Download - Industrial Buying Process
Supermercados Disco
1. Analyze Disco’s current performance and strategy. How well is it doing?
2. What is the nature of Disco’s competitive advantage? How transferable is this to other markets?
3. Should Disco be in international expansion? Which markets are most suitable?
4. Evaluate the potential of:a. the acquisition of Santa Isabelb. the alliance with Royal Ahold
What do you recommend?
Consumer Behavior
Culture and Buyer Behavior
Marketing and MaterialismMarketing actions are basically undertaken in the belief that
more and better goods will bring an increase in consumers’ standard of living, an increase in their satisfaction, and perhaps even more happiness
However, when anticipating customers’ reactions to new products and increased product choices, it is important to note the limits on the relationship between material affluence and personal happiness
“Money can’t buy you love.”
Consumer Behavior & Marketing
ENVIRONMENT
MARKETING
CONSUMER
STIMULI
BLACK
OUTCOMES
(4 P's)
BOX
Stimulus Organism Response
External Influences
Culture
Economics
Technology
Politics
Buyer
characteristics
“Models of Man”Product choice
Brand choice
Store choice
Supplier choice
Buyer Choices
Buyer decision process
Local Marketing
Effort
Local Buyer Behavior
• James Duesenberry - Relative Income hypothesis – consumer’s well-being is a function of how much income they have relative to their peer groups, not the actual income
• Milton Friedman – Permanent income, defined as the regularly expected income, is what determines an individual’s consumption
• Thorstein Veblen – Conspicuous consumption – the notion that people make purchases of expensive brands & products in order to display their ability to afford them
Local Buyer Behavior
•What does the product/service do for the buyer?
• How does it fit into the consumption and use pattern of the buyer?
• What are the core benefits?
• What is the perceived risk and how high is it?
The CORE BENEFIT often differs between local markets.
The generic function of a product depends more on the local environment than on innate individual preferences.
• Remember: Buyers are GOAL-ORIENTED – they buy for a reason. Point is to understand what that reason is.
Local Buyer Behavior
Problemrecognition Search
Evaluation of
alternativesChoice Outcomes
The Buyer Decision Process
The Buyer Decision Process
Problem RecognitionA problem is when an individual perceives a difference
between an ideal and an actual state of affairsNew products often lead to tension and a recognized
“problem”For the local marketer it is important to recognize that
education about the core benefits might be necessary in order to create a demand for the product
The Buyer Decision Process
SearchA consumer’s search for alternative ways to solve the
problem is closely related to his or her level of involvement with the product category
For product with which involvement is high, search tends to be more comprehensive and time consuming
For convenience and habit purchases, the decision process is shorter, with little need for extensive searches or alternative evaluations
Search intensity is dependent on the perceived availability of the alternativeOne advantage for product with high global brand awareness
is that initial distrust is easier to overcome
The Buyer Decision Process
Evaluation of AlternativesWhen a new product or service is in the “consideration set”
A highly involved individual will process the available information matching the pros and cons of the alternatives against preferences
Consumers can deal with multi-attribute evaluations in several ways:They can use gradually less-important features to successively
screen out alternatives A “hierarchical” decision rule
They can consider all features simultaneously:A “compensatory” rule – hard to do.
Multi-attribute evaluation
(ΣBI)
Preference
Behavioral intent
Choice
Social norms
Social forces
Motivation to comply Situational
factors(P-O-P)
B = beliefs about product attributes; I = importance of the beliefs; P-O-P = point of purchase
Fishbein’s Multi-attribute Model
The Buyer Decision Process
ChoiceThe final choice of which alternative to select or try is
typically influenced by social norms and by situational factors
Social NormsWhere group pressures to comply are strong social norms
influence is expected to override multiattributed evaluation The social norms can be usefully analyzed by the
extended Fishbein modelThe social norms involve two aspects
Social forcesMotivation to comply
The Buyer Decision Process
OutcomesThe main question about the outcomes revolves around the
degree of customer satisfaction.Customer satisfaction is particularly important in mature
markets where choices are many and the needs are already well met.
Satisfaction engenders loyalty to the brand and to the company.Because buying is typically a risky choice between different
brands, the marketer has to make sure that the customer does not encounter cognitive dissonance, a sense of possibly making the wrong choice.
One approach is to get satisfied customers to endorse the product, a common strategy in advertising.
A Strong Brand Simplifies the Decision Process
-- REDUCES INFORMATION SEARCH
-- REDUCES PERCEIVED RISK
-- PLACES A BRAND IN THE EVOKED CONSIDERATION SET MORE EASILY
-- BRAND LOYALTY MEANS DECISIONS GO FAST.
A GLOBAL BRAND CAN FOCUS ON:
-- ATTITUDES
-- NORMS
-- P-O-P (Point-of-Purchase Promotions)
Problem definition
Sampling
Research design
Measurement/scaling
Exploratory
Descriptive
Causal Trade surveys
Observation
Experiments
Causal Models
Secondary data
Qualitative research
Consumer surveys
Questionnaireconstruction
FieldworkData
analysis
The Local Market Research Process
Research Issues
Primary vs. Secondary DataCIA World FactBook:
http://www.cia.gov/cia/publications/factbook/
Qualitative vs. Quantitative
Survey vs. Observation
Conditions for Using Observational Techniques
10-410-4
Condition Brief DescriptionInformation Current behavior patterns must be part
of the data requirements.
Type of data Necessary data must be observable.
Time frame Data patterns must meet repetitiveness, frequency, and predictability factors in a prespecified time frame.
Setting Behavior must be observable in some type of public or laboratory setting.
Characteristics of Observational Methods
10-5a10-5a
Characteristic DescriptionDirectness of observation
The degree to which the researcher or trained observer actually observes the behavior/event as it occurs. Researchers can use either direct or indirect observation techniques.
Subjects’ awareness ofbeing observed
The degree to which subjects consciouslyknow their behavior is being observed and recorded. Researchers may use either disguised or undisguised observation techniques.
Characteristics of Observational Methods
Characteristic
Description
Structurednessof observation
The degree to which the behavior activities or events to be observed are specifically known to the researcher prior to doing the observations.
Type of observing mechanism
Basically researchers have the option either of using a trained human observer or some type of mechanical device.
SURVEY DATA & ERROR
State of the data Error type THEORETIC POPULATION | Definitional Error POPULATION OF REALITY
| Frame ErrorOPERATIONALIZED POPULATION
| Sampling ErrorSAMPLE SELECTED
| Not-At-Home ErrorSAMPLE REACHED
| Refusal ErrorSAMPLE RESPONDING
| Measurement ErrorSAMPLE MEASURED
| Statistical ErrorSTATISTICAL CONCLUSIONS
| Logic ErrorOPERATIONAL CONCLUSIONS
Understanding Industrial Buyers
The Business-to-Business (B2B) Marketing Task:The marketer should help the buying organization succeed.
Industrial Buyers are influenced by the same forces as individual consumers, but also conditioned by the organizational culture in which they operate.
The organizational culture reflects company policies and ways of making decisions.
The industrial buying process involves several stages from problem recognition to performance review.
Performance review
Order specificationOrder specification
Supplier selection
Proposal solicitation
Search for suppliers
Product specificationProduct specification
Problem recognitionProblem recognition
Industrial Buying Process
Industrial Buyers: Building Relationship
“Relationship Marketing” is important in B2B.The term is applied to a marketing effort involving
Various personalized servicesCreation of new and additional servicesCustomizing a company’s offering to the needs of a special
buyerTakes a long-term view
Since without it, the effort required to build a relationship is not worth it.
• ADOPT THE BUYER’S VIEWPOINT.
• GROW WITH THE RELATIONSHIP.
• ACCEPT AND DEMAND TRANSPARENCY.
• BE PROACTIVE.
THINGS A MARKETER CAN DO TO CREATE A WORKABLE RELATIONSHIP:
Always consider how the culture of the nation and the culture of the organization affect relationship marketing.
Relationship Marketing
EMERGING NEW GROWTH MATURE
Three Market Environments
Feature
Emerging
New growth
Mature
Life cycle stage Intro Growth Mature
Tariff barriers High Medium Low
Nontariff barriers High High Medium
Domestic competition Weak Getting stronger Strong
Foreign competitors Weak Strong Strong
Financial institutions Weak Strong Strong
Consumer markets Embryonic Strong Saturated
Industrial markets Getting stronger Strong Strong
Political risk High Medium Low
Distribution Weak Getting stronger Strong
Media advertising Weak Strong In-store promotion
Dominant Market Features
product/market situationtask emerging new growth maturemarketing analysisresearch focus feasibility economics segmentationprimary data sources visits middlemen respondentscustomer analysis needs aspirations satisfactionsegmentation base income demographics life stylemarketing strategystrategic focus market development participation in growth compete for sharecompetitive focus lead/follow domestic/foreign strengths/weaknessesproduct line low end limited wideproduct design basic advanced adaptednew product intro rare selective fastpricing affordable status valueadvertising awareness image value-addeddistribution build-up penetrate conveniencepromotion awareness trial valueservice extra desired required
Dominant Marketing Tasks