1. Welcome to MKT 100-021Week 7– Understanding Buyer behaviour Anthony Francescucci Assistant Professor, Marketing Please ensure all electronic devices are in “silent mode”, “vibrate mode” or “turned off” 1

2. Agenda

3. Module 4 Understanding Buyer Behaviour & Market Research 3

4. Consider this Scenario 4

5. Consumer Buying Decision (CBD) Process 5

6. CBD Process – Habitual Shopping 6

7. Why does CBD change with Habitual purchases? 7

8. CBD Process – Recreational Shopping 8

9. CBD Process – Complex Shopping 9

10. Field of Buyer Behavior Knowledge is Power 10

11. A Model of Consumer Behavior 11

12. What Influences Consumer Behaviour? Cultural Factors Social Factors Personal Factors 12

13. Culture The fundamental determinant of a person’s wants and behaviours acquired through socialization processes with family and other key institutions 13

14. Subcultures Nationalities Religions Racial groups Geographic regions 14

15. Example of cultural differences Differences Between Cultures “A house should be dusted and polished three times a week.” Numbers shown are percentages agreeing with statement 15

16. Numbers shown are percentages agreeing with statement Example of cultural differences Differences Between Cultures “Everyone should use deodorant.” 16

17. MKT100 Numbers shown are percentages agreeing with statement Example of cultural differences Differences Between Cultures “My children are the most important thing in my life.” 17

18. Social Factors Reference groups Family Social roles Statuses 18

19. Personal Factors Age Life cycle stage Self- concept Occupation Lifestyle Wealth Values Personality 19

20. Professional or business buying behaviour 20

21. the Business Buying process 21

22. Buying Situation Straight rebuy Modified rebuy New task 22

23. Depends on buying Situation 23

24. Market Research 24

25. The marketing research process Define the problem Collect data Present findings Develop & design research plan Analyze information Make decision 25

26. 1. Define the problem Not too broadly Not too narrowly 26

27. Research Objectives to address problem 27

28. 2. Developing the research Plan 28

29. 2. Develop the research plan Data sources 29

30. 2. Develop the research plan Type of Research 30

31. 2. Develop the research plan Type of Research 31 Descriptive Research

32. 2. Develop the research plan Research approaches 32

33. Research instruments 2. Develop the research plan 33

34. Qualitative research

35. Quantitative Research

36. 2. Develop the research plan Sampling Plan 36

37. 2. Develop the research plan Contact Methods 37

38. On-line research 38

39. 3. Information collection is; 39

40. 4. Analyze the information 5. Present the findings 6. Make the decision 40

41. Any Questions 41

42. Metric 5:Markup & Margin 42

43. Mark-up versus Margin 43

44. Margins and mark-ups 44 Price $15 Cost $10 Margin $ Mark-up $ $5 Margin % 33.3% 100

45. Margins and mark-ups 45 Price $15 Cost $10 Margin $ Mark-up $ $5 Mark-up % 50.0% 100

46. Markup or Margin? 46

47. Relationship between Margins & Markups 47

48. Example – Part 1 48 You are a manufacturer of widgets. Your cost to manufacture and package your widget is $10/unit. You decide to sell the product to your wholesaler for $19/unit. You have marked-up the product $9, which will cover your operating expenses and provide for a nice profit. Cost = $10 Markup $ / Margin $= $9 Price = Wholesale Cost = Cost + Markup = $10 + $9 = $19 Markup (%) = Markup $ / Cost * 100% = $9 / $10 = 90% Margin (%) = Margin $ / Price * 100% = $9 / $19 = 47.4%

49. Example – Part 2 49 Let’s continue: you find a distributor willing to carry and move your product for a 25% margin. Wholesale Cost = $19 Wholesale Margin (%) = 25% Cost = Price x (1- Margin %) Wholesale Price = = Wholesale Cost / (100% - Wholesale Margin) = $19 / (100% - 25%) = $25.33 Wholesale Markup = Wholesale Price - Wholesale Cost = $25.33 - $19 = $6.33 Wholesale Markup (%)= Wholesale Markup / Wholesale Cost*100% = $6.33 / $19 * 100% = 33.3%

50. Example – Part 3 Finally, the wholesaler is able to sell the product to the retailer. In this industry, it is standard for products of this type to be marked-up by the retailer 50%. Retailer Cost = $25.33 Retail Markup (%) = 50% Retail Markup = Retailer Cost * Retail Markup (%) = $25.33 * 50% = $12.67 Retail Price = Retailer Cost + Retail Markup = $25.33 + 12.67 = $38 Retail Margin (%) = Retail Markup / Retail Price = $12.67 / $38 = 33.3% 50

51. Let’s complete the worksheet 51

52. Before you leave today Hand In: 52

53. See you next Week 53