Consumer Behaviour Report: Tesco's B2C and B2B Strategies

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CONSUMER BEHAVIOUR

TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
P1 Explain and analyse the stages of the consumer decision making journey for a given
product or service........................................................................................................................2
P2 Explain why it is important for marketers to map a path to purchase and understand
consumer decision making..........................................................................................................5
LO2..................................................................................................................................................8
P3 Compare and contrast the key differences of the decision making process in the context of
B2C and B2B, providing specific examples................................................................................8
P4 Evaluate the different approaches to market research and methods of research used for
understanding the decision making process in both B2C and B2B contexts............................10
LO3................................................................................................................................................12
P5 Evaluate how marketers can influence the different stages of the decision making process
of B2C and B2B, giving specific examples...............................................................................12
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

LIST OF FIGURES
Figure 1: Consumer decision making stages...................................................................................3
Figure 2: Factors impacting consumer decisions.............................................................................4
Figure 3: Black box model..............................................................................................................5

LIST OF TABLES
Table 1: Distinctions of B2B and B2C business models.................................................................8

Introduction
Business that deals in products and services needs to identify consumer’s behaviour for studying
customer, organisation, individual and group criteria of buying, using, selecting, etc for giving
satisfaction to requirements. The current report will focus on B2C and B2B that are identified as
commercial transaction forms in which B2C refers to sell goods directly to buyers and B2B that
sells its goods to different businesses. The current report will analyse consumer decision making
stages for service or product in context to Tesco that is best example of B2B and B2C business
forms. It will also explain mapping path that is used by marketers to understand and purchase
buyer decision making. Moreover, the study will contrast and compare difference within B2B
and B2C by evaluating decision making criteria. It will further discuss approaches and methods
of market research that makes easy for understanding context of B2B and B2C’s criteria of the
decision making.
In addition, report will give ways in which stages of decision making is impacted by marketers in
reference to B2B and B2C fields.
1

LO1
P1 Explain and analyse the stages of the consumer decision making journey for a given product
or service
The business era now-a-days consist of various strategies for increasing business revenues and
profits that is done by evaluating consumer demand patterns and expectation related to specific
products and services. The consumer decision making is important aspect for any business as the
decision contains product purchase that affects sales and profits of business. Consumer decision
making refers to process in which buyers determines their needs, evaluates alternatives, collect
necessary information, creates purchasing decision etc. The actions of customers for a product or
service gets impacted by ecological and psychological factors that are controlled by environment
factors that comprises social, cultural and group values (East, et.al, 2016). For instance, Tesco is
best practitioner of B2C transactions by serving time to time products according to consumer
demands using store as well as online platform that makes easy to reach potential customers.
Tesco is identified as top leader of retail industry of UK. It operates within thousands of
hypermarkets, convenience stores and supermarkets in UK, central Europe, Ireland and Asia.
It was started with small grocery store in 1919 by Jack Cohen and slowly started by creating
huge number product category after which it has became market leader. The products and goods
are developed according to consumer needs and requirements. As the organisation deals with the
variety of products, the main product that is coffee is crucial product that has low availability in
markets due to challenges such as labour rights, poverty and smallholder livelihoods. Here, the
purchase of coffee through customers consists of various decisions and needs for which the good
gets sold that means B2C field is known by purchasing of buyers. The context of B2C identifies
business activities in selling goods to consumers (Dotzel and Shankar, 2019). For instance,
purchasing of coffee by buyers from retailer is called as B2C transaction. The product is
purchased by consumer with specific need or desire or requirement that needs to be satisfied
after product purchase. So the decision of making coffee purchase has five stages that consumer
goes through and as marketing associate it will help in identifying buying criteria of customer
using following stages;
2

Stage 1 – Problem Recognition – The decision of buyer starts with some problem for which
wants or need for product needs to be satisfied within consumer. For instance – buyer receives
various guests at weekend and even works for long hours for which it needs coffee to serve guest
and to be active for completing jobs and for this need of product at home rises.
Figure 1: Consumer decision making stages
(Source: Katryn Stewart, 2018)
Stage 2 – Search Process – The product that is required by customers requires research through
search engines, family, relatives etc by asking quality of products and availability area (Ashman,
et.al, 2015). It is risky stage as wrong information of coffee product might delay in product
purchases.
Stage 3 – Evaluating Alternatives – the best deal of getting products is started at the stage that
aims on quality and price of product. Checking reviews and price comparison with retailers are
parameters for deciding to purchase product or not.
Stage 4 – Selection Stage – After comparing customer decides place and purchasing area for
product. The purchase of coffee by buyer is decision either from advertisement or the purchase
that has been made earlier from Tesco.
3

Stage 5 Evaluation of Decision – It helps in determining consumer satisfaction with product
purchase (Zhang and Benyoucef, 2016). The marketers here have to wait for reviews or next
purchase that helps in knowing brand popularity within consumer.
There are various reasons that impact the decision of customers for buying coffee that are listed
below:
 The age is global reason for which coffee might create negative impact on health under
which purchasing coffee decision can be dropped by customers.
 The lifestyle of person plays important role that affects decision for coffee as it is might
possible that buyer likes to drink cold beverages in which coffee is excluded.
 The coffee product cost higher and some of the families or individual cannot afford to
buy the product that directly impacts decisions (De Mooij, 2019).
Figure 2: Factors impacting consumer decisions
(Source: Chu-Chai Henry Chan, 2018)
4

P2 Explain why it is important for marketers to map a path to purchase and understand consumer
decision making
There are various factors that have major impact on final buying decision of consumers. All the
reasons and factors that are impacting decisions are saved under consumer black box which is
known as buyer’s head. In the head of customer, “whys” of purchasing product is developed that
helps in taking major decisions. The purchase behaviour of customer is depending on stimuli that
are receiving from environment that comprises 4ps of marketing mix and factors and forces of
macro environment. The stimuli move in black box of purchaser for making decision. The box
carries two parts that determines buyer reaction on purchasing of product first is characteristics
and second is decision process (Schütte and Ciarlante, 2016). Then the result taken out in buyer
head is determined as buyer response for purchasing the product that comprises buying
preferences and attitude. Therefore, black of purchaser plays important role for identifying
buying behaviour of customers regarding coffee.
Figure 3: Black box model
(Source: Maximilian Claessens, 2015)
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It is important for Tesco marketers for understanding transformed stimuli into responses under
buyer’s head. The characteristics of consumer plays important role in knowing reaction as well
as perception towards given stimuli in which decision in black box is finalised and gets impacted
from various factors (Oke, et.al, 2016). The black buyer box has several factors that might
change decisions of customers for purchasing the product of coffee from coffee that includes:
 Cultural Factors – In this, the decision of purchasing product gets affected in black box
due to factors such as values, wants, behaviours and perception that is grabbed by buyer
from the society of country.
 Social Factors – The customers here focuses on various factor combination that consist
of income, education, occupation, wealth etc that affects decision of purchasing the
product of Tesco.
 Personal Factors – the marketer analyses factor of black box based on buyer’s living life
cycle and age. They are important to understand as it provides major reasons for which
customers might not purchase the product at end of responses under black box.
 Psychological Factors – Here, the customers target of buying products is depend on
beliefs, motivations, perceptions, attitude and knowledge towards the product which is
important to be analysed by the marketers (Ramya and Mohamed Ali, 2016).
Therefore black box model helps in knowing consumer behaviour decisions of specific products
by the marketers so that promotions can be done according to preferences of customers. In above
discussion, five stages of consumer buying process has been discussed that must be used here for
mapping out product purchase by customers that can be done using process of consumer decision
making. The use of business to consumer must be practised so that steps can be identified from
buyers while purchasing coffee of Tesco. Thus, following is process of taking decisions by buyer
for the purchase of coffee that includes:
Need Recognition – The consumer here will think the non availability of such product that is
used by him or her on daily basis. First, the need of product will be identified when customer see
that guest had come at home and no coffee or drink is available to offer. Secondly, while doing
hard or office work coffee or tea is required for relaxation for which buying coffee hits the mind
of buyer (Soodan and Pandey, 2016).
6

Information Search – here, buyer have decided to purchase coffee but by referring online sites
and family or friends recommendations so that quality product can be targeted. For this, buyer
collects information regarding best coffee through various sources.
Comparison – After selecting brand of coffee the prices and quality will be compared by buyer
using online method that offers home deliveries of coffee. In this, products of different retailers
will be compared by buyer so to decide the product that is liked by purchaser at end. For instance
the coffee given by Tesco or Sainsbury will be compared by reviews, price and quality.
Product Selection – By looking all alternatives Tesco’s coffee gets finalised as it carries better
prices and quality standards that can be relied by customers. Here the mode of product buying
will be decided that will be either going on store or giving online order based on urgent need of
the product (Madhavan and Kaliyaperumal, 2015).
Decision Evaluation – At last, the customer will decide about decision that has been taken for
coffee by using the product and giving reviews that will help marketers to decide whether the
product of coffee will be purchased again by that customer or not. This will help in determining
correct decision by buyer as well as marketers.
7

LO2
P3 Compare and contrast the key differences of the decision making process in the context of
B2C and B2B, providing specific examples
The marketing department of organisation consist of broad activity spectrum that carries aim of
increasing sales. So the firm’s uses B2B and B2C models of business marketing that has sales as
end result. Both the terms are used for different purpose in which one sells products to buyers
and other sells goods to business (Iankova, et.al, 2018). Therefore, the operations of Tesco go
hand in hand by business models that help in boosting sales of organisation. Following are the
differences between B2C and B2B activities of Tesco that are listed below:
Table 1: Distinctions of B2B and B2C business models
Mode of
Difference
B2B (Business to Business) B2C (Business to Consumer)
Significance The selling of products within two
business entities is determined as B2B
model in which the end customer is
certain organisation or company.
It refers to selling of products and
services to customers are known as B2C
business model in which end user is
called as customer.
Purchasing
Process
The purchases are made for using in
specific firms. The buying process by
different firms goes through complex
situation such as decision related to
business, finances, technologies and
operations that create huge impact on
purchase type (Graham and Mudambi,
2016).
The products are purchased for taking
personal use. When the person is
choosing certain product than huge list
of decision is not available as its the
personal decision of individual for
buying a product for personal use based
on day to day requirement.
8