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This paper revolves around developing a customer strategy is to understand the buyer behaviour. You are asked to present a clear structured report that includes the important aspects of understanding buyer behaviour.
The first step in developing a customer strategy is to understand the buyer behaviour. If a salesperson understands how the buyer thinks and feels about a purchase, the salesperson can work toward providing as much value as possible and ensuring the process goes as smoothly as possible.
Buying procedures and policies can vary greatly from one buyer to another. Some large organizations have very formal processes with a large number of people involved in the buying decision, each having a specific role and responsibility. Even for consumer purchases, individuals can have very different approaches to purchasing. Sometimes, the purchaser can appear to be irrational; the key for the salesperson is to be able to understand the buyer as best as he or she can and to focus on that buyer’s way of thinking.
Consumer buyer behaviour is often more simple and straightforward. There are three main types of consumer buying situations:
Business buyer behaviour is often more complex, and usually involves more people. Review Figure 8.2 on page 174 of your textbook to see a list of the major differences between consumer and business buyers. There are three main types of business buying:
The Buying Process
A salesperson needs to understand how buyers make purchasing decisions so that he or she can be sure to provide the right information to them at the right time. The steps in the typical buying process are outlined in Figure 8.3 on page 177 of your textbook. You should recognize this process from your introductory marketing course, MKTG 3431. This process is appropriate for buyers making complex buying decisions. For routine purchases (such as habitual buying decisions for consumers or straight rebuy situations for businesses), customers often skip or reverse some of the stages. By understanding the stages of the buying process, a salesperson can act in specific ways to add value at the relevant stage. The stages in the buying process are:
The Three Approaches
Different buyer behaviour processes exist for the three different selling approaches. These processes are described below.
Transactional process: The buyer does not want the salesperson to make the process more complex than it needs to be. The buyer wants the salesperson to be efficient, answer only those questions he or she is asked, and make the purchase convenient and hassle-free. The best salesperson in this situation is practically invisible!
Consultative process: The buyer needs help in assessing his or her needs and in evaluating possible solutions. In these situations, the product and the buying situation are often complex. A successful consultative salesperson starts adding value at the very first step in the buying process—need awareness. The salesperson invests time with his or her customer at this stage to help the customer to understand needs and solutions and, at the same time, to build a strong base for future sales. For example, in a complex consultative selling situation, the salesperson may actually help the buyer to write the request for proposal (RFP) that is put out to the market. By investing time in helping the buyer to define his or her needs, that salesperson is in a unique position to be able to fulfill them all perfectly! The salesperson also remains heavily involved with the customer in each subsequent stage of the buying cycle.
Strategic alliance process: The buyer teams up with another company or companies that have similar interests. Together, they seek to gain mutual benefits or competitive advantages from the alliances so that all parties can contribute and add value to this process.
Many factors affect buyer behaviour. We can begin to understand buyers by looking at some basic psychology. Maslow’s Hierarchy of Needs suggests that basic human needs are arranged in a hierarchy according to their sequential importance: physiological, security, social, esteem, and, finally, self-actualization. It can be helpful for the salesperson to understand which need is most likely dominating buyer behaviour for that purchase. For example, your customer may be buying a security system for security, or he or she may be buying it for a social need (a way to keep up with the neighbourhood). These are very different but reasonable needs, and understanding which one is motivating the buyer will lead to very different sales pitches.
Buying decisions can also be influenced by groups in several ways:
Perception is the process by which sensations received by sight, hearing, touch, taste, or smell are interpreted. Buyer behaviour is greatly influenced by perception. Selective perception results in buyers screening out or modifying stimuli if they are experiencing sensory overload or if they are conditioned to use selectivity. We receive so many advertising messages each day that many of us experience overload and just stop listening to or noticing most of these messages. However, many buyers find that when they are considering a specific purchase, they suddenly become aware of relevant messages—for example, when they buy a certain make of car, they suddenly see that make of car on the roads much more frequently than before they made the purchase.
A buying behaviour is an aroused need, drive, or desire that initiates the buying-decision process. Every buying decision has a motive behind it. If the salesperson can understand the buying motive, he or she has a tremendous advantage in selling to the customer. Very often, there are many buying motives, and the dominant buying motive is the one with the greatest influence on the buying decision. A successful salesperson will customize the sales message to address the dominant buying motive.
Buying decisions are based on both emotional and rational buyer behaviour. Emotional buying motives should be addressed with emotional selling appeals. Emotional buying motives are involved in almost every buying decision. The salesperson that is able to connect with the buyer on a personal level is best positioned to understand an appeal to these emotional motives. Emotional motives are often best addressed with benefits. Rationally, we understand that tires for our car provide a certain level of traction and wear, but, emotionally, tires provide safety for ourselves and our family and friends who are our passengers. For many buyers, this purchase is driven by an emotional buying motive and should be addressed with an emotional selling appeal that focuses on safety benefits.
Rational buying motives are most common in business buying situations but also play an important role in many major consumer buying situations. The rational buyer will objectively review the available information. An effective salesperson will use his or her extensive product knowledge to provide all of the required information and will help the customer to assess the features and specifications of the product.
A patronage buying motive is responsible for a customer buying a product from a particular company because of a relationship with the company, or a perception that the company is unique in some way. A business that has many customers with this motive would be in a good position to cross-sell related products to such loyal customers.
Finally, a product buying motive leads to a customer purchasing one product over another because that customer perceives that product as unique. Macintosh computer users are a good example of this, as they tend to be loyal to that specific product and have a very high repurchase rate.
A salesperson needs to develop a sophisticated understanding of his or her buyers in order to be able to identify and communicate with them effectively. In this activity, you will explore some of the available customer information.
Read Chapter 8 of your textbook. Pay particular attention to the tables, figures, definitions, and case studies that were referenced in the preceding topic discussion, and see how they fit within the context of the chapter as a whole. When reading, you may find it helpful to underline or summarize key points to reinforce your understanding. The textbook authors have highlighted key terms and concepts for you and have offered definitions in the margins. These key terms are compiled in a list at the end of each chapter and are important to understand so that you can apply them in your assignments and exam.
Read “Reality Selling Today Video Case Problem” and questions on pages 193 to 194 of your textbook. Then, go to the textbook publisher’s website at http://www.pearsoned.ca/manning. You will need the student access code that was provided with your textbook to gain access to the online resources. Click “Reality Selling Today Video Series” on the Home page, and then watch the two videos of Chapter 8: Ashley Pineda/Pulte Group Home Builders. Consider Ashley Pineda’s situation and answer the six questions that accompany the case on page 194.
In this discussion, you will share your answers to the questions related to the Chapter 8 Video Case Problem found on pages 193 to 194 of your textbook, as well as consider other learners’ responses.