Understanding the Market Opportunity
MKTG8012 – Marketing Management in Digital World (LOA6/Batch 16) – Understanding the Market Opportunity
1. How consumer characteristic may influence consumer buying behavior?
Consumer behavior is shown through a search to buy something you want to buy and use, and evaluate to determine the product or service that they hope will satisfy what they need. Consumers have an interesting variety to understand because they include a variety of individuals from various age groups, cultural backgrounds, education, and various other socio-economic conditions. It is very important to always learn about how consumers behave and what factors influence that behavior. The science of consumer behavior is the science of how individuals make decisions in using the resources they have such as time, energy, and money to consume something, including learning what, why, who, when, and where someone buys, and how often someone buys and uses a products and services.
According to Kotler and Keller (2008), consumer behavior is the study of how individuals, groups and organizations choose, buy, use and place goods, services, ideas or experiences to satisfy their wants and needs.
According to Basu Swastha (2000), consumer behavior is the activities of individuals who are directly involved in obtaining and using goods and services, including the decision making process in preparing and determining these activities.
According to Schiffman and Kanuk (2008), consumer behavior describes the way individuals make decisions to utilize their available resources (time, money, effort) to buy goods related to consumption.
Several factors that influence consumer behavior in making decisions when they want to make purchases go through five stages, namely need recognition, information search, information evaluation, purchase and post-purchase. The process of making consumer purchasing decisions is influenced by three main factors according to Engel et.al (1994) that is :
– Individual differences factors consist of consumer resources, motivation and involvement, knowledge, attitudes, personality, lifestyle and demographics.
– Environmental factors consisting of culture, social class, personal influence, family and situation.
– The psychological process consists of processing information, learning, changing attitudes / behaviors.
According to Kotler (2000), the main factors that influence consumer buying behavior are:
– Cultural factors
Cultural factors cannot be denied to have the most extensive and profound influence on consumer buying behavior. Marketers must fully understand the role played by prospective buyers culture, sub-cultures and social classes.
– Social factors
A consumers behavior can be influenced by social factors such as the behavior of the reference group (reference group), family, and the role and social status of consumers.
– Personal factors
The decision of a buyer is also influenced by personal characteristics, namely the age of the buyer and the stage of the buyers life cycle, work, economic conditions. Lifestyle, as well as personality and economic conditions, as well as personality and self-concept of prospective buyers.
– Psychological factors
The choice of buying someone is influenced also by four main psychological factors, namely motivation, perception, knowledge, and beliefs and attitudes.
In addition to these four factors, consumer behavior according to Kotler (2000) can also be influenced by marketing stimuli in the form of a marketing mix which includes:
Product policies include product planning and development. This activity is important especially in a dynamic & always changing environment. Therefore, companies are required to produce and offer products that are more suitable to the needs of consumers.
The price of a product can be said as a marketing tool that is quite important and vital, compared to various other marketing roles. This is because changes in the price of a product will result in policy changes from various distribution channels, and promotions. Although it is undeniable that a price level must cover marketing costs. Price is an important role for the product, it is also considered as a product that has an image like what in the market, the price role will adjust what benefits the customer will get from the product.
The effort to encourage the most aggressive increase in sales volume and awareness is by way of promotional strategies. The basis for developing a promotion is communication from the seller to the buyer.
– Distribution channel
The distribution of products to the market for customers gets easily is part of the marketing development process, to reach the target market for the company and its specific objectives regarding strategic marketing planning. Management must determine what method will be used to deliver products to the market.
Consumer behavior according to Swastha and Handoko (2000), divides the theory of consumer behavior into four types, namely:
– Microeconomic Theory.
In this theory explains that the decision to buy is the result of a conscious rational economic calculation. Individual buyers try to use items that will provide the most useful satisfaction in accordance with their tastes and relatively affordable prices.
– Psychological Theory.
This theory underlies individual psychological factors to always be influenced by environmental forces, which is the application of psychological field theories in analyzing consumer behavior.
– Sociological theory.
This theory focuses more on relationships and the influence between individuals associated with their behavior so that they prioritize group behavior rather than individual behavior.
– Anthropological theory.
This theory is the same as sociological theory, this theory also emphasizes the buying behavior of a group but the group studied is a broad group of people, among others: culture (the largest group), sub-culture (regional culture) and social classes.
2. What is Business Market? How does it differ from consumer market?
Business Market is defined as transactions conducted electronically and physically and occurs between business entities one to another business, sales of products and services to other businesses for resale or use to make other goods or services for sale. Business Market has a focus on products, goods and services that are usually sold to other businesses rather than directly to consumers. Many Business to business or B2B Business Markets have some overlap with the consumer market and services, for example, cleaning companies can provide residential and commercial services.
B2B sales involve a much higher amount of decision making in every purchase decision with a significantly higher & larger ratio of total per purchase, each sale is more complex but far more valuable in terms of business. A B2B purchase contract tends to be of long duration. Usually in a matter of months or even years so there needs to be a much more significant decision on nurturing and close attention. B2B has a longer chain of responsibility. Starting from the command to handle the procurement of goods, accounting, and until the purchase agreement. Very detailed content is needed for B2B marketing, because the audience expects to be served by sales and marketing teams. B2B marketing strategy is how you can make your prospective customers believe in the quality of our brand. Our customers who are business owners will certainly compare how strong your brand is with other brands, and whether our brand can be trusted. There are many stages in planning B2B strategies such as branding, product service, clear target markets, pricing, promotion, sales and distribution, communication methodologies, positioning statements, developing messages, campaign plans, working with 3rd parties, and measuring results.
Characteristics of Business Markets:
• Fewer buyers
• Close supplier-customer relationships
• Professional purchasing
• Many buying influences
• Multiple sales calls
• Derived demand
• Inelastic demand
• Fluctuating demand
• Geographically concentrated buyers
• Direct purchasing
The difference between Business to business and Business to customer is evident on the distribution channel. Many Business to business marketing depends on well-established relationships, and that purchasing decisions are more motivated by rational considerations than emotional factors, such as in the consumer market. The business market is bigger than the consumer market, because one demand in the world of consumers creates a ripple effect in the supply chain. Business to customer or B2C is a business that performs services or sales of goods or services to individual consumers or groups directly. In other words, the business that is carried out is directly related to consumers, not companies or other businesses. Broadly speaking, almost all B2C products can become B2B products, but B2B products are very little used by individual consumers directly.
The key to Marketing B2C or business to customer is how to play customer emotions, create attractive advertisements, competitive prices and good product quality. That customer trust in the business world is number 1, just how can you do some marketing strategies to get that trust. Besides that it makes an eye-catching advertisement and if possible it is very interesting. Customers will be very interested in advertisements containing messages that are relevant to them. B2C is more likely to see or search for offers and entertainment quickly with a short time based on the features and benefits of service products for the first time, usually emotionally triggered by hunger, desire, status, costs, and mouth to mouth. The principle that must always be held for B2C marketing is,
– Successfully combine the power of a product or service with the needs of a predetermined target market,
– Position and price to align products or services with the intended market,
– Communicate and sell it in a way that shows the value and benefits of a product effectively to the target market.
3. Who are involve in Business to Business buying process nad decision making process?
The Purchasing Center consists of all members who play one of seven roles in the purchasing decision process:
– initiators: Those who ask to buy something. They may be users or other parties in the organization.
– users: The users will be the ones to use the product, initiate the purchase process, generate purchase specs, and evaluate product performance after the purchase. Those who will use certain goods or services. In some cases, the user submits a purchase proposal and helps determine product requirements.
– influencers: The influencers are the tech personnel who help develop specs and evaluate alternate products. They are important when products involve new and advanced technology. People who influence the purchase decision. They often help formulate specifications and provide information to evaluate alternative purchases.
– deciders: Deciders choose the products. People who decide on product and supplier requirements.
– approvers: People who authorize / approve actions proposed by decision makers or buyers.
– buyers: Buyers select suppliers and negotiate the terms of purchase. People who have formal authority to choose suppliers and prepare purchase conditions. Buyers can help form product specifications, but their main role is to choose suppliers and negotiate. In more complicated purchases, buyers may include high-level managers.
– gatekeepers: Gatekeepers are typically secretaries and tech personnel. They control the flow of information to and among others within the buying center. Buyers who deal directly with a vendor are gatekeepers. People who have the power to prevent sellers and information so they cannot reach members of the purchasing center.
Stages in the Buying Process: Buyphases
• Problem recognition
• General need description
• Product specification
• Supplier search
• Proposal solicitation
• Supplier selection
• Order-routine specification
• Performance review
Organizational buying refers to the decision-making process by which formal organizations establish the need for purchased products and services, and identify, evaluate, and choose among alternative brands and suppliers. The organization that is responsible for taking and making decisions in the company is referred to as the decision making unit (DMU). the buying center acts as an informal ad hoc and is formally with specific criteria and special procedures to keep all of them to fit their needs and needs. usually for the decision making process consists of the following roles:
– The economic buyer
organizations that are responsible for purchasing products that allow companies to achieve profits on a business basis, they provide purchase justification by linking it to profits. This position in the organization can range from the manager level of the business unit to as high as the CEO.
– The infrastructure buyer
this organization acts as a purchasing decision maker at the execution level. If a product has an impact on the installation phase, the infrastructure buyer and / or unit decision making will act as decision makers to decide whether the return on investment (ROI) is worth the money needed to prepare the infrastructure. Infrastructure buyers are usually someone in the IT department.
– The user buyer
This organization plays a role in influencing purchasing decisions at the user level and deciding whether the organization can achieve its financial goals through these purchases.
4. Regarding Subliminal Perception from Maslow’s Hierarchy slide,
Picture 1 is the word ‘sex’ is hidden in the lower branches.
Picture 2 & 3 is beer ad, which uses subtle placement of Heineken beer bottles to illustrate a woman’s behind and legs when turned upside-down.
Subliminal Perception in marketing advertising in my opinion is legitimate to insert a message in it, and does not have to be something negative such as name and meaning, but there are some things that are considered, namely ethical considerations and legal use of subliminal advertisements that must be checked before do it. Usually the message in it we do not realize at the beginning of the first time seeing it, but subliminal ads have a purpose and communicate what they want. The marketing strategy with subliminal messages aims to encourage users who see the advertisement of the product through a subtle effect, which is usually not seen by the naked eye of most people when they first see it. Not only images are used, even sounds and other techniques are also used to help messages enter our subconscious. Although it is not easy to detect, there are 2 effects that will appear, will cause a lot of controversy or will viral for awareness purposes that will affect the choice of people who look at purchase.
Even some famous big companies also contain subliminal messages that do not attract much attention and are not easy to see in the first sight. They dont stand out, but they are valuable because they have a reason. Companies now have a variety of smart ways, they have chosen a more subtle way to suggest do the Subliminal Perception, focus on content that will be presented and add value to benefits through marketing by Subliminal Perception.
- Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.
- Which of the following would be the best illustration of a subculture? a religion
- Organizational buying refers to the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.
- The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.