Buyer Behaviour and Buying Decision

(a) The process by which a consumer selects, purchases, uses, and disposes of goods and services to satisfy needs and wants

Buyer behaviour covers the whole decision process of a consumer — from recognising a need, searching for and evaluating alternatives, making the purchase, to using and disposing of the product — not pricing, shelf display, or packaging decisions made by the firm.

The consumer buying decision process describes the mental steps a buyer passes through before, during and after purchasing a product. It has five stages:

1. Need recognition The buyer becomes aware of a gap between the actual and desired state. A need may be triggered by internal stimuli (hunger, thirst) or external stimuli (advertisement, friends). Example: Ramesh feels thirsty after playing football, or sees an advertisement for a new smartphone and feels his old phone is outdated.

2. Information search The buyer searches for information to satisfy the recognised need. Sources include personal sources (family, friends), commercial sources (advertisements, salesmen), public sources (media, reviews) and experiential sources (handling or using the product). Example: Ramesh asks friends about smartphones, reads online reviews and visits shops to compare models.

3. Evaluation of alternatives The buyer compares the available options on the basis of price, quality, features, brand image and after-sales service, and forms a preference ranking. Example: Ramesh compares Samsung, Xiaomi and iPhone on price, camera quality and warranty, and shortlists two models.

4. Purchase decision The buyer decides to buy the most preferred alternative — choosing the brand, dealer, timing and payment method. The decision may still be influenced by others' attitudes or unexpected situations. Example: Ramesh finally buys a Xiaomi phone from a nearby dealer, paying by card.

5. Post-purchase behaviour After the purchase, the buyer experiences satisfaction or dissatisfaction by comparing performance with expectations. Satisfied buyers repeat the purchase and recommend the product; dissatisfied buyers may return it or spread negative word of mouth. Example: If the phone works well, Ramesh is satisfied and recommends it to friends; if it gives problems, he feels dissatisfied and warns others.

Thus, the process moves from need recognition to post-purchase evaluation, and marketers must understand each stage to design an effective marketing strategy.

Consumer buyer behaviour refers to the way consumers select, purchase, use and dispose of products and services to satisfy their needs and wants. It is influenced by several factors, which are broadly grouped into cultural, social, personal and psychological factors. Any five factors are described below.

1. Cultural factors Culture is the most basic determinant of a person's wants and behaviour. It includes the values, beliefs, customs, and traditions that a person learns from society. For example, food habits, dress sense, and language differ from culture to region. A subculture (such as ethnic or religious groups) and social class also shape buying. A person's social class — measured by income, occupation, and education — strongly affects the type of products bought, such as cars, clothing, and housing.

2. Social factors Social factors include reference groups, family, and social roles and status. Reference groups are groups to which a person belongs or aspires to belong, such as friends, colleagues, or celebrities, and they influence product and brand choice. Family is the most influential buying unit; family members play the roles of initiator, influencer, decider, buyer, and user. A person's role and status in society also affect purchase — a manager may buy formal suits while a student buys casual clothes.

3. Personal factors Personal factors include age, occupation, economic situation, lifestyle, and personality. Buying behaviour changes with age — a child buys toys, a youth buys fashion items, and an older person buys health products. Occupation influences needs — a labourer buys work clothes while an executive buys business suits. Economic situation (income, savings, borrowing power) decides how much and what quality a consumer can buy. Lifestyle and personality also shape brand and product preferences.

4. Psychological factors Psychological factors include motivation, perception, learning, beliefs, and attitudes. Motivation drives a person to satisfy a need; for example, hunger motivates food purchase. Perception is how a person selects and interprets information — two people may see the same advertisement differently. Learning comes from experience and changes behaviour. Beliefs and attitudes create a lasting like or dislike for a brand, which strongly influences buying decisions.

5. Situational factors Situational factors refer to the conditions at the time of purchase, such as time, place, mood, and occasion. A consumer may buy a costly gift during a festival like Dashain or Tihar but buy an ordinary item on a normal day. Store location, store atmosphere, availability of the product, and the presence of companions also affect the buying decision. For example, a consumer may buy a product on impulse when it is displayed attractively near the billing counter.

Conclusion Thus, consumer buyer behaviour is the result of a combination of cultural, social, personal, psychological, and situational factors. Marketers must study these factors carefully to design products, prices, promotion, and distribution that match consumer needs.

Buyer behaviour (also called consumer behaviour) refers to the study of how individuals, groups, and organisations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. It includes the mental and physical activities — thinking, feeling, searching, evaluating, purchasing, and post-purchase use — that a buyer goes through before and after a purchase. In short, it answers the questions: what consumers buy, why they buy, when, where, how, and from whom they buy.

Major factors influencing buyer behaviour

1. Cultural factors

• Culture: The set of values, beliefs, customs, and norms learned from society. It is the deepest influence — e.g., food habits, dress, and language differ across cultures.
• Sub-culture: Smaller groups within a culture based on religion, region, caste, nationality, or age — e.g., Newar, Sherpa, or Terai culture in Nepal. These create distinct market segments.
• Social class: Relatively permanent divisions in society based on income, occupation, education, and wealth (upper, middle, lower class). People in the same class tend to show similar buying patterns — e.g., luxury cars vs. bicycles.

2. Social factors

• Reference groups: Groups that directly or indirectly influence a person's attitudes and behaviour — family, friends, colleagues, religious groups. Membership groups, aspirational groups, and opinion leaders/celebrities shape choices.
• Family: The most influential buying unit. Family members play roles as initiator, influencer, decider, buyer, and user. Family life-cycle stage (young single, married with children, empty nest) strongly affects spending.
• Roles and status: A person's position in groups (manager, student, mother) carries expected behaviour that influences product and brand selection.

3. Personal factors

• Age and life-cycle stage: Needs change with age — toys for children, fashion for youth, health products for the elderly.
• Occupation: A doctor buys formal wear and professional tools; a farmer buys seeds and implements.
• Economic circumstances: Income level, savings, and credit availability determine purchasing power and product class.
• Lifestyle: Pattern of living expressed through activities, interests, and opinions (AIO) — e.g., health-conscious, adventurous, or traditional lifestyle.
• Personality and self-concept: Traits like confidence, sociability, and conservatism influence brand choice; buyers often choose brands matching their self-image.

4. Psychological factors

• Motivation: Inner drives (Maslow's hierarchy — physiological, safety, social, esteem, self-actualisation) push a person to act.
• Perception: How a person selects, organises, and interprets information — selective attention, distortion, and retention affect how advertising is received.
• Learning: Changes in behaviour from experience; repeated satisfaction builds brand loyalty.
• Beliefs and attitudes: Descriptive thoughts and consistent evaluations about products/brands that are hard to change.

How understanding buyer behaviour helps marketers formulate effective marketing strategies

1. Market segmentation and targeting: Knowledge of cultural, social, and personal differences lets marketers divide the market into homogeneous groups (youth, women, high-income) and target the most profitable ones.
2. Product design and development: Understanding needs, motives, and lifestyles helps design products with the right features, quality, packaging, and brand image that buyers actually want.
3. Pricing decisions: Awareness of economic circumstances, price sensitivity, and perceived value helps set prices — premium pricing for status-seeking buyers, economy pricing for price-conscious segments.
4. Distribution (place) decisions: Knowing where and when buyers shop (supermarkets, online stores, rural haats) helps select the right channels and ensure availability.
5. Promotion and advertising: Understanding perception, learning, attitudes, and reference-group influence helps choose the right message, media, appeals, and celebrity endorsements to persuade buyers.
6. Building brand loyalty and repeat purchase: Insight into post-purchase behaviour (satisfaction, cognitive dissonance) helps marketers provide after-sales service, guarantees, and follow-up to retain customers.
7. Predicting market trends and competition: Studying changing buyer tastes and habits allows marketers to anticipate demand shifts and gain competitive advantage.
8. Reducing marketing risk and cost: Strategies based on real buyer behaviour are more accurate, so wastage of resources on wrong products, prices, or media is minimised.

Conclusion: Buyer behaviour is influenced by a complex mix of cultural, social, personal, and psychological factors. A marketer who studies these factors can design the right product, at the right price, through the right channel, with the right promotion — that is, build an effective marketing strategy that satisfies customers and achieves organisational objectives.

A buyer is a person or organization that purchases goods or services in exchange for money or other value, for their own use, for use by others, or for resale. The buyer may or may not be the final consumer.

Need for studying buyer behaviour (5 marks)

Buyer behaviour is the study of how individuals and organizations select, buy, use and dispose of products to satisfy needs. It is needed because:

1. Understanding customer needs: it tells marketers what customers want, so products can be designed to satisfy them.
2. Marketing mix decisions: knowledge of buying motives, price sensitivity, preferred stores and media habits helps in deciding product, price, place and promotion.
3. Market segmentation and targeting: differences in age, income, lifestyle and attitude allow the market to be divided and the right segments chosen.
4. Predicting demand and spotting opportunities: changes in tastes and buying patterns reveal new opportunities and warn of falling demand.
5. Competitive advantage: a firm that understands its customers better can satisfy them better than rivals.
6. Customer satisfaction and loyalty: knowing the buying process and post-purchase feelings helps to reduce dissatisfaction and keep customers.

Buying process of an organizational buyer and determinants of organizational buying behavior (8 marks)

Organizational buyers are manufacturers, resellers, government offices and institutions (such as hospitals, schools and hotels) that buy goods and services to run their business or to resell, not for personal use. Their buying is more formal, involves several people and is usually in large quantities.

Buying process of an organizational buyer

1. Problem recognition: The organization realizes a need, for example machinery wears out, raw material stock runs low, or a new product requires new inputs. The need may arise inside the firm or be triggered by a salesperson's offer.
2. General need description: The buyer decides the characteristics and quantity of the item needed, such as capacity, quality and reliability, often with the help of engineers and users.
3. Product specification: A technical team prepares detailed specifications (size, material, performance, delivery terms). Value analysis may be used to see whether cost can be reduced without lowering quality.
4. Supplier search: The buyer looks for qualified suppliers through trade directories, advertisements, trade fairs, internet search and past contacts.
5. Proposal solicitation: Qualified suppliers are asked for quotations, catalogues or written proposals. For large and costly items, formal presentations are invited. In government purchases this is done through tender or bidding.
6. Supplier selection: The buying center evaluates proposals on price, quality, delivery time, after-sales service, credit terms and the supplier's reputation, and selects one or more suppliers.
7. Order routine specification: The final order is placed, stating quantity, delivery schedule, payment terms, warranty and similar details. Firms may use blanket or long-term contracts instead of repeated orders.
8. Performance review: The buyer checks the supplier's performance against expectations, through feedback from users, and decides whether to continue, modify or end the relationship.

The full eight steps are followed in a new task purchase. A straight rebuy skips most of them, and a modified rebuy covers some.

Major determinants of organizational buying behavior

1. Environmental factors: The level of demand, economic outlook, interest rates, rate of technological change, political and legal conditions, and competition. In an uncertain economy, firms cut investment and inventories.
2. Organizational factors: The firm's objectives, policies, procedures, structure and systems. For example, a policy of centralized purchasing, rules on approval limits, or a preference for local suppliers shapes buying decisions.
3. Interpersonal factors: The buying center includes users, influencers, buyers, deciders and gatekeepers, whose interests, authority, status and persuasiveness differ. Their interaction and conflict affect the decision.
4. Individual factors: The age, education, job position, personality, risk attitude and motives of each participant. A risk-averse purchase manager may prefer a known supplier even at a higher price.

Together these factors explain why organizational buying is rational and economic in form, yet is still influenced by relationships and personal considerations.