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.