Business to Business Marketing

Todays lecture shows the difference between marketing to businesses as opposed to mass marketing.

According to Fill and Fill (2005) the B2B market for goods and services bought and sold is far larger than the consumer market. The business market includes many different types and sizes of organizations that cooperate and create relationships of different importance and duration.

There are different types of business organizations such as:

Government organisations
Health
Environmental protection
Education
Policing
Transport
National defence and security

Institutional organisations
Not-for-profit
Community-based organisations

Commercial organisations
Distributors
Original equipment manufacturers
Users
Retailers

When marketing B2B a lot of factors can effect the transaction.
Before the transaction is complete many months of planning and proposals maybe necessary to achieve the sale.
The decision making is more complex than competing in the consumer market.
To achieve this it is necessary for personal relationships to develop within both sales and technical representatives of both companies.



In B2B marketing it may be necessary to modify the product on offer to achieve a sale.
• Because there are fewer clients you cannot afford to lose any
• Because there is a lot of money and risk at stake you need to be able to build TRUST
• How can you do this?
• Advertising?
• Sales promotion?
• Face to Face?

FTPEPS varies from organization to organization.
F – Financial
T – Time
P – Performance
E – Ego
P – Physical
S – Social

All the above factors do not come in to play in every business transaction. As was mentioned earlier a close relationship needs to be established to ensure a successful sale. After sale follow up is most essential regarding product service, and warranty.

Culture

Culture is defined as:

`A culture is the configuration of learned behaviour and results of behaviour whose component elements are shared and transmitted by members of a particular society'. (Ralph Linton, 1945)

or `The way we do things around here'.

Culture is built on family, friends and teachers. Each person develops a culture under the influence of various people. This enables us to distinguish smaller groups within the general culture. This is apparent within organizations which tend to have a basic frame of organization that applies to everyone.

An example of how peoples perception can change due to World events. An example is the Second World War which involved most of Europe. Following an attack on Pearl Harbour changed the perceptions of the USA and dragged then in to European conflict.
Culture is represented by “the skin of an onion, indicating that symbols represent the most superficial and value the deepest manifestation of culture.”















Culture is made up of three essential components:
Beliefs: - mental and verbal processes which reflect our knowledge and assessment of products and services.
Values: - indicators consumers use as guides for what is appropriate behaviour, they tend to be relatively enduring and stable over time and widely accepted by members of a particular market.
Customs: - overt modes of behaviour that constitute culturally approved or acceptable ways of behaving in specific situations.
The cultural framework Terpstra and Sarathy 2000 helps marketers when launching a product on to international market. They need to assess cultural differences such as language, education, religion values and attitudes.

Go to: http://www.marketingteacher.com/Lessons/lesson_international_marketing_culture.htm and find out more.

Four dimensions to explain variations in culture across national boundaries is explained by Geert Hofstede:

-Power distance (interpersonal relationships)
- Uncertainty avoidance
- Masculinity/femininity
- Individualism/collectivism

In the group I was associated with we prepared some information about Poland.
Poland has produced some famous people: Mikolaj Kopernik (famous scientist), John Paul II (Pope), Lech Walesa (Politician), Maria Curie-Sklodowska (chemist), Frideric Chopin(composer), Mariusz Pudzianowski (strongmen).
Popular national food:
Bigos (sauerkraut with bacon and sausage),
Kotlet Schabowy (pork chops with potatoes and salad on the side)
Chicken soup with pasta.
Main religion is Catholicism, and main values are family, hard working and patriotic.

http://www.youtube.com/watch?v=GBkLZ0A5jf0

To conclude before marketing a product the company needs to have full information regarding the population, their preferences, any problems associated with the proposed product launch.

Social class

Todays lectures discussed social classes.

http://www.youtube.com/watch?v=1mYY1QGK0jQ

Social class is a division of society made up of persons possessing certain common social characteristics which are taken to qualify them for intimate, equal status relations with one another, and which restrict their interaction with members of other social classes.
(Krech, Crutchfield & Ballachey in Dubois, 2000).

The lesson started with an example of social classes in ancient Greece:


















In comparison to the above class structure in Greece, British society can generally be divided into a three groups in the early 1900’s. Today there are more class groupings as shown below.


The main factor affecting these changes are:
- Social classes are easily changed upwards and downwards by marriage between classes.
- The introduction of a welfare state that can apply to any class depending on circumstances.
- Marriage frequently increases the income of the household thru both spouses working
- Classes have merged thru education being available to all, the availability of degree education is subject to a persons desire to self achieve.

http://www.youtube.com/watch?v=SuPxgSYBk6s


The following gives good indications of how social classes determine purchases:
• Social class is a better indicator of purchases that have a symbolic aspect but low to moderate prices e.g. cosmetics, liqueurs
• Income is a better indicator of purchase behavior for non-symbolic, high expenditure products e.g. fridge freezers
• Both social class & income data are needed to predict behavior with expensive & symbolic products e.g. cars, homes

In conclusion incomes and professions can cause a change in class structure i.e. a skilled engineer considered to be in skilled profession could in fact be earning more than someone in a higher class.

Marketing to Children

Marketers are aware that children are often the key to their parents money, by constantly nagging it is possible for them to influence their parents decision making. This is called pester power and can influence parents to buy advertised or fashionable items.

Advertisers spend 100s of billions of dollars a year worldwide encouraging, persuading and manipulating people into a consumer lifestyle that has devastating consequences for the environment through its extravagance and wastefulness. Advertising exploits individual insecurities, creates false needs and offers counterfeit solutions. It fosters dissatisfaction that leads to consumption. Children are particularly vulnerable to this sort of manipulation (Beder, 2009).

During the course lecture a interesting TV programme was shown relating children’s attitudes to media and modern advertising. In the title of the programme a key phrase was ‘children grow older younger’ which marketing has realised that children of a very young age are able to recognize the most popular brands such as Coca-Cola, Fish-Fingers, Barbie and did not recognize or show interest in brands they had not tried.

http://www.youtube.com/watch?v=L01zf0aQvxQ

Another subject was about Piaget's theory which is based on the idea that the developing child builds cognitive structures–in other words, mental “maps”, schemes, or networked concepts for understanding and responding to physical experiences within his or her environment.

More about Piaget's Theory you can find on: http://www.funderstanding.com/content/piaget

The Family

Family is one of the most important thing during a human life. We all come from a family and this give us a sense of belonging to a functional group which are one of the basic needs on Maslow’s Hierarchy of needs. Our families give us an identity. They provide us with a moral, social and economic support. The definition of the family is a group of the individuals living under one roof and usually under one head, persons of common ancestry and people or groups of people regarded as deriving from a common stock.
It is difficult a define a family in such a basic way because of sociological and cultural reasons because of how families live.

Dr Landa says that today the idea of the family itself is changing and is sometimes being replaced by other groups whose links are based on confidence, mutual support and a sense of common destiny. Religious groups, office colleagues and homosexuals are now sometimes seen to operate as ‘family’. This new way of thinking about the family is radically different and is not based on correct biblical teaching.

Changes in the family structure:
- Increasing number of births out of marriage
- Increase in one parent families (1/7)
- Increase in step families
- Nuclear family is being challenged by the “horizontal” family of step children & step parents
- Increasing no. of widowed living on own.

http://www.statistics.gov.uk/cci/nugget.asp?id=350


Further demographics show the changing family structure:
- Average household size is 2.4 people in 2001
- Dramatic increase in one person households 12% in 1961, 26% in 1990, 6.8 million in 2001 – 28%
- More than 50% of women over the age of 65 years live on their own
- Life expectancy for women is 78.8 years for men is 73.2 years
- Divorces have increased to 1 in 3
- 7% of households in 2001 – single parents

http://uk.youtube.com/watch?v=1cjf_u_Q-ho


Family life cycles have many variations. Children living with married parents tend to experience less material hardships than children living with a single parent which can cause behavioural problems during school age.

The family structure is an important consumer and marketers should remember there are different preferences due to age, sex and family status. For example during a shopping expedition the family tends to buy things suitable for children thru to elderly people.

Children can have a big influence on their parents decisions and choices by constantly voicing their opinions.

Generatiomal Marketing

The way that we promote products and services is a according to a specific generation. Each generation require a certain marketing targets. In recent years marketing companies are looking at generations for a target audience.

Target generations can include:
1. Mature citizens born between 1909 to 1945
2. Baby boomers were born between 1946 to 1964
3. Baby busters or Generational Xers born 1965 to 1980
4. Millenials or Generational 2001erswere born after 1980



We can see that there are strong fluctuations thru out the years, mainly caused by the Second World War. This then caused a rise in the population in the 1960s, due to the fact that the post war babies were now reproducing.
Marketers have to consider many different aspects when looking at the target audience. This means that the success in generating the right product can create a relationship and build brand awareness.



Our task in the lecture was to look at the over 50’s generation who could be considered to be the ‘ young olds’. We needed to find what there favourite brands were and why? And how they valued these brands? These tended to be well established high street brands such as Marks and Spencers, John Lewis and Debenhams, and in more recent years the likes of Asda which has branched out in to clothing and electrical goods thus providing a complete shopping experience. In the above stores it is possible to purchase items for everybody, grandchildren, children and themselves. This has created a marketing advantage that the stores promote to the full via advertising to cover all generations.

http://www.youtube.com/watch?v=HJO1vJ4e9AI

This generation group accounts for the largest population in the United Kingdom and has great influence among friends and family. They have considerable brand awareness and are likely to relate to a particularly store because of product reliability. This generation group is very difficult to get to change their views due to long term brand awareness.

Groups

There are many groups of people who belong to professional and social bodies. Some of them are professional groups such as medical and law societies, others are more social and recreational such as members of golf clubs, gyms. Professional individuals group in professional bodies to achieve status and recognition of their achievements. Social groups can represent people from many walks of life and their professional achievements are not a factor in social group relationships.

Bordbeck defined a group as an aggregate of individuals standing in certain descriptive relations to each other. The kinds of relation depends upon the kind of group, whether it be a family or an audience, a committee, a labour union.

A group is two or more individuals who:
-share a set of norms,
-have role relationships,
-and experience interdependent behaviours.
Groups influence the socialization process--i.e., they influence what we learn and how we behave.

TYPES OF GROUPS

The power to make an individual conform to group pressure and influence depends upon:
- Importance of membership e.g. football strips
- Fear of negative sanctions e.g. becoming a social outcast
- Degree of support from others e.g. course classes.

Group reference lies behind many successful advertising campaigns. People of certain social classes and age groups are frequently targeted with advertising showing products or promotional campaigns suitable to their class status. This can direct their thinking and cause them to take action according to the advertisement.


http://www.youtube.com/watchv=H8XzuNqDch4&feature=PlayList&p=D87D770E5A00D1EC&index=87


The Mercedes ad is perfect example of targeting successful professional people in the age group 30+ years. This advertisement is giving reasons that to own such a product increases the professional standing of the person and implies success.