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Consumer and organizational buyers’ behavior

Consumer buyer is the one who purchases goods and services for consumption purposes while organizational buyer is the one who purchases goods and services for either production or re-selling e.g. producers, resellers, governments and institutions.

Consumers and organizational buyers have different buying processes, in consumer buying they have the following process; firstly there is need recognition where a consumer identifies the need of a particular commodity, secondly there is information gathering where the consumer searches information on the satisfaction. the information can be gotten from friends, personal experience, and public advertisement, thirdly the consumer evaluate the available alternatives which can satisfy his needs, fourthly the consumer can make a purchase after the consumer has been satisfied with the product i.e. meets the needs and has the solution the consumer can buy the product and lastly there is post purchase evaluation where the consumer looks whether the product meet his/her needs. Organizational buyers follow a different buying process which is as follows; first there is need identification where the organization recognizes the need of a particular product. Secondly, the organization identifies the characteristics and the quantities of the goods required. thirdly it prepares the guides which will help the purchasing department, fourthly the organization looks for the best places where they can get the product, there is acquisition and looking into the proposals and then they evaluate and choose the best supplier, after that there is the choosing of order and finally the organization evaluates the feedback they get from different departments.

Both consumer and organizational buyers are involved in many ways in the market, consumers buy small quantities while organizations buy in large quantities, the number of costumer also differ as individual consumers are many compared to organizational buyers, organizational buyers are concentrated and they buy in multiple while individual buyers are dispersed and buy in single. In individual buyers, decision making is personal whereas different departments such as finance, purchases and human resources are involved in organizational buyers. Factors such as lifestyle, attitude, social class, family, culture determine the behavior of the consumer.

Introduction to marketing management

Segmentation, targeting, positioning and marketing environment

Segmentation is the division of the market into similar group of customers with similar product requirements in order to improve the products’ sales volume. There are four level of segmentation which include mass marketing where there is no segmentation; product is sold in the market to all consumers, there is also niche marketing where a portion of market is targeted for a particular product for example a bank account which addresses the need for a particular group like youth. Also there is segment market where a market is divided into two or more groups and different market strategies are applied for the same product in order to increase number of customers. Finally there is micro-marketing which involves targeting specific group or location e.g. school, hospital in order to get maximum customers.

Market target is whereby there is concentration on a particular segment of the market in providing product and services to the consumers. There are different market strategies which involves; single segment strategy where a company identifies a segment which it concentrates in providing goods and services, there is also selective specialization where a company can identify two or more segment which it specializes in proving goods and services, product specialization is one which a market is identified and a certain product is required in this segment and the company concentrates in providing that product, also there is market specialization where one concentrates in a certain market in providing goods and services. Full market coverage serves the entire market by using mass market strategy or other market mix strategies. Perceptual mapping is one of the techniques employed by market researchers to present consumer views of a product. It helps to improve the sales by incorporating the views given by consumers in relation to prices, sizes, and packaging methods. Different factors which may include product, price, place, and promotion affect decision making. These four are internal and are referred to as micro whereby an organization has control over. There are external factors (macro) whereby an organization has no control over which include political factors, economic factors like inflation, legal factors.

Products

A product is any tangible good that can be exchanged for certain value, in marketing products can be in form of individual product or multiple products. Individual products are sold in single i.e. it is sold alone while multiple products sold with other products e.g. TV set and antennae. Individual products do not depend on the demand of another product while multiple products may depend on the demand of others.

The company can have different strategic marketing which may include product specialization during production, market specialization during distribution and full market coverage during sales and marketing. The strategies may include product development, market penetration and expansion, invention and innovations etc.

The advantages of the models includes market attractiveness which makes the product to be sold easily in the market and also it strengthens the competition which will favor the company’s product however this models are difficulty to implement and does not suit all the departments

Promotions 

In order to increase sales, organizations are engaging in different ways to promote their sales. Some of the methods used include use of mass media such as televisions, radio, and print media. They also use personal selling whereby they face to face communicate with potential buyers in order to convince them to buy. Advantage of using TVs is product can be seen and heard thus appealing to the customer, the coverage is large hence many consumers receive the information unlike personal selling is limited to the location and number of people at a time. Radio also reaches a large audience hence the targeted market receives information at the same time. Gifts and free samples also promote sales such that it attracts customers to experience the new product or existing products which have been rebranded, packaged, changed price or size. These gifts and free samples give consumers opportunity to use the product before they use. Disadvantage of using TVs is expensive to advertise through them, and information reaches those who own the TV sets only and are watching during the time the advertisement is put across. For personal selling, there is convincing and negotiation which leads to more sales unlike radio or newspaper which is passive. Other promotion methods include use of billboards which are visible to attract the attention of potential consumers. The appropriateness and suitability of the method of promotion depends on the targeted group, resources available and the objective of the organization. For example, if its main objective is to promote awareness and increase volume of sales, it can use radio, TVs and print media. When targeting particular location it can use posters, billboards and personal selling to give information and increase volumes. When a company needs to achieve many objectives at the same time, they can combine two or more means to achieve them.

Analyzing competitors and creating a competitive advantage.

Companies may compete in many ways like pricing of their products, location, customer service, and customization of their products. Direct competitors have same or related goods such as HP and Dell, LG and Samsung while indirect competitors deal with different products or services but share the sector and place like cinema and discos.  In assessing competitive structure, models used include; there is threat from those entering the market for the first time whereby they come with new products which saturate the market. Substitutes also provide threat such that customer have a wide range to choose from. Bargaining power of suppliers also assess the competitive structure among existing competitors such that they make costs differ hence different price of the end products. Buyers too have different bargaining powers leading to different selling price. Finally, existing competitors assess their structures to maximize their market share. In order to maximize the market share, a company must have good price, right product in the right place and use good means to give information (promote). This is known as marketing mix. Competitive advantage ensures that the product is the best in the market in terms of performance, durability, and design among others.  Distribution also ensures good location, there is quick delivery, systematic re-ordering of purchases. Promotion involves use of right methods of advertising and demonstrations to consumers.

Firms have different competitive behavior in the market, the behavior in the market can be in the following ways; it can be in form of conflict where firms use different methods to dominate the market this method can be inform of dirty tricks, advertising by giving the negative information about another firm and also lowering prices,. There is competitive behavior where firms will want to overdo one another in terms of prices, product and services they offer to customers.  We have also coexistence behavior where firms accommodate each other in the market. There is also cooperation behavior where firms merge together in the market in order to achieve their goals of giving better services and products to the people. And lastly we have collision behavior where firms may want to eliminate other from the market so they can dominate the market.

Political issues in micro and macro environment

In analyzing micro and macro environment company need to look at political issues of these environments this is mainly because political stability of any country or state is more important in economic development of the country. Microenvironment deals with a specific market while macro environment deals with a segmented market.

Environment with political instability makes investment expensive and difficult since there is no proper laid down procedures in carrying business in that environment. The market is not reliable and one cannot be able to export his products or import raw materials into that country e.g. it is very difficult to invest in a country like Somali which has been exposed to war for long period. Technology is easily available in a more stable political environment compared to the environment with unstable political issues e.g. technology is imported from developed countries to developing countries and it is easily to import this technology to a stable political environment. One has to look if the country has proper taxation laws which will help one succeed in his the line of business, taxation law should not hinder the operation of business in the country one want to run the business, political regimes should have good taxation laws this will help in operation of business. Employment laws should also be considered when a company wants to start operating in a country, different countries have various employment laws like the European union has employment laws which are different from those of the United States, also one has to look if the regime has laws which gives support to the business community since these will affect very much on how one will run his business. And finally one has to look for the laws that country has on corporate social responsibility some countries have strict rules on corporate social responsibility and these should be taken into consideration when starting business in any country.

Consumer behavior in high and low involvement products

Consumer behavior means actions taken by consumers in relation to the product purchased; this also includes emotional, social responsibility after purchasing. Purchasing of a product involves both physical and mental actions i.e. perception a person has towards that product. Low involvement products are those which take a short time to make a decision for purchase, examples in basic needs (food, shelter, clothing) whereas high involvement include those take time to make a decision for purchase for example car and are expensive, and have an impact in their life. Consumers make different decision regarding different products and brands. It includes when to buy, from whom or not to buy; this depends on the past experience on the return policy, customer care, and effective time for shopping. Cognitive involves relating two or more circumstances to make viable decision such as when to buy and from whom.

Consumers buy goods which also have emotional impact on them, such impacts influence decision making. When buying high involvement products, emotional impact that it will cause is assessed. For example, when buying a car, the social class, and change of lifestyle is affected either positively or negatively. Each consumer has personal preferences and tastes which determines the brands they choose. This makes them have the habit to purchase a certain brand from specific dealer. Consumers have different habits due to their tastes and the emotional impacts it has to them after purchase.

Sales promotion

Sales promotions a way of informing consumers about the goods and services that is available in the market. Companies prefer using promotions as communication tools this is because of the following; promotion creates revenue to the company this because promotion increases the volume of sales this will increase the revenue the company will receive, promotion create an opportunity for the company to train its staff this will make the staff to have knowledge and skill and this will lead to efficient of the staff. It also brings the tasting of opportunity of the goods and market the company will know where to improve since it will get feedback from the customer during promotion, it also derives customer decision making as they will be convinced by the promotional staffs, it also creates an opportunity to sell products to customer the company can sell different products to the customers during promotion period like buying one product and getting another product at a discount, promotion also creates new content and communication to customers this is created in form of news and will attract more customers and finally promotion creates differentiation between different products of same company and those of another company.

There are different sales promotion techniques which includes mass media, personal selling which involves face to face selling, giving gifts and free samples and installation and demonstrations. Sometimes a company can carry out promotions on the already established market this may include rewarding royal customer and also giving more information to new customer, companies can also give after sales service to the existing customer. Promotion on already established market creates confidences in products and the company this will help the company to easily penetrate the market even during new product launching.

Segmentation of a fast food company

Fast food company can effectively segment its market by looking the following factors; first it should look at the location of the company, in this it will assess the spending levels, income levels, buying habit and the employment level of those around for example if the people spends much and they are employed the location will be perfect and also if there are companies , schools and colleges then the company can segment that area, secondly it will consider demographic factor of the location the company will consider the age, gender and disposable income of the area if there are many youth and children the location will be perfect for a fast food company since the youth like fast foods, thirdly it will consider the psychographic of the area the company will consider the economic class and social class of the people living in that area and their lifestyle. Finally it will consider the behaviors of those around the company this includes what they buy and how often.

The company can use the following target market strategies in pursuing their objective; firstly it will carry out product specialization, the company will strictly deal with specific fast food this will make the company to produce the food more effectively, secondly they can do market specialization where it will specialization in a particular market only this will make people around it to have the confidence in the company, lastly it can carry out full market coverage where it will target the whole market. The company can pursue the above strategy since they are cheap and can attract more customers.

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