How & Why People Buy

1. How & Why People Buy • People buy according to a Hierarchy of Needs(Maslow) • Self-actualization • Self-esteem/Ego • Social • Safety • Physiological

2. How & Why People Buy • Values/Lifestyle influence buying behavior • VALS instrument classifies buying behavior based on resources and primary motivation • Three frames of reference: • Principle- Thinker, Believer • Status- Achiever, Striver • Action- Experiencer,etc

3. How& Why People Buy • Buying behavior depends on the nature of the purchase • 1. Routine- repeat purchase with no new information • 2. Modified- repeat purchase with some new information(product characteristics,etc) • 3. New- first time purchase, new technology & uses, require learning/assessment

4. Buyers can be grouped into Market Segments • Segments can be based on Values(VALS) or other characteristics such AS: • 1. Demographics-age,income for consumers: type &size of farm/business • 2. Psychographics- values, attitudes • 3. Benefits- nature of product and what it does for the purchaser(perceived in nature)

5. A Look At Large Farm Purchaser Behavior • Purdue Study of Large Farms(website) • Large Commercial Farms are one segment of farm types(List of farm types) • Commercial buying behavior differs from consumer buying

6. Delineation of Market Segments-research techniques • Market segments can be derived by: • 1. Ex ante delineation- classification based on characteristics • 2. Ex post- classification based on customer responses/statistical derivation using SPSS or other programs based on homogeneous grouping of responses(Lab project)

7. Examples of Statistical Segmentation of Markets • GMO foods • Natural food buying • Shopping behavior • Other