Marketing for MOST Module 04 – Markets & Buying Behavior

1. Marketing for MOSTModule 04 – Markets & Buying Behavior 技術経営コンソーシアム 開発担当者 ：Ritsumeikan Asia Pacific University　教授: Takamoto, Akihiro 更新日 October, 2003

2. Module 04: Markets & Buying Behavior • What is a Market? • Characteristics Affecting Consumer Buying Behavior • Types of Buying Decision Behavior • The Buyer Decision Process • Buyer Decision Process for New Products • Characteristics of Business Markets • Case 1 • Case 2 • Comment and Discussion

3. Markets & Buying Behavior

4. What is a Market • In our daily life, the word “Market” is used in many meanings: • At the market, market day • Share of the market • The Japanese Market • A growing Market for Plasma display TVs (=demand) • The market will decide on a market-driven economy • The market crash of ’87. • Ref: Market Definition

5. What is a Market • A market is the set of all actual and potential buyers of a product. (Philip Kotler) • What is a potential market? • Consumer markets vs business markets

6. What is a Market • A consumer market is all the individuals and households who buy or acquire goods and services for personal consumption. (Philip Kotler) • A business market is all organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. (Philip Kotler) • Note: A business market is synonymous with industrial market or organizational market or producer market.

7. What is a Market “ 7O ” framework to define the market Who constitutes the market? Occupants What does the market buy? Objects Why does the market buy? Objectives Who participates in the buying? Organizations How does the market buy? Operations When does the market buy? Occasions Where does the market buy? Outlets

8. Characteristics Affecting Consumer Buying Behavior Cultural Factors: Culture The set of basic values, perceptions, Wants, and behaviors learned by a member of society from family and other important institutions. Subculture The group of people with shared value systems based on common life experiences and situations.

9. Characteristics Affecting Consumer Buying Behavior • Social Factors • Social classes • Groups, opinion leaders • Family • Roles and Status

10. Characteristics Affecting Consumer Buying Behavior • Personal Factors • Age and life-cycle stage • Occupation • Economic situation • Lifestyle

11. Characteristics Affecting Consumer Buying Behavior Lifestyle: A person’s pattern of living as expressed in his or her activities, interests, and opinions. ---------------------------------------------------------- The AIO dimensions: Activities, Interests, Opinions.

12. Characteristics Affecting Consumer Buying Behavior Personality: E.g. Bank employees prefer a Volvo to a BMW. A person’s distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment.

13. Characteristics Affecting Consumer Buying Behavior Self Concept (=Self Image) Mini Case: Come to Marlboro country e.g. Leo Burnett’s campaign for Marlboro, using the cowboy photographs, projects an image which has made it the biggest-selling cigarette in the world. It has been running, almost without change, for 25 years. Images found on the Internet…Not official Marlboro Advertisements

14. Characteristics Affecting Consumer Buying Behavior • Psychological Factors: • Motive (drive) • Freud’s Theory of Motivation: People are largely unconscious about the real psychological Forces (i.e. repressed urges) shaping their behavior.

15. Characteristics Affecting Consumer Buying Behavior • Psychological Factors: • Mazlows Theory of Motivation: (self-development and realization) (self-esteem, recognition, status) (sense of belonging, love) (security, protection) (food, water, shelter)

16. Types of Buying Decision Behavior • Complex Buying Behavior:

17. The Buyer Decision Process • The Buyer Decision Process:

18. The Buyer Decision Process for New Products • Stages in the Adoption Process • Does the customer always follow the above steps?

19. The Buyer Decision Process for New Products • Individual Differences in Innovativeness

20. The Buyer Decision Process for New Products Marketing Structure and Demand Business Markets contain fewer but larger buyers. Business customers are more geographically concentrated. Business buyer demand is derived from final consumer demand. Demand in many business markets is more inelastic - not affected as much in the short run by price changes. Demand in business markets fluctuates more and more quickly. Nature of the Buying Unit Business purchases involve more buyers Business buying involves a more professional purchasing effort. Types of Decisions and the Decision Process Business buyers usually face more complex buying decisions The business buying process is more formalized. In business buying, buyers and sellers work more closely together And build close long-run relationships. (Philip Kotler)

21. The Buyer Decision Process for New Products • Players in the Business Buying Process: • Q. Choose a business buyer (and the product they buy) and explain who are the players. Deciders Influencers Users Gatekeepers Buyers (Philip Kotler)

22. CASE • SRI-BI International Values and Lifestyle Framework • Q: The Lifestyle classificationby SRI-BI (Stanford ResearchInstitute-Business Intelligence)was developed with America society and American People in mind. If you were to develop such a classification or typology for your own home country market, how would you revise it?Perhaps you may want to propose an entirely different approach. Then, what would it be like? (http://www.sric-bi.com/)

23. CASE

24. CASE 2 – Shackletons Epic • The (supposed) Advertisement by Sir Ernest Shackleton • “Men Wanted for Hazardous Journey. Small wages,bitter cold, long months of complete darkness, constant danger; safe return doubtful. Honour and recognition in case of Success” • The ad, written by the famed polar explorer Sir Ernest Shackleton, [is said to have] appeared in London Newspapers in 1900. It [is said to have] yielded an immediate response of unprecedented proportions. Its imaginative appeal was clearly to people whom honour and recognition were, as they say, everythin. Its poer lay not in the novel idea of appealing to the human desire for honour and recognition, though the risks wer grave and the work terrible, but also inits deadly frankness and remarkably simple execution. • (Abridged from the original source: The Marketing Imagination by Theodore Levitt, Free Press) Q: How many people do you think responeded to this ad in 1900? Explain some of their motives utilizing Mazlows Hierarchy of Needs.

25. CASE 2 – Shackletons Epic • See: http://www.pbs.org/wgbh/nova/shackleton/1914/timeline.html • For more on Shackleton and his valiant crews Epic Tale of Survival.

26. CASE2 – Shackleton’s Epic

27. Comment and Discussion • Read all the Student Comments and questions listed in the attached file and discuss them one by one. • (REF: Studentcomment.doc) • Raise your own questions and discuss them as well?