05. understanding consumer
TRANSCRIPT
THARAKA DIASDirector – Essence BTC
MBA(USA), MBA(Aldersgate),BBA(USA), Dip in Mgt, ACIM(UK), FAEA(Dip in AEA-UK), FinstSMM(UK),
CPM(Asia), MSLIM, PM(Sri-Lanka)
Because no longer can we take the customer/consumer for granted.
Out of 11000 new products introduced by 77 companies, only 56% are present 5 years later.
Only 8% of new product concepts offered by 112 leading companies reached the market. Out of that 83% failed to meet marketing objectives.
3AOT - www.tharakadias.com
All managers must become respect analysts of consumer motivation and behavior
No.
Because cross - cultural styles, habits, tastes, prevents such standardization.
The more successful a firm has been in the past, the more likely is it to fail in the future.
Because people tend to repeat behaviour for which they have been rewarded.
“Please leave your values at the desk” - Paris hotel
“Drop your trousers here for best results” - Bangkok laundry
“The manager has personally passed all water served here” - Acapulco restaurant
“Because of the impropriety of entertaining guests of the opposite sex in the bedroom, it is suggested that the lobby be used for the purpose.” - Zurich hotel
Ladies are requested not to have children in the bar.”- Norway bar
8AOT - www.tharakadias.com
“Come alive out of the grave” - Germany
“Pepsi brings your ancestors back from the grave” - China
9AOT - www.tharakadias.com
10AOT - www.tharakadias.com
4 P s M arke tingE nv iro nm ent
B uyerC h ara cte r is t ics
B uyerD e c is io n P roce ss
B uyerD e cis ion
C o nsum er
11AOT - www.tharakadias.com
P ro du ct P rice P lace P ro m o tion
4 P s
12AOT - www.tharakadias.com
E con om ic T e ch no log ica l P o li t ica l C u ltu ra l
M arke tingE nv iro nm ent
13AOT - www.tharakadias.com
15
Needs - state of felt deprivation including physical, social, and individual needs (e.g., food)
Wants - form that a human need takes as shaped by culture and individual personality (e.g., pastry)
Experiences Persons
ProductsAnything that can be Offered to a Market to Satisfy a Need or Want
Places
Organizations IdeasActivities
ServicesActivity or Benefit Offered for Sale That is Essentially
Intangible and Doesn’t Result in the Ownership of Anything
Consumer Market - All the individuals and households who buy or acquire goods and services for personal consumption. Consumer Buying Behavior The buying behavior of final consumers – individuals and households who buy goods and service for personal or household consumption. (Philip Kotler) Buying behavior is the decision process and actions of people involved in buying and using products.
Problem Recognition Information SearchEvaluation of AlternativesPurchase DecisionConsumptionPost purchase behavior
20AOT - www.tharakadias.com
21
Consumer vs. Organizational buying behavior
Main types of buying situations in B2B Stages of decision in B2B Roles in B2B procurement Influences on organizational
behavior Buying centres in summary
22
Decisions made by consumers are quite simple Organizational buying processes are more
complicated, there are several phases and steps Different buying behavior for different products
and target groups Simple consumer goods like food and beverages
are bought very spontaneously – influenced by advertising and product presentation
For premium consumer goods (expensive clothes, computers) – buying behavior is getting more rational – comparison
Private investment goods – price bargaining
23
More than one person involved Buying process follows certain rules Price comparison, standardisation,
tenders = Ausschreibungen)
24
involve more capabilities and greater workloads
From the buyer‘s and the supplier‘s side decision has more extensive consequences
25
Industrial plants Manufacturing installations Office buildings
26
Straigtht rebuy – routine decision, repetitive process (energy, office supplies, raw materials, wood, cigarettes), component suppliers for the automotive industry – little or no new information
Modified rebuy – more complicated but less sophisticated: cars, trucks, computers, consulting – modified rebuys are often treated too uncautious
New task – calls for thorough research – industrial plant – highest level of uncertainty. Strategic new tasks are of extreme strategic and financial importance (aircrafts, military equipment, infrastructure) – re-evaluation of alternatives and search for new information and new alternatives
27
Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order routine specification Performance review
28
Backhaus developed a widely usable model to distinguish between 5 phases of procurementPreliminary application (initiation phase)Tender proposalNegotiationProcessing of orderWarranty and services
29
Recognition of a problem (need) and a general solution
Released by top management = operating department or external consultants
Result request for an offer addressed to a number of potential suppliers
30
Determination of characteristics and quantity of needed items
Search for and qualification of potential sources
Supplier has to provide an offer Tries to be incomparable with his
competitors Customer tries to make the offer best
comparable
31
= core selling process Comprises acquisition and analysis
of proposals, evaluation of proposals and selection of suppliers
32
Contains selection of an order routine
Realisation of the transaction along with the fixation of after sales service tasks
33
Group of people involved in the buying process – buying center
Webster/Wind model shows 5 different roles – not institutionalised
This causes probleme in identifying and targeting the right people within the decision process
34
Role keepers have different tasks – not mandatory
Buyer User Initiator Gatekeeper Influencer
35
Formal authority to sign contracts Member of purchasing department Influences the vendor selection Not in technical details Main criteria: price + terms and
conditions of the contract
36
Person working with the product Interested in benefits and
unobstructed function of the product to buy
Large knowhow and preconceived opinion
37
A person with high technical knowledge and practical experience
definition of minimum requirements on technical or company standards
38
Controls the flow of information within the buying center
Assistant of decision maker Influence by preparing the decision
and the relevant documents
39
Right to say yes or no Mightiest person
40
Person who brings new ideas and solutions into the company
41
Long decision taking process High risk Complex buying center The specific competitive situation
42
Focuses on innovation Has to care for high flexibility in
research and development And manufacturing and assembling
43
Strict bid and tender rules High transparency Add value with service offering to
achieve a differentiating position Another aspect: financing and
sourcing models
44
Focus on negotiation phase Provide excellent people in the
selling center High technical knowledge
45
Problem solver! Proving success with comparable
tasks Reference projects!
Fewer, larger Buyers Geographically Concentrated Derived demand Close Supplier–customer Relationship Professional Purchasing Multiple Buying Influences Direct Purchasing Motives for purchase
AOT - THARAKA DIAS 46