CONSUMER AND BUSINESS MARKETING

Consumer MarketConsumer behavior?

The study of how individuals, groups, and organizations, select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants

Model of Consumer Behavior

What Influences Consumer? A consumer’s buying behavior is influenced by cultural, social, and

personal factors + psychological factors

Cultural factors The broadest, deepest influence and fundamental determinant Culture, subculture, and social class Subcultures include nationalities, religions, racial groups, and

geographic regions multicultural marketing Social classes : Consumer are hierarchically ordered and members share

similar values, interests, and behavior. Social classes differ in brand, language and media preferences

Social factors

Reference groups, family, and social roles and statuses affect buying behavior.

Marketers must determine how to reach and influence the group’s opinion leaders.

Family is the most important consumer-buying organization in society, and family members constitute the most influential primary reference group.

Personal factors

Age and stage in the life cycle Occupation and economic circumstances Personality and self-concept Lifestyle and values.

Marketers need to search for relationships between their products and lifestyle groups.

Psychological factorsSelective attention People notice stimuli whose deviations are large in relation to the normal

size of the stimuli. Marketers attempt to bypass selective attention filters. Consumer influenced by unexpected stimuli, such as sudden offers in the

mail, over the phone, or from a salesperson

Learning Marketers that they can build demand for a product Enter the market by appealing to the same drives that competitors use

and by providing similar cue configurations, because buyers are more likely to transfer loyalty to similar brand.

Consumer Buying Process

What could the manufacturer do in order to stimulate interest in the brand?

Redesign Alter belief about the brand Alter beliefs about competitors’ brands Alter the importance weights Attention to neglected attributes

How consumer influences marketing decision?

• Business marketing also referred to as “Industrial marketing” or “B2B marketing” or “Organizational marketing”.

• Business marketing is the marketing of products & services to business organizations.

• Business organizations include:Manufacturing companiesGovt. undertakingsPrivate sector organizationsEducational institutionsHospitalsDistributors / Dealers

What is Business Marketing?

Business organizations buy products & services to satisfy many objectives like production of other goods & services, making profits, reducing costs, & so on.

Consumer marketing is the marketing of products & services to individuals, families, & households. The consumers buy products & services for their own consumption.

• There are fewer but larger buyers in a business market compared to a customer market.

• Suppliers and customers share a close and sometimes mutually beneficial relationship.

• Business purchasing follows a strict and professional procedure set up by the organization’s trained purchasing agents.

• The demand for business goods is derived from consumer demand and is inelastic and fluctuating.

What is Business Marketing?

THE ANALYSIS - BENEFITS OF B2B

• BUSINESSES CAN BENEFIT FROM MASS PRODUCTION AND ADVERTISING TO GAIN A MORE PROPORTIONATE INCREASE IN MARKET SHARE WITH AN INCREASE IN SPENDING.

• TO OVERCOME HIGH BARRIERS ENTRY, A COMPANY MAY FROM A RELATIONSHIP WITH ANOTHER COMPANY THAT IS ALREADY IN THE INDUSTRY.

• TO BENEFIT FROM LOW COSTS OF REPRODUCING PRODUCTS OR INFORMATION, A COMPANY MAY PROVIDE THE SAME OFFERING TO MULTIPLE CLIENTS.

THE ANALYSIS - RISK OF B2B• THE TREAT TO SPECIFIC INVESTMENT – EXPENDITURES TAILORED TO A

PARTICULAR COMPANY – COULD INCREASE.

• SENSITIVE INFORMATION ABOUT THE COMPANY MAY HAVE TO BE SHARED.

• THERE COULD BE DELAYS IN FUTURE CONTRACTS DUE TO DIFFICULTIES IN REALLOCATING RESOURCES, AND ISSUES WITH INTELLECTUAL PROPERTY RIGHTS.

THE ANALYSIS - OPPORTUNITY OF B2B

• IT IS THE UNDER SUPPLY OR LOWERING OF STANDARDS RELATIVE TO TERMS IN A CONTRACTUAL AGREEMENT.

• IT IS MORE PROBABLE WHEN SUPPLIER PERFORMANCE IS NOT EASILY MONITORED.

THE ANALYSIS - NEW TECHNOLOGIES APPROACH IN B2B

• BUSINESSES LAUNCH WEBINARS AND PODCASTS, ENGAGE IN SOCIAL MEDIA AND LEVERAGE EMAILS TO IMPROVE THEIR BUSINESS PERFORMANCE.

RELATIONSHIP BETWEEN KEIRETSU (COLLABORATE) AND CHAEBOL (CLIQUE)• THE JAPANESE KEIRETSU AND KOREAN CHAEBOL PRACTICE SIGNIFICANT VERTICAL

INTEGRATION OF SUPPLIERS AND BUYERS.

• SUBCONTRACTORS ARE AIDED BY EXTENSIVE SUPPORT DURING THE PRODUCTION

PROCESS, WHEREAS THE MANUFACTURER BENEFITS FROM HIGHER QUALITY AND LOWER

CLASS.

• COMPANIES PRACTICE BUYING BY EXTENSION, WHERE CODEPENDENT COMPANIES

PURCHASE FROM THE SAME SUPPLIER.

• DUE TO LOSS OF INFLUENCE OF THE KEIRETSU MODEL OF LATE, COMPANIES ARE NOW

SEEKING NEW SUPPLIER RELATIONSHIP.

RELATIONSHIP BETWEEN KEIRETSU AND CHAEBOL

RELATIONSHIP BETWEEN KEIRETSU AND CHAEBOL

B2B Marketing vs. Consumer MarketingAreas Industrial Markets Consumer Markets1. Market characteristics • Geographically

concentrated• Relatively fewer buyers

• Geographically distributed• Mass markets

2. Product characteristics

• Technical complexity• Customized

• Standardized

3. Service characteristics

• Service, timely delivery & availability is very important

• Service, timely delivery & availability is somewhat important

4. Buying behavior • Involvement of various functional areas in both buyer & supplier firms• Purchase decisions are mainly made on rational/performance basis•Technical expertise• Stable interpersonal relationship between buyers & sellers

• Involvement of family members

• Purchase decisions are mostly made on physiological / social / psychological needs• Less technical expertise• Non-personal relationship

B2B Marketing vs. Consumer Marketing

Areas Industrial Markets Consumer Markets5. Channel characteristics

• More direct• Fewer intermediaries

• Indirect• Multiple layers of intermediaries

6. Promotional characteristics

• Emphasis on personal selling

• Emphasis on advertising

7. Price characteristics • Competitive bidding & negotiated prices• List prices for standard products

• List prices or maximum retail price (MRP)