Buyer Behaviour Theory – Industrial Goods Markets
The distinction between consumer and industrial goods market. In considering buyer behaviour theory, one needs to understand that the buyer behaviour is concerned with understanding, prediction and influencing the purchase behaviour of both ultimate consumers and industrial users.
The purchasing role and behaviour of ultimate consumers differ considerably from those of industrial buyers. It is therefore necessary for marketers to market the fundamental differences in the nature of these two markets so as to be able to approach them appropriately and profitably. We shall examine a number of factors here which will help us to see the differences between the two markets or buyers.
- Purpose of purchase – Buyers or customers in consumer markets buy for final consumption. Hence, their demand for products is called autonomous demand. Industrial markets are made up of organisations and individuals who buy for resale of the production of other goods. Their demand is therefore referred to as derived demand.
- Size of the market – The numbers of buyers in consumer markets is large. But the buyers buy in small quantities and frequently. In industrial market, the number of buyers is usually smaller than that of consumer markets. But industrial buyers buy in larger quantities and less frequently than the buyers in consumers market.
- Buyers knowledge and Information Search – Industrial users normally make use of professional buyers. These professionals are skilful and knowledgeable in the products they buy. They also seek much information to enable them take good decision in their purchasing activities. Consumers are buying for themselves or their friends. They are not skilled in buying and do not usually go far in their search for information on the purchases they make.
- Geographical spread Of the market – Industrial users are usually few and concentrated in few locations (such as industrial estate). But final consumers are large in number and spread over wide geographical areas. This makes it easier to contact industrial users than final consumers.
- Buying Influence – Buyer behaviour theory suggests that industrial buyers buy on strict specifications and seek economic gains in their deals. It therefore usually take them relatively long time make their purchase decisions. But because they are buying for themselves and not under instructions from others, consumers are not usually so painstaking of meticulous in their buying decisions. Therefore, industrial buyers are more rational than customers (who often emotional) in their purchases decisions.
- Conditions of purchase – Industrial buyers often seek reciprocity in their purchasing activities. They prefer to buy from those who are ready to buy from them. Consumers do not seek this condition. Industrial buyers also demand more customer services than customers.
- Buyer loyalty – Industrial buyers generally try to buy from more than one source at the same time in order to spread their risk. But they usually engage in long term contractual relationship between the customers and the buyers usually buy from one source at a time and are not as loyal to specify brands and or suppliers as industrial users.
Determinants Of Buyer Behaviour Theory
The purchase decision of any buyer at any given time is determined by the interaction of numerous factors. These are the buyer catered factors, situation centred factors, production centred product factors, and marketing centred factors. The interrelationship among these factor are shown are as follows;
Major factor determining buyer behaviour adaption from Kotler.
Buyer Centred Factors
In the buyer behaviour theory, the buyer centred factors are those factors which are inherent in buyer or emulate from the, interplay with other in buyers or emulate from the, and interplay with other (external) factor to determine what they buy. Prominent among these factors are consumer’s cognitions, attitudes, beliefs, values, perception, learning (experience), motivation, organisational objectives, policies and procedures. These factors are not easy to control by marketers.
- Consumer’s cognitions – These relate to the current knowledge beliefs, attitude, value, images and awareness of consumers. In essence, the customer’s understanding of the products he wants goes a long way to help the producers of the goods and services.
- Beliefs, Attitudes and values – Beliefs are people’s ideas or thoughts about things. Attitudes are dispositions, either favourable or unfavourable. Values are people’s expectations or yardsticks for measuring behaviours in terms of what is good and what is not. A change in people’s value would affect their beliefs. A change in beliefs consequently brings a change in attitudes. Most marketing activities are aimed at encouraging favourable attitudes towards specified products.
- Perception – Perception is the way we become aware of happenings or changes in the environments through our sense of hearing, taste, touch, smelling and sight. Different people perceive (receive and response to) the same stimuli in different ways. This way the buyer or the customer has a complete knowledge of the product or the services that is on offer.
- Learning – Learning is the outcome of thinking, reasoning information processing and perception. We learn from our experience or encounters with stimuli every day. Brand loyalty is formed by buyers as a result of their learning. Learning also encourage the customer to know what the benefits are on using the particular products or services.
- Motivation – Motives are the needs, problems and goals which compel or impel people to seek solutions by undertaking purchase actions. The motivational in essence helps the customer or buyer make an inform decision.
- Organisational objectives – organisations buy in order to use products to achieve certain objectives. The objectives include the production and sale of goods and services, creation of good corporation image and discharge of social responsibilities.
- Organisation policies – Organisational buyers or industrial users are guided by already formulated policies in their purchase decisions. These policies may include reciprocity, best quality, local sourcing of materials, best quality and guarantee.
- Procedures – Organisational procedures are guidelines or rules for taking decisions or carrying out activities. The procedure for making purchases in an organisation may specify that the decision be made by a number of officers. The composition of such a purchasing team would invariable affect what is bought and it’s source.
Product Centred Factors
The decision of a buyer to buy or not to buy a particular product will be influenced in one way or other by some of the characteristics possessed or not possessed by the product concerned. The most prominent among the factors or characteristics of products which are of interest to buyers are the products. Features, styling, options, quality, packaging, brand name, image, conformity to specifications or standards, price control of the producer or seller who has to manipulate them to suit the purpose of buyers.
In conclusion, there are requirements that must be followed for products or services to reach its maximum capacity of satisfaction. These and more have been described as the processes of satisfying the customers’ needs and wants. An understating of how the customer’s needs or wants should be satisfied becomes the most important aspect of production or the rendering of services to the customers. The buyer behaviour theory put into the same equation the profit maximization of the producers as well as the satisfaction of the customers or consumer into discussion. This simply means that all avenues to derived satisfactions must be put into question before final distribution is effected.