Chapter 4:

Customer
insights

hypotheses about cause-and-effect relationships.

Developing the research plan on how the

information will be gathered.

Marketing relies on good customer

Secondary data is information that already

information. Customer insights are fresh

exists somewhere, having been collected for

understanding of customers and the marketplace

another purpose. Secondary data can be

derived from marketing information that become

accessed by using commercial online

the basis for creating customer value and

databases, which are collections of information

relationships. To gain this information, companies

available from online commercial sources or

must design marketing information

accessible via the Internet. Internet search

systems (MIS), which are people and procedures

engines can be used to locate secondary data,

for assessing information needs, developing the

but the research must verify that the found

needed information and helping decision makers

information is relevant, accurate, current and

to use the information to generate and validate

impartial.

actionable customer and market insights. A MIS

helps to assess information needs, develop
needed information and analyse the right

Primary data is information collected for the

information to form customer insights.

specific purpose at hand. It can be collected

Internal databases are electronic collections of

consumer and market information obtained from
data sources within the company network.
Internal data can be a strong base for a
competitive advantage, because of the potential
of this information. Competitive marketing
intelligence is the systematic collection and

via observational research, which gathers

primary data by observing relevant people,
actions and situations. Ethnographic
research is a form of observational research that
involves sending trained observers to watch and
interact with consumers in their natural
environments

analysis of publicly available information about

Primary data can also be collected via survey

consumers, competitors and developments in the

research, which gathers information by asking

marketing environment. Good marketing

people questions about their knowledge,

intelligence helps gain insights in how consumers

attitudes, preferences and buying

think of and connect with the brand.

behaviour. Experimental research gathers

Marketing research

primary data by selecting matched groups of

Marketing research is the systematic design,

controlling related factors and checking for

collection, analysis and reporting of data relevant

differences in group responses.

subjects, giving them different treatments,

to a specific marketing situation facing an

organisation. The process of marketing
research has four steps:
1.

Defining the problem and research

objectives.

The objective of exploratory research is to

gather preliminary information that will help
define problems and suggest hypotheses. The
objective of descriptive research is to better
describe marketing problems, situations or
markets. Causal research aims to test

Information can be collected via mail, telephone,

personal interviews or online. Mail questionnaires
can be quite massive, while telephone
information is also quickly gathered. Personal
interviewing can be individual or group
interviews. Online marketing research collects
primary data online through Internet surveys,
online focus groups, web-based experiments or
tracking consumers behaviour online.
Online focus groups gather a small group of
people online with a trained moderator to chat

about a product, service or organisation and gain

When collecting marketing information, some

qualitative insights about consumer attitudes and

things must be kept in mind. When executing

behaviour.

international marketing research, cultural

differences and struggles in accessibility must be
kept in mind. There are also concerns regarding

It is often impossible to collect information from

the entire population, so marketers often base
conclusions on samples. A sample is a segment

public policy and ethics in marketing research,

such as intrusions on privacy and the misuse of
the findings of the research.

of the population selected for marketing research

to represent the population as a whole. Three
decisions regarding the sample need to be made:
the sampling unit (who), sampling size (how

Chapter 5: Consumer
buyer behaviour

many) and sampling procedure (how should they

Consumer buyer behaviour is the buying

be chosen). There are probability samples, in

behaviour of final consumers: individuals and

which each member of the population has an

households that buy goods and services for

equal chance of being included, such as simple

personal consumption. All these consumers add

random samples, stratified random samples and

up to the consumer market: all the households

cluster samples. But there are also non-

and individual that buy or acquire goods and

probability samples, such as convenience

services for personal consumption. Consumers

samples, judgment samples and quota sample

make buying decisions every day, but it can be

categories

difficult to determine why they make certain

When collecting primary data, there are two

research instruments: the questionnaire and
mechanical devices. The questionnaire can be via
email, phone or online and are flexible.
Mechanical instruments can help monitor
consumer behaviour.
1

decisions. Consumer purchases are influenced by

different characteristics.

Cultural factors
Cultural factors have an influence on consumer
behaviour. Culture is the set of basic values,

Implementing the research plan means

perceptions, wants and behaviours learned by a

putting it into action. This means collecting,

member of society from family and other

processing and analysing the information.

important institutions. A subculture is a group of

people with shared value systems based on
common life experiences and situations. They are

Interpreting and reporting the findings. The

distinct, but not necessarily mutually

interpretation should not only be done by the

exclusive. Social classes are relatively

researchers, but also by the marketing

permanent and ordered divisions in a society

managers who know about the problem and

whose members share similar values, interests

the decisions that need to be made.

and behaviours.

Customer relationship management (CRM) is

managing detailed information about individual
customers and carefully managing customer

Social factors

touch points to maximise loyalty. It means

capturing and using consumer data to manage

Another influence is social factors. Groups are

customer interactions and build customer

two or more people who interact to accomplish

relationships. Data mining techniques can be

individual or mutual goals. Many small groups

used to access customer data. By using CRM to

influence a persons behaviour. Membership

understand customers, relationships with them

groups are groups in which a person belongs,

can be deeper.

while reference groups serve as direct points of

comparison.

Word-of-mouth influence of friends and other

consumers can have a strong influence on buying
behaviour. An opinion leader is a person within
a reference group who, because of skills,
knowledge, personality or other characteristics,
exerts social influence on others. Marketers try to
identify the opinion leader and aim their
marketing efforts towards this person. Buzz
marketing involves creating opinion leaders to
serve as brand ambassadors. Online social
networks are online communities, such as blogs,
social networking sites or even virtual worlds,
where people socialize or exchange information
and opinions.

Psychological factors
Buying behaviour is influenced by four major
psychological factors: motivation, perception,
learning and beliefs and attitudes. Motive (drive)
is a need that is sufficiently pressing to direct the
person to seek satisfaction of the need.
Motivation research refers to qualitative research
designed to find consumers hidden
motivations. Maslows hierarchy of
needs categorizes needs into a pyramid,
consisting of psychological needs, safety needs,
social needs, esteem needs and self-actualisation
needs.
Perception is the process by which people
select, organise and interpret information to form

Family can have a strong influence on buying

a meaningful picture of the world. People form

behaviour as well. Buying role patterns in families

different perceptions of the same stimulus

change with evolving consumer lifestyles. A

because of three perceptual processes: selective

person belongs to many groups beside the family,

attention, selective distortion and selective

also clubs, organisation and online communities.

retention. Learning describes changes in an

The position of a person in a group is defined in

individuals behaviour arising from experience.

terms of role and status. A role consists of the

A drive is a strong stimulus that calls for

expected actions of a person. People usually

action. Cues are minor stimuli that determine

choose products appropriate to their role and

how a person responds.

status.

A belief is a descriptive thought that a person

Personal factors
Personal characteristics also have an influence on
consumer buyer behaviour. These characteristics
can be the persons age and life-cycle stage, the
persons occupation and economic situation, but

holds about something. An attitude is a persons

consistently favourable or unfavourable
evaluations, feelings and tendencies toward an
object or idea. Attitudes can be difficult to
change, because they are usually part of bigger
pattern.

also lifestyle and personality. Lifestyle is a

persons pattern of living as expressed in his or
her activities, interests and

There are different types of buying decision

opinions. Personality is the unique psychological

behaviour. Complex buying behaviour is

characteristics that distinguish a person or group.

characterized by high consumer involvement in a

purchase and significant perceived differences
among brands. The buyer will pass through a

It can be said that brands also have personalities.

A brand personality is the mix of human traits
that may be used to describe the brand. There
are five general brand personality traits: sincerity,
excitement, competence, sophistication and
ruggedness.

learning process, developing beliefs and attitudes

and then a purchase choice will
follow. Dissonance-reducing buying
behaviour is consumer buying behaviour
characterised by high involvement, but few
perceived differences among brands.

Habitual buying behaviour is consumer buying

passes from first hearing about an innovation to

behaviour characterized by low consumer

final adoption. There are five stages in the

involvement and few significantly perceived

adoption process: awareness, interest,

differences. Repetition of advertisements can

evaluation, trial and adoption.

create brand familiarity (but not conviction),

which can lead to habitual purchases. Varietyseeking buying behaviour is consumer buying
behaviour characterised by low consumer

6: Business markets

involvement, but significant perceived brand

differences.
Business buy behaviour of organisations that
buy goods and services for use in the production
The buyer decision process has five stages.
1.

Need recognition is the first stage, in

which the consumer recognises a problem or
need.

2.

Information search is the stage in which

business buyers determine which products and

services their organisations need to purchase and
then find, evaluate and choose among alternative
suppliers and brands. The business market is

information, the consumer may simply have

many ways.

obtained from personal sources, commercial

sources, public sources and experiential
sources.
Evaluation of alternatives. Alternative

The business markets consist normally with less,

but larger buyers than consumer markets.
Business demand is derived demand: business
demand ultimately derives from the demand for
consumer goods. Business markets demand is
more inelastic and is less affected by short-term

evaluation is the process in which the

price changes, while demand also fluctuates more

consumer uses information to evaluate

quickly.

alternative brands in the choice set.

Purchase decision is the buyers decision
about which brand to purchase. Both the
attitude of others and unexpected situational
factors can influence the ultimate decision.
5.

buying process is the decision process by which

bigger than the consumer markets, and differs in

information search. Information can be

4.

rented or supplied to others. The business

the consumer is aroused to search for more

heightened attention or may go into active

3.

of other products and services that are sold,

Post-purchase behaviour is the stage of

The nature of the buying unit involves more

decision participants and a more professional
purchasing effort. The business buyers decisions
are often more complex and formalized. Finally,
buyer and seller often work on long-term
relationships. Supplier development is the
systematic development of networks of supplier-

the buyer decision process in which

partners to ensure an appropriate and

consumers take further action after purchase

dependable supply of products and materials for

based on their satisfaction or dissatisfaction

use in making products or reselling them to

with a purchase. Cognitive dissonance is

others.

buyer discomfort caused by post-purchase

conflict.

There are three types of business buying

situations. A straight rebuy is a business buying
situation in which the buyer routinely reorders
something without any modifications. A modified

The buyer decision process can be different for

rebuy is when the buyer wants to modify the

new products. A new product is a good, service

product specifications, prices, terms or suppliers.

or idea that is perceived by some potential

A new task is a business buying situation in

customers as new. The consumer must decide to

which the buyer purchases a product or service

adopt them or not. The adoption process is the

for the first time. Systems selling (or solutions

mental process through which an individual

selling) is buying a packaged solution to a

problem from a single seller, thus avoiding all the

1.

Problem recognition: someone in the

separate decisions involved in a complex buying

company recognises a problem or need that

situation.

can be met by acquiring a good or a service.

2.

the business buying process in which a buyer

There are multiple participants in the business

describes the general characteristics and

buying process. The buying centre are all the

quantity of a needed item.

individuals and units that play a role in the

purchase decision-making process.

3.

organisation decides on and specifies the

best technical product characteristics for a

purchased product or service.

Influencers are people in an
organisations buying centre who affect the

needed item.
4.

5.

for evaluating alternatives.

submit proposals.
6.

actual purchase.

supplier or suppliers.
7.

suppliers.

the chosen supplier(s), listing the technical

specifications, quantity needed, expected

organisations buyer centre who control the

time of delivery, return policies and

flow of information to others.

assumed by different people.

Order-routine specification is the stage

in which the buyer writes the final order with

Gatekeepers are people in an

The buying centre is a set of buying roles

Supplier selection is the stage in which

the buyer reviews proposals and select a

Deciders are people who have formal or

informal power to select or approve the final

Proposal solicitation is the stage in

which the buyer invites qualified suppliers to

Buyers are the people in an

organisations buying centre who make an

Supplier search is the stage in which the

buyer tries to find the best vendors.

buying decision, they often help define

specifications and also provide information

Product specification is the stage in the

business buying process in which the buying

Users are members of the buying

organisation who will actually use the

General need description is the stage in

warranties.
8.

Performance review is the stage in

which the buyer assesses the performance of
the supplier and decided to continue, modify
or drop the arrangement.

There are a lot of things that can influence the

business buyer, such as environmental factors.
These can include the economic environment, the
supply of key materials and culture and customs.
Organisational factors such as objectives,
systems and policies can also have an influence.
Also interpersonal factors, such as authority,
status and persuasiveness can exercise their
influence. Lastly individual factors, such as age,
income, education and risk attitudes can play a

E-procurement involves purchasing through

electronic connections between buyers and
sellers, usually online. This can be via reverse
auctions, trading exchanges, company buying
sites and extranet links. Benefits of eprocurement are lower transaction costs and
efficient purchasing.

role in the decision of the business buyer.

The institutional market consists of schools,
hospitals, nursing homes, prisons and other

The business buying process

institutions that provide goods and services to

people in their care. These markets can be

The business buying process has eight stages.

extensive and are often characterized by low

purchase or rent goods and services for carrying

budgets. Government markets consist of

out the main functions of government.

governmental units (federal, state and local) that