified rebuy: some review is done

They like: information on new goods, price changes, supply shortages, etc.

Most firms have centralized buying

Buyers consider: total cost of owning and operating, productivity, quality, maintenance, repair, delivery time, etc.

Behavioral needs are relevant: exhibit 8-3

Firms are faced with multiple buying influences: see exhibit 8-2
 

• Inspection buying: looking at all items
• Sampling buying: looking at only part of items
• Description buying: buying from written description
• Negotiated buying: contract that allows changes

Buyers like to spread risk by using several sources of suppliers

Computer buying is also becoming common and JIT delivery more important

Reciprocity may be utilized
 

Only 363,000 factories

Detailed information is available from SIC information
 

US has 2,000,000 service firms Purchasing is handled by whoever is in charge
 

Retailers and wholesalers use reorders as straight rebuys and use computerized inventory control

Buyers are in close contact with sales people

Some retailers use committees
 

20% of GDP is spent by government units

Use mandatory bidding bidding lists, negotiated contracts, etc., are also used

Some foreign governments may require “grease money”