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developing a customer strategy is to understand the buyer behaviour.

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Topic 1: Understanding Buyer Behavior

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 versus Business Buyers

Consumer buyer behaviour is often more simple and straightforward. There are three main types of consumer buying situations:

• Habitual buying decision: Requires very little consumer involvement and brand differences are usually insignificant. For most buyers, examples include buying laundry detergent, shampoo, or milk.
• Variety-seeking buying decision: Is also low involvement, but there are important perceived differences between brands. For most buyers, examples include purchasing a chocolate bar, a drink in a bar, or a fast-food meal.
• Complex buying decision: Requires a high degree of involvement by the consumer for an important decision. For most buyers, examples include buying a car, a house, or a computer.

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:

• New-task buy: The first-time purchase of a product or service; this is the most involved buying decision
• Straight rebuy: The routine purchase of items needed; this requires the least involvement
• Modified rebuy: A routine purchase, but with a non-routine process, in which the buyer wants to reconsider product specifications, prices, or suppliers

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:

• Need awareness: At this stage, the buyer recognizes that something is imperfect or incomplete and there is a need for a new solution. A salesperson can create value at this stage by helping the customer to determine the magnitude of his or her problem and the possible solutions.
• Evaluation of solutions: At this stage, the buyer begins searching for information to help him or her evaluate possible solutions. A salesperson can add value at this stage by providing useful information and by documenting value-added solutions.
• Resolution of problems: At this stage, the customer is evaluating solutions and resolving outstanding issues. A salesperson can add value by being responsive and by writing a complete written proposal.
• Purchase: At this stage, the customer makes the decision to purchase. A salesperson can add value by doing his or her best to make the purchase hassle-free by facilitating financing, arranging delivery and installation, and expediting the order.
• Implementation: At this stage, the customer completes the process and uses the product. A salesperson can add value by ensuring his or her post-sales service is impeccable, including delivery, installation, invoicing, and any other necessary follow up.

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.

Buyer Behaviour

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:

• Role influences: Individuals serve roles within their families, groups, organizations, and institutions. The buyer may be fulfilling a role that may impact his or her buyer behaviour. For example, a mother buying a snack for her child may be playing a different role than when she buys a snack for herself and may have different needs and buyer behaviour.
• Reference group: Buyers may be members of reference groups to whom they compare themselves. How teens purchase clothing is a clear example of this; often teens will purchase the same labels that their favourite athletes, singers, or actors wear.
• Social class: Buyers may be operating within the parameters of their social class. A social class is a group of people who share similar values, interests, and behaviours. Buyers with this in mind will choose products that suit their perceived position and status.
• Culture: Most people consider themselves part of a culture, whether it is Canadian culture, for example, or a micro-culture within Canadian culture. In Canada, there are some very important micro-cultures, such as those comprising elderly consumers, Chinese Canadians, and French Canadians. Many purchases are affected by these cultural influences and expectations.

Managing Perceptions

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.

Activity 1: Understanding Buyer Behaviour

Introduction

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.

Part A: Reading

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.

Part B: Consider a case problem

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.

Part C: Discussion 3.1 Customer Strategy Case

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.