Analyzing

Consumer Markets

6-2

What Influences Consumer Behavior?

Cultural factors Social factors Personal factors

6-3

Culture

The fundamental determinant of a person’s wants and behaviors

acquired through socializationprocesses with family

and other key institutions.

6-4

Subcultures

Nationalities Religions Racial groups Geographic regions Special interests

6-5

Social Classes

Upper uppersLower uppersUpper middlesMiddle class

Working classUpper lowersLower lowers

6-6

Characteristics of Social Classes

Within a class, people tend to behave alike.

Social class conveys perceptions of inferior or superior position.

Class may be indicated by a cluster of variables (occupation, income, wealth).

Class designation is mobile over time.

6-7

Social Factors

Referencegroups

Social roles

Statuses

Family

6-8

Reference Groups

Membership Primary Secondary Aspirational Dissociative

6-9

Family

Family of OrientationReligionPoliticsEconomics

Family of ProcreationEveryday buying behavior

6-10

Personal Factors

Age Life cycle stage Occupation Wealth

Personality Values Lifestyle Self-concept

6-11

Brand Personality

Sincerity Excitement Competence Sophistication Ruggedness

6-12

Key Psychological Processes

Motivation Perception Learning Memory

6-13

Motivation

Freud’s theory Maslow’s hierarchy of needs Herzberg’s two-factor theory

6-14

Perception

Selective attention Selective retention Selective distortion Subliminal perception

6-15

Consumer Buying Process

Problem recognition Information search Evaluation Purchase decision Postpurchase behavior

6-16

Sources of Information

Personal Commercial Public Experiential

6-17

Organizational Buying

Decision-making process by whichformal organizations establish theneed for purchased products and

services, and identifyevaluate, and choose among

alternative brands and suppliers.

6-18

Characteristics of Business Markets Fewer, larger buyers Close supplier-

customer relationships Professional

purchasing Many buying influences Multiple sales calls

Derived demand Inelastic demand Fluctuating demand Geographically

concentrated buyers Direct purchasing

6-19

Buying Situation

Straight rebuy Modified rebuy New task

6-20

The Buying Center

Initiators Users Influencers Deciders Approvers Buyers Gatekeepers

6-21

Of Concern to Business Marketers

Who are the major decision participants? What decisions do they influence? What is their level of influence? What evaluation criteria do they use?

6-22

Types of Business Customers

Price-oriented Solution-oriented

Gold-standard Strategic-value

6-23

Handling Price-Oriented Customers

Limit quantity purchased Allow no refunds Make no adjustments Provide no services

6-24

Purchasing Orientations

Buying Procurement Supply chain management

6-25

Product-Related Purchasing Processes

Routine products Leverage products Strategic products Bottleneck products

6-26

Methods of e-Procurement

Websites organized using vertical hubs Websites organized using functional hubs Direct extranet links to major suppliers Buying alliances Company buying sites

6-27

Forms of Electronic Marketplaces

Catalog sites Vertical markets Pure play auction sites Spot markets Private exchanges Barter markets Buying alliances

6-28

Assessing Customer Value

Internal engineering assessment

Field value-in-use assessment

Focus-group value assessment

Direct survey questions

Conjoint analysis Benchmarks Compositional

approach Importance ratings

6-29

Order Routine Specification and Inventory Stockless purchase plans Vendor-managed inventory Continuous replenishment

6-30

Desirable Outcomes of a B2B transaction: OTIFNE

On time In full No error

6-31

Establishing Corporate Credibility

Expertise Trustworthiness Likeability

6-32

Factors Affecting Buyer-Supplier Relationships Availability of alternatives Importance of supply Complexity of supply Supply market dynamism

6-33

Categories of Buyer-Seller Relationships

Basic buying and selling

Bare bones Contractual

transaction Customer supply

Cooperative systems Collaborative Mutually adaptive Customer is king

6-34

Opportunism

Some form of cheating orundersupply relative to animplicit or explicit contract.

Analyzing Business Markets

6-36

CISCO Targets Businesses

6-37

What is Organizational Buying?

Organizational buying refers to the decision-making process by which formal organizations establish the need

for purchased products and services, and identify, evaluate, and choose among alternative brands and suppliers.

6-38

Top Business Marketing Challenges Expand understanding of customer needs Compete globally as China and India reshape

markets Master analytical tools and improve quantitative

skills Reinstate innovation as an engine of growth Create new organizational models and linkages

6-39

Characteristics of Business Markets Fewer, larger buyers Close supplier-

customer relationships

Professional purchasing

Many buying influences

Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically

concentrated buyers Direct purchasing

6-40

Buying Situation

Straight rebuyStraight rebuy

Modified rebuyModified rebuy

New taskNew task

6-41

Systems Buying and Selling

Turnkey solution desired;

bids solicited

Primecontractors

Second-tiercontractors

System subcomponents

assembled

6-42

The Buying CenterInitiatorsInitiators

UsersUsers

InfluencersInfluencers

DecidersDeciders

ApproversApprovers

BuyersBuyers

GatekeepersGatekeepers

6-43

Of Concern to Business Marketers Who are the major decision participants? What decisions do they influence? What is their level of influence? What evaluation criteria do they use?

6-44

Sales Strategies

Small Sellers

Large Sellers

Key Buying Influencers

MultilevelIn-depthSelling

6-45

Stages in the Buying Process: Buyphases Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order-routine specification Performance review

6-46

Forms of Electronic Marketplaces

6-47

Methods of e-Procurement

Websites organized using vertical hubs Websites organized using functional hubs Direct extranet links to major suppliers Buying alliances Company buying sites

6-48

Handling Price-Oriented Customers

Limit quantity purchasedLimit quantity purchased

Allow no refundsAllow no refunds

Make no adjustmentsMake no adjustments

Provide no servicesProvide no services

6-49

Methods for Researching Customer Value

Internal engineering assessment

Field value-in-use assessment

Focus-group value assessment

Direct survey questions

Conjoint analysis Benchmarks Compositional

approach Importance ratings

6-50

Order Routine Specification

Stockless purchase plans

Vendor-managedinventory

Continuous replenishment

6-51

Establishing Corporate Trust and Credibility

Expertise

LikeabilityTrustworthiness

6-52

Factors Affecting Buyer-Supplier Relationships

Availability of alternatives

Supply marketdynamism

Complexity ofsupply

Importance ofsupply

6-53

Categories of Buyer-Seller Relationships

Basic buying and selling

Bare bones Contractual

transaction Customer supply

Cooperative systems Collaborative Mutually adaptive Customer is king

6-54

What is Opportunism?

Opportunism is some form of cheating or undersupply relative to an

implicit or explicit contract.

6-55

Marketing of Farm Output from Rural Areas Contract Farming – Pepsi Procuring from Cooperatives – Amul Use ICT for procurement – ITC