Presentation Transcript

1. ANALYZING CONSUMER MARKET & BUSINESS MARKET

2. Overview MARKET CONSUMER BUSINESS Definition of business market Types of business customers Characteristics of buyer Types of buying System of Buying & Selling The buying center Buying decision process Definition of consumer market Types of consumers Factors influences consumer behavior Model of consumer behavior Buying decision process Types of buying These topics are very important because they will prepare you with extensive knowledge on how consumers buy your company’s products as well as how you could make decision on buying other products for the company’s productions.

3. CONSUMER MARKET

4. TABLE OF CONTENTS Definition of consumer market Types of consumers Factors influences consumer behavior Model of consumer behavior Consumer buying decision process
5. What is consumer market? A consumer market is made up of individuals and households A consumer market buys goods and services for personal consumption The buyers in the consumers market are end consumers
6. How many types of consumers in consumer market? Demographics (male, female, young, old, etc) Geographical areas (urban, sub-urban) Cultures (Muslim, Buddhist, Hindu, etc) Locations (internal, external) Life cycle (single, married, divorced) Needs hierarchies (Maslow) Satisfaction (satisfied, dissatisfied, etc) Decision making (routine, limited, extensive)
7. What guides consumer to buy in a consumer market? Model of consumer behavior
8. What factors influence consumer behavior in the consumer market? Cultural Factors (nationalities, religions, racial groups, social class and geographic regions) Social Factors (reference Groups, family, roles and status) Personal Factors (age and stage in the life cycle, occupation and economic circumstances, personality and self-concept, lifestyles and values)
9. How consumer make buying decision? Family, relatives, friends Advertising, WWW, labels, sellers Public, mass media, opinion leader Experience Able to satisfy needs Able to pay Brand decision Many benefits Dealer decision Bundle of attributes Quantity decision Able to get Timing decision Pay methods decision Satisfy-Action-Use-Dispose
10. What Hinder Consumer From Buying Our Products in the Consumer Market ? Attitude of others Buying risks Positive attitude Negative attitude Passive attitude Functional Risk Physical Risk Financial Risk Social Risk Psychological Risk Time Risk
11. What Hinder Consumer From Buying Our Products in the Consumer Market ? Functional Risk Product failed to function well Physical Risk Product is dangerous to health and physical Financial Risk Product is not worth for the price paid Social Risk Product resulted in embarrassment from others Psychological Risk Product affect the mental well-being Time Risk Product failed lead to opportunity cost to find new product

12. BUSINESS MARKET

13. Business Market Definition of business market Types of business customers Characteristics of business buyer Types of buying in business market System of Buying & Selling in business market The buying center in business market Business buying decision process
14. What is business market? A business market is made up of companies, organizations, sectors and industries A business market buys goods and services to be used to make other goods or to help with the production process The buyers in the consumers market are business and organization customers
15. What are the types of business customers? Profit oriented Non-Profit oriented Private Government Industries
16. What are the characteristics of Business Market? What make it differ from consumer market? Fewer producers, larger buyers Close supplier-customer relationship Professional purchasing (well trained purchasing staff) Multiple buying influences (many involvement) Multiple sales calls (longer decision, time consuming) Derived demand (rely on consumer dd) Inelastic demand (not sensitive towards price changes) Fluctuating demand (changed as consumer dd changed) Geographically concentrated buyers (reduce selling cost) Direct purchasing (no middleman for complex goods)
17. How business customer buy? Straight re-buy is when the purchasing department re-orders on a routine basis and chooses from suppliers on an approved lists. Modified re-buy is when the buyer wants to modify product specifications, prices, delivery requirements, or other items. New Task is when the purchaser buys a product or service for the first time.
18. What is System of Buying & Selling? Prime contractors The government would seek bids from prime contractors, who assembled the package or system. The prime contractor would thus provide a turnkey solution, so-called because the buyer simply had to turn one key to get the job done. Second-tier contractors The contractor who was awarded the contract would be responsible for bidding out and assembling the system’s subcomponents from second-tier contractors. Systems contracting A single supplier provides the buyer with his or her entire requirements of maintenance, repair, and operating (MRO) supplies.
19. What is Buying Center? Who are they? All those individuals and groups who participate in the purchasing decision-making process They share some common goals and share the risks arising from the decisions Initiators. Influencers. Gatekeepers. Deciders. Approvers. Buyers. Users.
20. What are the roles of people in The Buying Center? Initiators requests the product influence the buying decision Influencers have the power to prevent seller information from reaching members of the buying centre Gatekeepers Deciders make the decision of what to purchase Approvers authorize the proposal Buyers have the formal authority to purchase Users will use the product
21. How Business customer make buying decision?
22. Business buying decision process The buying process begins when someone in the company recognizes a problem or need. The recognition can be started by internal or external motivation. Problem Recognition Need Description & Product Specification Company will determine the needed item’s general characteristics and required quantity. The buyer next tries to identify the most appropriate suppliers through trade directories, contacts with other companies, trade advertisements, and trade shows and the Internet. Supplier Search
23. Business buying decision process Potential suppliers may be visited by the company’s agents, who will examine the suppliers’ manufacturing facilities and meeting their personnel. After evaluating each suppliers, the company will end up with a short list of qualified suppliers. E-Procurement The company invites qualified suppliers to submit proposals. If the item is complex, the company will require a detailed written proposal from each qualified supplier. Proposal Solicitation
24. Business buying decision process Buying centre will specify desired supplier attributes and indicate their relative importance. To rate and identify the most attractive suppliers, buying centre often use a supplier-evaluation model. Supplier Selection Company negotiates the final order, listing the technical specifications, the quantity needed, the expected time of delivery, return policies & warranties Order Routine Specification Finally the company will contact the end users and ask for their evaluations on the product performance Rate the supplier on several criteria using a weighted-score method Aggregate the cost of poor performance to come up with adjusted costs of purchase, including price Performance Review
25. How many types of Buyer – Seller Relationship in business market? January 2010 Basic Buying & Selling Relationship Bare Bones Relationship Contractual Relationship Customer Supply/ Competition Relationship Cooperative Systems Relationship Collaborative Relationship Mutually Adaptive Relationship Customer is King Relationship
26. Buyer – Seller Relationship Basic Buying & Selling Relationship Simple, moderate level of cooperation and information change Contractual Relationship Relationship due to formal contract, low level of trust, low cooperation and low interaction Cooperative Systems Relationship Relationship due to the nature of business and products nothing more or less Mutually Adaptive Relationship Many relationship, trust and commitment naturally existed
27. Buyer – Seller Relationship New relationship and really need some adjustments, still new and less cooperation Bare Bones Relationship Relationship due to the competition in business. Not really loyal but have to for the sake of winning the competition. Customer Supply@ Competition Relationship True partnership, emotionally attached, mature relationship, high trust Collaborative Relationship Relationship due to customers needs. Less trust, not really loyal but for the sake of gaining business from customers demand Customer is King Relationship
28. CONCLUSION We should have a broad knowledge on how consumers and business responds towards our marketing programs. This is very crucial to help marketers in managing the marketing efforts of the organization Knowledge about who is consumer, what they buy, who buy, how they buy and what makes they buy is very important to marketers in understanding the consumer behavior as well as the behavior of the business customers.
29. Tutorials Describe consumer characteristics which influence buying behavior Identify the major psychological processes which influence consumer responses to the marketing program Describe how consumers make purchasing decisions Discuss how marketers analyze consumer decision making. Explain three factors that influence consumer behavior. A buyer's decisions are influenced by four personal characteristics. Discuss these characteristics. Explain four key psychological processes which influence consumer responses.
30. Tutorials Discuss three of the best-known theories of human motivation. Differentiate between Selective Attention, Selective Distortion and Selective Retention. Choose a product that you recently purchased. As a consumer, you go through five stages of buying-decision process. Explain these stages with example. Consumers may perceive six types of risk in buying and consuming a product. Identify these risks. Marketers use four techniques to try to convert a low-involvement product into one of higher involvement. Discuss these techniques. Examine a set of key core principles of mental accounting.
31. Tutorials Describe what is the business market, and how it differs from the consumer market Examine the buying situations that organizational buyers face Identify who participates in the business-to-business buying process Describe how business buyers make their decisions Discuss how companies can build strong relationships with business customers Explain how institutional buyers and government agencies do their buying. Describe ten major business markets characteristics. Explain the difference among straight re-buy, modified re-buy and new task. Differentiate the role of prime contractors and second-tier contractors
32. Tutorials There are seven roles in the purchase decision process. Examine these roles. People are not buying “products” they are buying solutions to two problems. Explain what are the problems. Robinson and Associates have identified eight stages in the business buying-decision process and called them buy phases. Describe these stages in detail. Buyer-supplier relationships differ according to four factors. Identify these factors. Buyer-supplier relationships are classified into eight categories. Discuss these categories. Define the Specific investments and Opportunism.