Types of Buying Decisions
Different types of buying decisions can involve logical, impulsive, and emotional motivations.
LEARNING OBJECTIVES
Distinguish between a consumer and business buying decision
KEY TAKEAWAYS
Key Points
- Buying decisions are based on buying behavior. Consumer behavior and business behavior can differ because their buying processes are different.
- Consumers will often buy on emotion or impulse whereas businesses will buy based on need.
- The type of buying decision impacts the marketing mix and the promotional mix for a product. It will also affect the product life cycle.
- Sometimes the type of product will make a difference in the buying decision. For consumers, large ticket items, such as an appliance, a car, or a home, aren’t impulse items.
- A company needs to know about the features of a product and how it will help fill a specific need. Businesses are also worried about price and return on investment.
Key Terms
- buyer behavior: the process used to decide whether to purchase a product
Type of Buying Decisions
Different types of buying decisions can include logical, impulsive, and emotional motivations. Buying decisions are based on buyer behavior. Consumer behavior and business behavior can differ because their buying processes are different. Consumers will often buy on emotion or impulse whereas businesses will buy based on need. The type of buying decision impacts the marketing mix and the promotional mix for a product. It will also affect the product life cycle.
Because consumers often buy on emotion, ads can affect the buying decision. Consumer products are often advertised on television in a way that tries to create an emotional tie with the buyer. An example of this are the alcohol ads with beautiful women and people having a good time, or car ads that stir emotions of envy for racing the streets like a race car driver.
Food Market: Buyer behavior shapes buying decisions.
Emotional tactics don’t work well with businesses. A company needs to know about the features of a product and how it will help fill a specific need. Businesses are also worried about price and return on investment.
Sometimes the type of product will make a difference in the buying decision. For consumers, large ticket items, or such as an appliance, a car, or a home, aren’t impulse items. Most people can’t afford to buy a new car when they want one, they need to wait until their current car needs to be replaced. This is why companies can influence what type of car a person will buy, but not when they will buy one.
Funds Available Relative to Costs
Marketing departments need to look at what types of advertising are available that will keep them within budget.
LEARNING OBJECTIVES
Review how and why funds are allocated and available relative to costs
KEY TAKEAWAYS
Key Points
- Each type of advertising is sold at a different rate and a company has a limited budget in which to promote a product.
- To determine the best type of promotional strategy, a company should look at its target market. Consumers in each type of market will have a preferred form of advertising.
- Other factors that affect the funds available for product promotion include the budget for the overall product launch and the expected length of the introduction phase.
Key Terms
- budget: An itemized summary of intended expenditure, usually coupled with expected revenue.
Funds Available Relative to Costs
No company has an unlimited promotional budget. Marketing departments need to look at what types of advertising are available that will keep them within budget.
Different Types Of Advertising
There are different types of advertising available. They include Internet marketing, television ads, radio ads, special events, magazine and newspaper ads, billboards, and endorsements. Each type of advertising is sold at a different rate and a company has a limited budget in which to promote a product.
Tram Advertisement: Different forms of advertising charge different rates and can impact the promotional mix budget.
Determining the Promotion Strategy
To determine the best type of promotional strategy, a company should look at its target market. Consumers in each type of market will have a preferred form of advertising. Companies should determine which forms of promotion will reach the most consumers in a specific target market. This strategy will help marketing departments efficiently use their promotional budget.
Other Factors That Can Affect Funds
There are other factors that can affect the funds available for a promotional mix. When a company is looking at launching a new product, they need to consider research, development, production, and marketing. A company may focus more on the research and development of a product, which will affect the amount of money that is available for marketing and production.
Another factor that will affect funds for promotional strategies will be the estimated cost of the product launch. When a product enters the market, it will most likely lose money until it is accepted by consumers. If a product is estimated to have a long introductory phase, it will affect the promotional strategy and the funds that are available for advertising.