04. consumer behaviour and business market
TRANSCRIPT
THARAKA DIASMBA(USA), BBA(USA), Dip in Mgt, ACIM(UK),
FAEA(Dip in AEA-UK), FinstSMM(UK), CPM(Asia),
MSLIM
� Psychology� Sociology� Anthropology(science of humanity)� Marketing� Marketing� Economics
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� Out of 11000 new products introduced by 77 companies, only 56% are present 5 years later.
� Only 8% of new product concepts � Only 8% of new product concepts offered by 112 leading companies reached the market. Out of that 83% failed to meet marketing objectives.
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� “Please leave your values at the desk” “Please leave your values at the desk” “Please leave your values at the desk” “Please leave your values at the desk” ---- Paris hotelParis hotelParis hotelParis hotel� “Drop your trousers here for best results” “Drop your trousers here for best results” “Drop your trousers here for best results” “Drop your trousers here for best results” ----Bangkok laundryBangkok laundryBangkok laundryBangkok laundry
� “The manager has personally passed all water “The manager has personally passed all water “The manager has personally passed all water “The manager has personally passed all water served here” served here” served here” served here” ---- Acapulco restaurantAcapulco restaurantAcapulco restaurantAcapulco restaurantserved here” served here” served here” served here” ---- Acapulco restaurantAcapulco restaurantAcapulco restaurantAcapulco restaurant
� “Because of the impropriety of entertaining guests “Because of the impropriety of entertaining guests “Because of the impropriety of entertaining guests “Because of the impropriety of entertaining guests of the opposite sex in the bedroom, it is suggested of the opposite sex in the bedroom, it is suggested of the opposite sex in the bedroom, it is suggested of the opposite sex in the bedroom, it is suggested that the lobby be used for the purpose.” that the lobby be used for the purpose.” that the lobby be used for the purpose.” that the lobby be used for the purpose.” ---- Zurich Zurich Zurich Zurich hotelhotelhotelhotel
� Ladies are requested not to have children in the Ladies are requested not to have children in the Ladies are requested not to have children in the Ladies are requested not to have children in the bar.”bar.”bar.”bar.”---- Norway barNorway barNorway barNorway bar
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� “Come alive out of the grave” -Germany
� “Pepsi brings your ancestors back from the grave” - Chinafrom the grave” - China
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Consumer
4Ps Marketing
Environment
Buyer
Characteristics
Buyer
Decision Process
Buyer
Decision
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Marketing
Environment
Economic Technological Political Cultural
Environment
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� Problem Recognition� Information Search� Evaluation of Alternatives� Purchase Decision� Purchase Decision� Consumption� Postpurchase behaviour
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� Product Choice� Brand Choice� Dealer Choice� Purchase Timing� Purchase Timing� Purchase Amount
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� Family Life Cycle� Occupation and Economic circumstances
� Lifestyle� Lifestyle� Personality and self - concept
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� Motivation� Perception� Learning� Beliefs and Attitudes� Beliefs and Attitudes
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� Complex� Dissonance - Reducing� Habitual� Variety seeking� Variety seeking
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� Problem Recognition� Information Search� Evaluation Alternatives� Purchase Decision� Purchase Decision
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� Characteristics of Business Marketsof Business Markets
� Sales in the business market far exceed sales in consumer markets.
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� Characteristics of Business Markets
� Business markets differ from consumer markets in many ways.markets in many ways.
▪ Marketing structure and demand
▪ Nature of the buying unit
▪ Types of decisions and the decision process
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� Marketing Structure and
� Compared to consumer markets:� Business markets ▪ have fewer but larger
CharacteristicsCharacteristics
Structure and Demand
� Nature of the Buying Unit
� Types of Decisions and the Decision Process
▪ have fewer but larger customers
� Business customers ▪ are concentrated geographically
� Demand is different▪ Derived demand
▪ Price inelastic
▪ Fluctuates more, and changes more quickly
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� Marketing Structure and
� Compared to consumer purchases:
Business purchases
CharacteristicsCharacteristics
Structure and Demand
� Nature of the Buying Unit
� Types of Decisions and the Decision Process
� Business purchases involve more buyers in the decision process.
� Purchasing efforts are undertaken by professional buyers.
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� Marketing Structure and
� In comparison to consumer purchases:� Business buyers face
CharacteristicsCharacteristics
Structure and Demand
� Nature of the Buying Unit
� Types of Decisions and the Decision Process
� Business buyers face more complex buying decisions.
� The buying process is more formalized.
� Buyers and sellers work together closely and build long-term relationships.
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Model of Business Model of Business Model of Business Model of Business
Buyer BehaviorBuyer BehaviorBuyer BehaviorBuyer Behavior
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� Major Types of Buying Situations� Straight rebuy
▪ Reordering without ▪ Reordering without modification
� Modified rebuy
▪ Requires modification to prior purchase
� New task
▪ First time purchase
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� Systems Selling:
� Buying a packaged solution to a problem from a single seller.from a single seller.
▪ Convenience is a major benefit
� Often a key marketing strategy for businesses seeking to win and hold accounts.
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Participants in the Participants in the Participants in the Participants in the Participants in the Participants in the Participants in the Participants in the
Buying Decision ProcessBuying Decision ProcessBuying Decision ProcessBuying Decision ProcessBuying Decision ProcessBuying Decision ProcessBuying Decision ProcessBuying Decision Process
UsersUsersUsersUsersUsersUsersUsersUsers
BuyersBuyersBuyersBuyersBuyersBuyersBuyersBuyers
InfluencersInfluencersInfluencersInfluencersInfluencersInfluencersInfluencersInfluencers
DecidersDecidersDecidersDecidersDecidersDecidersDecidersDeciders
GatekeepersGatekeepersGatekeepersGatekeepersGatekeepersGatekeepersGatekeepersGatekeepers
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Emotions also play a role in business buying.
Volvo stresses that the trucks’ benefits will
make “drivers a lot more possessive”.
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Major Influences on Major Influences on Major Influences on Major Influences on
Business Buyer BehaviorBusiness Buyer BehaviorBusiness Buyer BehaviorBusiness Buyer Behavior
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�
� Economic trends� Supply conditions� Technological change
Key FactorsKey Factors
�
Environmental� Organizational
� Interpersonal� Individual
� Technological change� Regulatory and political environments
� Competitive developments
� Culture and customs
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Environmental
� Objectives� PoliciesProcedures
Key FactorsKey Factors
� Environmental� Organizational� Interpersonal� Individual
Policies� Procedures� Organizational structure
� Systems
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� Authority� Status� Empathy
Key FactorsKey Factors
� Environmental� Organizational� Interpersonal� Individual
� Empathy� Persuasiveness
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� Authority� AgeEducation
Key FactorsKey Factors
� Environmental� Organizational� Interpersonal� Individual
Age� Education� Job position� Personality� Risk attitudes
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Stages of the Stages of the Stages of the Stages of the
Business Buying ProcessBusiness Buying ProcessBusiness Buying ProcessBusiness Buying Process
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� Eight Stages:
� Stage 1: Problem RecognitionRecognition
� Stage 2: General Need Description
� Stage 3: Product Specification
▪ Value analysis helps to reduce costs
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� Eight Stages:
� Stage 4:Supplier Search
� Stage 4:Supplier Search
▪ Supplier development
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� Eight Stages:
� Stage 6: Supplier Selection
Stage 7: Order-Routine � Stage 7: Order-Routine Specification
▪ Blanket contracts are often used for maintenance, repair and operating items.
� Stage 8: Performance Review
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� Business Buying on the Internet� E-procurement is growing rapidly.� E-procurement is growing rapidly.
� Reverse auctions account for much of the online purchasing activity.
� E-procurement offers many benefits:
▪ Access to new suppliers
▪ Lower purchasing costs
▪ Quicker order processing and delivery47AOT - www.tharakadias.com
� The Background:Institutional markets are often overlooked in B2B marketing
� The Potential: This
Institutional Markets Institutional Markets Institutional Markets Institutional Markets
� The Potential: This market is somewhat recession-resistant; great target for hard economic times
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� Timing is Important:. For example, August is a good month for schools, but often a poor time for other
Institutional Markets Institutional Markets Institutional Markets Institutional Markets
poor time for other institutions due to worker vacations.
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� Government Markets
� Most firms that sell to government buyers are not marketing-oriented.buyers are not marketing-oriented.
� Some companies have separate government marketing departments.
� Much of government buying has migrated online.
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