WEEK 24

BUSINESS BUYER BEHAVIOUR

In business to business marketing there are alot of different kinds of organisations involved like goverment organisations for example policing, health, education, transport e.t.c. In stitutional organisation for example not for profit, community based organisation e.t.c. Commercial organisation for example distributers, original equipment manufacturers, users or retailers.

At the most basic level, marketers want to know how business buyers will respond to various marketing stimili. As with consumer buying the marketing stimili for business buying consists of the four p's: Product, place, price and promotion. Other stimuli consists of major forces in the environment: economic, technological, political, cultural and competitive.These stimuli enter the organisation and are turned into buyer responses: product or service choice, supplier choice, order quantity, delivery service and payment terms. In order to design good marketing mix strategies, the marketers must understand what happens within the organisation to turn stimuli into responses.

Looking at the following website:

http://www.b2bm.biz/

It has an article about big brands such as Dell, Hertz and PC world have signed up to a business cash back website companycashback.com, it is viewed as a golden sales opportunity by larger firms targeting this market.

This kind of merges are part of the business buyer behaviour as it is a business doing marketing through another business organisation.

Within the organisation buying activity consists of two major parts the buyer centre which is all the people involved in the buying decision, and the buying decision process. The buying centre and the buying decision process are both influenced by internal organisational, interpersonal and individual factors as well as by external environmental factors.

Looking at a case study about real marketing regarding the company called IKEA which is the worlds largest furniture retailer. It shows that last year it had 410 million customers throughout the scandinavian retailers 236 huge stors in 34 countries. They generated more than $18bn in sales which shows that they had a potentially huge order value. Looking at another organisation which is the MRI scanner manufacturer, they have very few customers one of which is the NHS, but they potentially have a huge order value of £825,000. As the MRI scanner manufacturer has fewer clients they cannot afford to loose any. And looking at the sales it shows that there is alot of money and risk at stake they need to be able to built trust with their clients. To do this they need to know how they will achieve this, how they will advertise, make sure they have face to face communication and also have sales promotions. All this is part of the customer relationship management.

Geographically concentrated buyers may need to consider their marketing as their customers may know each other and communicate regularly which means their recomendations to each other may influence the others buyer behaviour. This king of buyer behaviour is also affected as they may live close to each other.

Companies do not buy on impulse.

Most companies have a purchasing policy involving many steps or stages.

Looking at this diagram it shows how this process works:

-Need recognition and problem awareness

-Information search

-Evaluation of alternatives

-Purchase

-Post purchase

WEEK 23

CULTURE

Culture is the 'prism' through which people view products and try to make sense of their own and other peoples consumer behaviour. Culture is a concept crucial to the understanding of consumer behaviourCulture is a mix of shared meanings, rituals, norms and traditions amoung a organisation or society.It is something that defines the human community, their individuals, the social organizations as well as the economic and political systems.

Culture is built up on the following:

-Peoples perceptions of what is right or wrong

-Family values

-Societies values and attitudes

-community learning

-communal or collective memory

Ralph Linton (1945): 'A culture is the configuration of learned behaviour and results of behaviour whose component elements are shared and transmitted by members of a particular society'.

Culture includes both abstract ideas such as values and ethics and the material objects and services like, cars, clothing, food, art and sports that are produced or valued by a group of people. Even though individual consumers and groups of consumers are part of culture, culture is the overall system of other systems organized.

Up until today researchers treated culture as a sort of variable that would explain the differences they saw as a central dimension in society which is economic behaviour. Today the industrial society has become very aware that the principles of economy are themselves a kind of culture. Culture is represented as the skin of an onion just like it is represented in the diagram below.

According to wikipedia culture is a term that has different meanings. However the word 'culture' is most commonly used in three basic senses: - Taste in the fine arts and humanities also known as high culture. - A mix pattern of human knowledge, belief, and behaviour that depends upon the capacity for symbolic thought and social learning. - The set of shared attitudes, values, goals and practices that characterizes and institution, organization or group. http://en.wikipedia.org/wiki/Culture

The effects of culture on consumer behaviour are so powerful and people are surrounded by many practices from many significant behaviours like pressing the start button on our walkman to larger behaviours like flying to a different country for a honeymoon. The important thing is that these practices have meaning to us.

Culture is made up of three essential components:
(1) Beliefs- Mental and verbal processes that reflect our knowledge and assessment of products and services.

(2) Values- Indicators consumers use as guides for what is appropriate behaviour, they tend to be relatively enduring and stable.

(3) Custom- overt modes of behaviour, that constitute culturally approved or acceptable ways of behaving in specific situations.
A consumers culture determines the overall priorities he or she attatches to different activities or products. It also determines the success or failure of specific products services. A products that has benefits for the ones that are desired by members of a culture have a better chance of being accepted in the market place.

The relationship between culture and consumer behaviour is a two way street. On one hand products and services with benefits to culture groups have a better chance of being accepted by the consumers. On the other hand The new products designed successfully by a culture at any point provides a window on the dominant cultural ideas of that period.

Aspects of culture

A cultural system can be said to consist of three functional areas:
-Ecology: This area is shaped by the technology used to obtain the distribute resources.

- Social structure: This area includes the domestic and political groups that are dominant within the culture.

- Ideology: This area revolves around the belief that members of a society possess a common Worldview. They share ideas about principles of order and fairness.

Rules for behaviour

Values are very general principles for judging between good and bad goals. They form the core principles of every culture (norm). Crescive norms include the following:

- A custom is a norm handed down by the past that controls basic behaviour like a division of labour in a household.

-Mores are customs with a strong moral overtone. Mores often involve a taboo or forbidden behaviour such as cannibalism.

-Conventions are norms regarding the conduct of everyday life. These rules deal with the subleties of consumer behaviour, including the 'correct' way to furnish ones house, wear ones clothes, host dinner parties and so on.

WEEK 22

SOCIAL CLASS AND PURCHASE BEHAVIOUR

There are factors that influence peoples behaviour that have been founded by Kotler et al. It may start from cultural to social, social to personal, personal to psychological and from psychological to the buyer.
All societies can roughly be divided into different categories. Looking at socio equality it has been shown that some people seem to be more equal than others. David encounters with the Caldwells suggestion that a consumers standing in society or social class, is managed by a complex set of variables including income, family background and occupation.

Until the 1980's the concept of social class was almost seen as central to sociological study, especially in the UK. This is a two way structure working on both the social structure and the individual. On a structural level the organisation may lead to it being experienced by other organisations whilst on an individual basis it leads the individual to understand themselves and to ally themselves with the people that share their position and interest.
If you look at the following website there is a lot more information about social class by Kath Mcguire.
http://www.ucel.ac.uk/shield/docs/notes_class.pdf

Social class is an 'umbrella' category. By being in a different class there may be many differences in culture, economic circumstances, educational status, dietary preferences, housing conditions, property ownerships and power. It may always be very confusing for people who do not belong to one class or either keep moving from one class to another.
Looking at this diagram, it is not very clear but it shows the rates of peoples social class in the United states. In 1979 a research carried out showed that a persons future is not dependant on brains but social status. Looking at two boys jimmy and bobby. Bobby is the son of a experienced lawyer he may have more chances of ending up with a job that will pay him a good income, one in the highest ten numbers whilst jimmy will have that chance one in eight times. The centre of American progress stated that between 1979 to 2007 the average income of the bottom 50 percent of american households grew by 6%, the top 1% of people saw their income increase by 229%.

Social class is measured using grades:

A - upper middle class

B - middle class

C1 - lower middle class

C2 - skilled working class

D - working class

E - lower class

Income is rising now a days due to the increase in women working and graduates.
Social class is not based on any dual incomes it is based on the head of the households income.
Income is a better indicator of purchase behaviour of non symbolic items for example freezers. Social class and income are both needed to predict the consumers behaviour when it comes to expensive items like cars or homes.

Marketers put societies into groups for segmentation purposes. Some of these divisions involve political power, while others revolve around purely economic distinctions.
The term 'social class' is now used more generally to describe the overall rank of people in a society. People that are put into the same groups have the same social standing in the community. They may roughly work in similar industries or may have similar occupations. They may also have similar lifestyles and tastes. These people mainly socialize together and may have the same values and ideas.

WEEK 20

PESTER POWER

Children have a big influence in alot of family aspects now a days. Looking at the kids grow older younger it shows how children do get teased by not having the right brand with the things they may use or wear. They are very aware of the poppular brands coming out and as they grow they have more influence on how they think and what they want. In the marketing world the Marketing companies are probing very deep in understanding parents and children to better understand their needs. With some motherswho are independant or in most cases single mothers, they want their kids to grow up. Where as with aggressive mothers they want to protect their kids and that is why marketers will advertise independant kids in order to attract aggressive mothers. Take for example if marketers show clever kids using the internet then most parents will sign up for the internet.
Mass Marketing which is also known as mass demand creates more jobs. The downside to this is that children get more aware of these brands and want more. Kids have a massive influence on parents shopping behaviour as they grow older they have more demands and that affects what parents are buying for the household. Having looked at some families it shows that boys have more demands of brands that girls when it comes to clothing.

Looking at pocket money, kids may use strategies to get what they want at times for example they may offer to give in most of their pocket money when they want something parents don't agree to, this is because they know that it won't happen and they will end up getting both. Parents main priorities have become the wants and needs of their children. Children are now adapting to adult lifestyles which makes them want to spend their money on what they want. The amount of pocket money given to children has dropped alot recently. Due to the increase in healthy lifestyle the sale of things like crisps have dropped alot together with the amount of sales being made on them. As the new economy is growing it is changing childrens expense together with it. There is alot of difference in what younger children may want and what older children may want. Older children are more interested in brands and things like computers, playstation e.t.c. Where as younger children are more interested in wanting electronic toys and not just the batman or power rangers teddies kids may want electronic dolls or cars with wireless remotes.

Looking at Piagets child developement theory it states that children cannot be known as little adults until they reach the age of 15. This is according to Jean Piaget who is a developemental biologist who devoted his life to closely observe, infants, children and adults.
The plan that has been put in place by Piaget is mostly connected to brain developement. He states that the human brain is not completely developed until the late adolescence and in the case of males it may be early adulthood. Parents need to know that when their children are developing they will see a lot of changes in their behaviour and parents need to be realistic with what they expect from their children.

The Piagets stages of cognitive development

1- SENSORY MOTOR PERIOD (0-24 Months) - In this stage kids start to sense things where they move hands or legs to sensing things, moving things around and trying to explain through doing things like moving objects.

2- THE PREOPERATIONAL PERIOD (2-7 Years) - In this stage kids start to use verbal language and can sense objects without them being infront of them. Language developes through this stage and get a bit more clearer but not completely. They may still tend to focus on one object and ignoring the rest.

3- PERIOD OF CONCRETE OPERATIONS (7-11 Years) - In this stage they may have organized and logical thinking, they may be capable of dealing with more than one object and may also be capable of problem solving.

4- PERIOD OF FORMAL OPERATIONS (11-15 Years) - In this stage thinking becomes more formal and one does not have to put in alot of effort in thinking. Can handle algebra, manupilations and other processes as well.

Here is an interesting video about children developement.

Pester Power has been defined by the director general of the advertising association as 'a pejorative term for children making requests of their parents' (Brown 2004).

Advertisers who target children through their marketing promotions can cause arguments between children and parents which can mostly result in purchases against parents judgement. Advertisers also promt purchases of things that are not good for children but they insist on having.

Pester power is assumed to work by the influence that they have over purchasing through someone else. There is a confusion between childlike adults and sophisticated children in major markets like music and games. One of the main reason for this is the involvement of parents in buying their kids these products as most of them cannot be purchased by underaged children. This is a basic mechanism of pester power. Children tend to have influence on things like leisure, cinemas and holidays. According to some researchers after looking at thomas cook, children have different priorities that parents but they may have most influence on the type of holiday where as the parents may focus more on the hotel and flight informations, But overall kids do have the influence on these purchases. Looking at another study it shows that children normally like to socialize their parents into eating healthy food habits learned at school. In most studies it shows that consumers think that pester power is a very uncomfortable reality and causes problems in their family. Children and parents are targeted everyday by marketing companies. Children get attracted to the products and nag their parents again and again until they end up buying the product even when they do not want to. It is all about the purchase behaviour in most cases than it is about money. Looking at some studies it shows that parents from middle class families tend to say i buy them what they want rather than parents from a higher classed family.

This is also a video i found which shows how much influence kids have looking at what their parents do and try to copy them and develope into more adult likely.

WEEK 18

THE FAMILY

It is said that purchase behaviour is influenced by the nature of an individuals family. People come from different families and that influences on the way they purchase a product.
Children have become a very important part of purchasing products as parents are influenced by their kids on what they purchase. A study showed that one third of parents have changed their shopping habits after listening to the comments by their children. Most companies are becoming aware of young peoples influence in everyday family buying decisions and most companies are trying to persuade them that their products are environmentally friendly. In most cases there is more that one individual involved in making a decision, for example if a family decides to buy a pet, children may be the ones to persuade their parents to buy a cat or dog, but the parents would be responsible for which breed to buy and then the whole family would choose which one. Soon that pet also becomes part of the family. This would also be part of a purchasing influence as when the family would go shopping their shopping habits may change as to buying pet food as well.

There are diffent types of families like:

1. Nuclear family- this is where the parents and children live together.

2. Extended family- This is where the nuclear family and other relatives for example aunty's or grand parents may live together.

3. Family of orientation- this is the family a person is born into.

4. Family of procreation- this is a family a person finds through marriage.

It is possible that there may be changes in the family structures these can be caused by many reasons. Increasing number of births out of marriage, step families, one parent families e.t.c.


Looking at one person families they have less problems with things like the central heating and bath/shower. These include pensioners and non- pensioners. Research shows that most of the one person households do not even have central heatings at all.




There is a very interesting video on the you tube website about how the family social class and structure is changing in the united states. The video link is:
www.youtube.com/watch?v=F0Oqeov0Gcw


Looking at demographic classes it is said that a womans life expectancy is 78 years of age while mens is 73. More that 50% of women over the age of 65 now live on their own and looking at the divorces 1 in 3 people are now having a divorce. The video below is the one we had a look at in class at the main reason that people are now having a divorce.


It is funny looking at one of the main reasons for people having a divorce but it is the reality that people now have divorces for silly reasons at times.
The average age that people get married has also increased alot. For men from 26 years of age to more that 30 years of age now. Looking at the women it has been an increase for 23 years to 28 years now. The proprotion of divorces is estimated to be 15 percent for the people that entered marriages in 1960, while people that entered a marriage recently in 1980 has doubled to 29 percent. There are other countries apart from the EU that have a high rate of divorce like there is a divorce rate of 40% in countries like Finland, Sweden, Denmark and the United Kingdom.
The employement rate in the EU had increased alot. Looking at the employement rate of 62.2% in 2000, which increased in 2005 to 63.4% and rose again to 64.4% in 2006. The employment rates for women have also increased. One quater of married women now work more that 30 hours a week. It increased from 56% in 2000 going up in 2005 to 53.7% and 57.2% in 2006.
Having a look at the following link, which we had a look at in lectures: ortal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PREREL_YEAR_2007/PGE_CAT_PREREL_YEAR_2007_MONTH_07/3-20072007-EN-AP.PDF
It shows that the longest working hours were in Austria and the United Kingdom. Full time employees normally worked 40.5 hours a week in the EU ,where as the united kingdom and austri were 42.4 hours a week. Netherlands was 38.9, Belgium was 39.0, latvia 42.2, Solvenia was 41.4 and France was 39.1 together with Finland with 39.2 hours.

From both a sociological and statistical perspective family is hard to nail down. One thing is certain that the concept of family will continue to exost in the future and manifest itself in varying forms and accross many countries throughout Europe.
After some research done by experts it is shown that as the idea of traditional family has been declined people are now placing greater impact on the role of close friends, siblings and other relatives to to have companionship and support. In the US people are also joining family groups of strangers and meet regularly for holidays and meals.
At a time there was only one acceptable way of families to live, get married, have kids and that is it nothing beyond. Now in the 21st century people have now opened their eyes and cleaned the wax from their ears. In the 21st century people now have broader minds and there is much broader categories where you have, single parents, step families, teenage mothers e.t.c.
Look at the website below for more information:
http://www.channel4.com/health/microsites/F/family/21st/index.html
The family life cycle

This is a way of segmenting the family market at different stages of the life cycle. The family life cycle have different stages to it. Starting from the bachelor stage to the solitary survivor 2 stage.

-Bachelors are young single people living on their own. They have a low income but a high discreationary income. Have few financial burdens but are fashion and opinion leaders.

-Newly married couples are young with no children, better off financially now than they will be in the coming future and high income but will have high mortgage commitments as well.

-Full nest 1 are the youngest children under the age of 6. Child dominated household, spending is dominated by childrens needs and they have a low income but higher debts.

-Full nest 2 are the youngest children aged 6 or over. Thei income is improving, still child dominated household, childrens needs have a considerable influence on household shopping and improvement in financial position.

-Full nest 3 are older married couples with dependent children. Older children may be at work and others in full time or higher education. Their financial position is better and they have an school and exam dominated household.

-Empty nest 1 are the older married couple but with no children at home, but the head of family still at work. Their income is the highest with low expenses and they may be interested in travel and self education.

-Empty nest 2 are older married couple, with no children at home and the head of household is retired. They may have a sugnifant cut in income, have a concern with the pension levels and income levels. Spendings on hobbies and past times. Buy medicals.

-Solitary survivor 1 are widow/widower but still in labour force. Income is alright but tend to sell bigger house to a smaller house and their concern may be the level of savings and pensions.

-Solitary survivor 2 are widow/widower but retired. There may be a signifant cut in income, additional medical requirements and special needs for affection and attention and may seek sheltered accommodation.

WEEK 17

GENERATIONAL MARKETING

Generational marketing is the different methods to market to specific generations. Doing this affects the way we may promote or sell the products. Every generation has different things about them like they may have different charecteristics. That is why when promoting a product to a specific generation we do it according to how they may speak or act.

There are a couple of different generations and the are known as:

1. Millenials or generational 2001ers- these are the people that are born after the 1980's

2. Baby busters or generation Xers- these are the ones born between 1965 to 1980

3. Baby boomers- these are the ones born between 1946 to 1964

4. Mature citizens- these are the ones born between 1909 and 1945

In order to promote to specific generations effectively you need to catch their attention which things that will reason with them. Generational lifestyles and social values have a major influence on the purchasing of products and services. To succeed in generational marketing you must understand the what motivates them and also understand their generation values.

As every generation passes through the same life cycle from childhood to old age as these generations find their place in the society the marketing agencies need to acknowledge this very quickly so that they can build their brand loyalty which will stay with them for the rest of their loves.

Age subcultures is where a persons age may influence their habits or spending habits.

When people grow they share a cultural bond with the rest that are born at the same time and as they grow their needs and preferences change and match to those of the same age as them.


Age cohorts is a group of people of the similar age gone through similar experiences. Marketers mostly target people from one or more age cohorts. They realize that the age offering would not appeal to people form different age groups nor will the language or images they use.

Now i will present to you specifics and charectaristics of one specific generation:

Baby busters- generation X'

The cohort of consumers between the age of 19 to 29 includes over 30 million europeans who will be a powerful force in the coming years. This group has been labelled as the generation X or the busters as they were affected by the economic downturn in the first part of the 1990's. So called baby busters include many people from in or out of education, whos priorities are beginning to include fashion, poppular Culture, Politics and Marketing.

Even though the the income of this age cohort is below expectations they still produce a formidable market segmentbecause many of them still live at home and and have more discreationary income.Busters in their twenties are estimated to have an annual spending of $125 billion and most of their purchases consist of products like beers, fast food and cosmetics.

Because these busters have been doing the house shopping for many years Marketing agencies find that these people are most sophisticated about advertising and evaluating products.They see advertising as a form of entertainment and are put of by overcommercialization. As a good Marketer you need to let them know that you know who they are, understand their values and you need to make them feel comfortable about it.

This is a video of a news advert as known the baby busters is the generation that may be most likely to read or watch the nes but this advert is entertaining for them.

WEEK 15

GROUPS

There may be several different kinds of groups to where an organisation may place their customers. These people can be put into groups where they have people with the same behaviours or attitudes. Consumers may be grouped in a number of different ways. They can be grouped according to the financial class they belong to, age groups, culture, occupations and also according to what products they purchase.

The different types of groups available are:

Reference groupes:
These are groups that have signifant relevance on the groups evaluation, aspiration or behaviour. This group influences consumers in three ways. These influences are informational influence where an individual seeks information about various brands from an assosiation. The secound influence is utilitarian , this is so that he/she can satisfy the expectation of assosiates, an individual's decision to purchase a particular brand is influenced by their preference. The third influence is value expressive is where the individual that has purchased a certain product or brand feels that using or purchasing that brand will enhance the image other people have of him/her. This is a table that shows this groups influence.

Ascribed group:

This is the group people are born into, family, gender, social class. This can be what typre of class they come from for example middle class, high class or lower class. It also depends on the gender as in if they are male or female.

There are also many other kinds of groups available like:

Dissassociation

For example chavs

Contrived:

Organisations may look for certain target markets to advertise their products and they do this by achieving what groups people tend to fall in and which groups they are targeting for their products. They do this by doing some many kinds of market research where they learn about these attitudes and behaviours and get additional information to group their customers.

People of different age groups may be interested in the same things but are still grouped differently for example:

An old woman may want to buy clothes from a shop like marks and spencer where as a young girl would prefer to shop in a place like new look. The difference is that they may have different fashion taste.