MM Notes Kmbn105 Unit 1
MM Notes Kmbn105 Unit 1
KMBN105/2020-21
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FUNCTIONS OF MARKETING
Marketing is related to the exchange of goods and services. Through
its medium the goods and services are brought to the place of
consumption. This satisfies the needs of the customers. The following
activities are undertaken in respect of the exchange of goods and
services:
2. Marketing Planning: In order to achieve the objectives of an
1. Gathering and Analyzing Market Information: organization with regard to its marketing, the marketer chalks out his
Gathering and analyzing market information is an important function marketing plan. For example, a company has a 25% market share of a
of marketing. Under it, an effort is made to understand the consumer particular product.
thoroughly in the following ways: The company wants to raise it to 40%. In order to achieve this
(a) What do the consumers want? objective the marketer has to prepare a plan in respect of the level of
production and promotion efforts. It will also be decided as to who
(b) In what quantity? will do what, when and how. To do this is known as marketing
(c) At what price? planning.
(d) When do they want (it)? 3. Product Designing and Development: Product designing plays an
important role in product selling. The company whose product is better
(e) What kind of advertisement do they like?
and attractively designed sells more than the product of a company
(f) Where do they want (it)? whose design happens to be weak and unattractive.
What kind of distribution system do they like? All the relevant
information about the consumer is collected and analyzed. On the
basis
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In this way, it can be said that the possession of a special design Label is a slip which is found on the product itself or on the package
affords a company to a competitive advantage. It is important to providing all the information regarding the product and its producer.
remember that it is not sufficient to prepare a design in respect of a This can either be in the form of a cover or a seal.
product, but it is more important to develop it continuously.
For example, the name of the medicine on its bottle along with the
4. Standardization and Grading: Standardization refers to manufacturer‘s name, the formula used for making the medicine, date
determining of standard regarding size, quality, design, weight, color, of manufacturing, expiry date, batch no., price etc., are printed on the
raw material to be used, etc., in respect of a particular product. By slip thereby giving all the information regarding the medicine to the
doing so, it is ascertained that the given product will have some consumer. The slip carrying all these is details called Label and the
peculiarities. process of preparing it as Labeling.
This way, sale is made possible on the basis of samples. Mostly, it is 6. Branding: Every producer/seller wants that his product should have
the practice that the traders look at the samples and place purchase special identity in the market. In order to realize his wish he has to
order for a large quantity of the product concerned. The basis of it is give a name to his product which has to be distinct from other
that goods supplied conform to the same standard as shown in the competitors.
sample.
Giving of distinct name to one‘s product is called branding. Thus, the
Products having the same characteristics (or standard) are placed in a objective of branding is to show that the products of a given company
given category or grade. This placing is called grading. For example, a are different from that of the competitors, so that it has its own
company produces commodity – X, having three grades, namely A‘. identity.
‗B‘ and ‗C‘, representing three levels of quality; best, medium and
ordinary respectively. For instance, if a company wants to popularize its commodity – X
under the name of ―777‖ (triple seven) then its brand will be called
Customers who want best quality will be shown ‗A‘ grade product. ―777‖. It is possible that another company is selling a similar
This way, the customer will have no doubt in his mind that a low grade commodity under AAA (Triple ‗A‘) brand name.
product has been palmed off to him. Grading, therefore, makes sale-
purchase easy. Grading process is mostly used in case of agricultural Under these circumstances, both the companies will succeed in
products like food grains, cotton, tobacco, apples, mangoes, etc. establishing a distinct identity of their products in the market. When a
brand is not registered under the trade Mark Act, 1999, it becomes a
5. Packaging and Labeling: Packaging aims at avoiding breakage, Trade Mark.
damage, destruction, etc., of the goods during transit and storage.
Packaging facilitates handling, lifting, conveying of the goods. Many a 7. Customer Support Service: Customer is the king of market.
time, customers demand goods in different quantities. It necessitates Therefore, it is one of the chief functions of marketer to offer every
special packaging. Packing material includes bottles, canister, plastic possible help to the customers. A marketer offers primarily the
bags, tin or wooden boxes, jute bags etc. following services to the customers:
(I) After-sales-services
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(v) Maintenance services Transport facility is needed for the produced goods to reach the hands
of consumers. So the enterprise must have an easy access to means of
Helping the customer in this way offers him satisfaction and in today‘s transportation.
competitive age customer‘s satisfaction happens to be the top-most
priority. This encourages a customer‘s attachment to a particular Mostly we see on the road side‘s private vehicles belonging to Pepsi,
product and he starts buying that product time and again. Coca Cola, LML, Britannia, etc. These private carriers are the living
examples of transportation function of marketing. Place utility is thus
8. Pricing of Products: It is the most important function of a created by transportation activity.
marketing manager to fix price of a product. The price of a product is
12. Storage or Warehousing: There is a time-lag between the
affected by its cost, rate of profit, price of competing product, policy
purchase or production of goods and their sale. It is very essential to
of the government, etc. The price of a product should be fixed in a
store the goods at a safe place during this time-interval. Godowns are
manner that it should not appear to be too high and at the same time it
used for this purpose. Keeping of goods in godowns till the same are
should earn enough profit for the organization.
sold is called storage.
9. Promotion: Promotion means informing the consumers about the
products of the company and encouraging them to buy these products. For the marketing manager storage is an important function. Any
negligence on his part may damage the entire stock. Time utility is
There are four methods of promotion: (I) Advertising, (ii) Personal
thus created by storage activity.
selling, (iii) Sales promotion and (IV) Publicity. Every decision taken
by the marketer in this respect affects the sales. These decisions are WHAT IS MARKETED?
taken keeping in view the budget of the company. 1) Goods like eggs, steel, cars (Maruti!!!! Wow)
10. Physical Distribution: Under this function of marketing the 2) Services like airlines, hotels, barbers
decision about carrying things from the place of production to the 3) Experiences like Walt Disney world‘s magic kingdom, at
place of consumption is taken into account. To accomplish this task, planet Hollywood
decision about four factors are taken. They are: (I) Transportation, (ii) 4) Events like Olympics, trade shows, sports events (T20 World
Inventory, (iii) Warehousing and (IV) Order Processing. Physical Cup).
distribution, by taking things, at the right place and at the right time 5) Persons like celebrity marketing by making major film star as
creates time and place utility. brand ambassador (Amitabh Bachan, Cadbury‘s) etc.
6) Places like cities, states, nations to attract tourists, factories,
11. Transportation: Production, sale and consumption-all the three company headquarters, and new residents, like we use TAJ or
activities need not be at one place. Had it been so, transportation of say Nainital
goods for physical distribution would have become irrelevant. But 7) Properties like real state owners market properties or agent
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The marketing concept rests on four pillars: target market, customer Performance marketing – Driving the sales and revenue growth of an
needs, integrated marketing, and profitability. The selling concept organization holistically by reducing costs and increasing sales.
takes an inside-out perspective. It starts with the factory, focuses on Integrated marketing – Products, services and marketing should
existing products, and calls for heavy selling and promoting to produce work hand in hand towards to growth of the organization.
profitable sales. The marketing concept takes an outside-in Thus Holistic marketing is a concept which is organization wide and
perspective. It starts with a well-defined market, focuses on customer helps the growth of the organization with the right marketing of the
needs, coordinates activities that affect customers, and produces profits product. With the rise in competition and the limits placed on
by satisfying customers. customers with finite financial resources, decisions will be scarce and
as an organization we have to implement holistic marketing so that
HOLISTIC MARKETING CONCEPTS decisions are made by customers in our favor.
Today, customer mindset is changing. Wealth is becoming lesser and
debt is high. Thus customer purchases are being made after lots of
thinking. Customers search offline as well as online for the right
product and have good knowledge of the product before they purchase.
It is likely that the customer has already made a purchase decision
even before he enters the showroom. Thus holistic marketing concept
is needed at this hour to ensure that the customer chooses your product
over everyone else.
A key driver of Holistic marketing is marketing communications. The
job of marketing communications is to send the right message to the
target group. By approaching various customer contact points, a
uniform message can be sent to the customer. This consistency is
likely to raise confidence in the customer for your company thereby
raising the brand image.
Samsung is an example of Holistic marketing where the products are
developed keeping the customer in mind, the showrooms are branded SOCIETAL MARKETING CONCEPT: The Societal Marketing
in the proper manner, the customer service is polite and the service is Concept holds that the Organizations task is to determine the needs,
fast. Thus Samsung is an excellent example of Holistic marketing. wants and interests of target markets and to deliver the desired
Some key concepts which are important in Holistic marketing are satisfaction more effectively and efficiently than competitors in a
internal marketing – Marketing between all the departments in an way that preserves and enhances the consumers and the society‘s
organization wellbeing.
Relationship marketing – Building a better relationship with your It calls for social and Ethical considerations in marketing. They must
customers, internal as well as end customers is beneficial for holistic balance the conflicting criteria of Company profits, consumer want
satisfaction and Public Interest. In an age of environmental
marketing.
deterioration, resource shortage, explosive population growth, world
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Hunger and poverty and lack of Social Services Marketers needs to be Wants a mango, rice, lentils, and beans. Clearly, wants are shaped by
sensitive on these issues one‘s society.
Cause-Related Marketing: Activity by which a company with an Demands are wants for specific products backed by an ability
image, product or service to market builds a relationship/partnership to pay. Many people want a Mercedes; only a few are able and willing
with cause/causes for mutual benefit. This serves an opportunity for to buy one. Companies must measure not only how many people want
Corporate Reputation, raise Brand Awareness, increase Customer their product, but also how many would actually be willing and able to
Loyalty, Press coverage and Build Sales. DOCC….
buy it.
However, marketers do not create needs: Needs preexist marketers.
Core Concept of Marketing Marketers, along with other societal influences, influence wants.
Target Markets and Segmentation Marketers might promote the idea that a Mercedes would satisfy a
A marketer can rarely satisfy everyone in a market. Not everyone likes person‘s need for social status.
the same soft drink, automobile, college, and movie. Therefore, They do not, however, create the need for social status.
marketers start with market segmentation. They identify and profile Product or Offering
distinct groups of buyers who might prefer or require
People satisfy their needs and wants with products. A product is any
Varying products and marketing mixes. Market segments can be offering that can satisfy a need or want, such as one of the 10 basic
identified by examining demographic, psychographic, and behavioral offerings of goods, services, experiences, events, persons, places,
differences among buyers. The firm properties, organizations, information, and ideas.
Then decides which segments present the greatest opportunity—those A brand is an offering from a known source. A brand name
whose needs such as McDonald‘s carries many associations in the minds of people:
The firm can meet in a superior fashion. hamburgers, fun, children, fast food, and golden arches. These
Marketers and Prospects associations make up the brand image. All companies strive to build a
Another core concept is the distinction between marketers and strong, favorable brand image.
prospects. A marketer is someone who is seeking a response (attention, Value and Satisfaction
a purchase, a vote, a donation) from another party, called the prospect. In terms of marketing, the product or offering will be successful if it
If two parties are seeking to sell something to each other, both are delivers value and satisfaction to the target buyer. The buyer chooses
marketers. between different offerings on the basis of which is perceived to
Needs, Wants, and Demands deliver the most value. We define value as a ratio between what the
The successful marketer will try to understand the target market‘s customer gets and what he gives. The customer gets benefits and
needs, wants, and demands. Needs describe basic human requirements assumes costs, as shown in this equation:
such as food, air, water, clothing, and shelter. People also have strong
needs for recreation, education, and entertainment. These needs
become wants when they are directed to specific objects that might
satisfy the need. An American needs food but wants a hamburger,
French fries, and a soft drink. A person in Mauritius needs food but
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Exchange and Transactions television, mail, telephone, billboards, posters, fliers, CDs, audiotapes,
Exchange, the core of marketing, involves obtaining a desired product and the Internet. Beyond these, communications are conveyed by
from someone facial expressions and clothing, the look of retail stores, and many
By offering something in return. For exchange potential to exist, five other media. Marketers are increasingly adding dialogue channels (e-
conditions must mail and toll-free numbers) to counterbalance the more normal
be satisfied: monologue channels (such as ads).
1. There are at least two parties. The marketer uses distribution channels to display or deliver
2. Each party has something that might be of value to the other party. the physical product or service(s) to the buyer or user. There are
3. Each party is capable of communication and delivery. physical distribution channels and service distribution channels, which
4. Each party is free to accept or reject the exchange offer. include warehouses, transportation vehicles, and various trade
5. Each party believes it is appropriate or desirable to deal with the channels such as distributors, wholesalers, and retailers. The marketer
other party. also uses selling channels to effect transactions with potential buyers.
Relationships and Networks Selling channels include not only the distributors and retailers but also
Transaction marketing is part of a larger idea called relationship the banks and insurance companies
marketing. That facilitates transactions. Marketers clearly face a design problem
Relationship marketing aims to build long-term mutually satisfying in choosing the best mix of communication, distribution, and selling
relations with key parties— customers, suppliers, distributors—in channels for their offerings.
order to earn and retain their long-term preference and business.10 Supply Chain
Effective marketers accomplish this by promising and delivering high- Whereas marketing channels connect the marketer to the target buyers,
quality products and services at fair prices to the other parties over the supply chain describes a longer channel stretching from raw
time. Relationship marketing builds strong economic, technical, and materials to components to final products that are carried to final
social ties among the parties. It cuts down on transaction costs and buyers. For example, the supply chain for women‘s purses starts with
time. In the most successful cases, transactions move from being hides, tanning operations, cutting operations, manufacturing, and the
negotiated each time to being a matter of routine. marketing channels that bring products to customers. This supply
Marketing Channels chain represents a value delivery system. Each company captures only
To reach a target market, the marketer uses three kinds of marketing a certain percentage of the total value generated by the supply chain.
channels. When a company acquires competitors or moves upstream or
Communication channels deliver messages to and receive messages downstream, its aim is to capture a higher percentage of supply chain
from target buyers. They include newspapers, magazines, radio, value.
Competition
Competition, a critical factor in marketing management, includes all of
the actual and potential rival offerings and substitutes that a buyer
might consider. Suppose an automobile company is planning to buy
steel for its cars. The car manufacturer can buy from U.S. Steel or
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other U.S. or foreign integrated steel mills; can go to a mini mill such
as Nucor to buy steel at a cost savings; can buy aluminum for certain
parts of the car to lighten the car‘s weight; or can buy some engineered
plastics parts instead of steel.
Marketing Mix
Marketers use numerous tools to elicit the desired responses from their
target markets. These tools constitute a marketing mix: Marketing
mix is the set of marketing tools that the firm uses to pursue its
marketing objectives in the target market.
McCarthy classified these tools into four broad groups that he
called the four Ps of marketing: product, price, place, and promotion
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Value delivery Process: The traditional view of marketing is that the The Value Chain: - Michel Porter of Harvard has proposed the Value
firm makes something and then sells it; however this traditional view chain as a tool for identifying ways to create more customer value.
of the business process will not work in economies where people face According to this model, every firm is a synthesis of activities
abundant choices. Here the ‗mass market is actually splintering into performed to design, produce, and market, deliver, and support its
numerous micro-markets, each with its own wants, perceptions, product. The value chain identifies nine strategically relevant
preferences and buying criteria. activities – five primary and four support activities – that create value
This realization has put the Marketing at the beginning of the and cost in a specific business.
planning. Instead of emphasizing making and selling, companies now
see them as part of a value delivery process.
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2. The New-offering realization process: - All the activities in “People tend to be focused on their own regions first and do not
researching, developing, and launching new high-quality always understand the global context.” Grant Westbrook, Global
offerings quickly and within budget. Director of Marketing, Mintel Group Ltd
3. The Consumer acquisition process: - All the activities in Many worldwide campaign implementation models include an element
defining target markets and prospecting for new customers. of ‗adopt and adapt‘; but there is some debate about how best to
4. The Customer relationship management process: - All the achieve the best results.
activities in building deeper understanding, relationships, and 2. How to reach customers in a meaningful way
offerings to individual customers. That knockout creative concept that ticks all the boxes in one territory
5. The Fulfillment management process: - All the activities in may fall flat in another for any number of reasons. Adapting an idea to
receiving and approving orders, shipping the goods on time, suit different cultures and outlooks — while remaining true to the key
and collecting payment. messages behind the campaign — remains a major challenge for the
Strong companies are reengineering their work flows and building global brands we spoke to.
cross-functional teams to be responsible for each process. Ex: - At These creative, intellectual and emotional elements safely across
Xerox, a Customer Operations Group links sales, shipping, territories are one mighty task. But figuring out digital media on a
installation, service and billing so these activities flow smoothly into global scale — with all the technical, media and channel options
one another. available — makes the picture even more complex.
To be successful, a firm also needs to look for competitive advantages Our respondents see driving local consumer engagement at the highest
beyond its own operations, into the value chain of suppliers, possible level is an ongoing work in progress. Not surprising when you
distributors, and customers. Many companies today have partnered consider the differing levels of marketing maturity and digital
with specific suppliers and distributors to create a superior Value understanding, legal and regulatory issues and cultural subtleties
delivery network, also called Supply chain. across the globe.
For a more in-depth report on our research with big brand global
Marketing Challenges in Globalized economic Scenario marketing directors, download the full report.
1. Internal coordination of marketing activities 3. How to measure and report, learn and improve
“The global marketing challenge today is a challenge of execution.” The marketers we interviewed (including industry award-winners) all
Doug West, Global marketing Director, ex Rentokil-Initial reached the ‗top of the tree‘ by delivering consistent return on
The bigger the brand, the more links in the chain. Organizational HQs investment (ROI). As they look across the global brands and properties
have historically struggled with rolling out coordinated marketing they now manage, measuring and reporting on ROI takes on a new
campaigns across multiple territories. Today we have vastly improved complexity and some very significant budgets are at stake. Our
systems and communications, but also higher expectations for respondents haven‘t taken their foot off the pedal in the desire to
relevant, localized execution. How best to achieve maximum impact? provide transparent reporting. It‘s just that the task is bigger than ever.
Internal coordination of complex campaigns across business units "The biggest challenge with any global marketing role is ROI. It‟s
remains a key challenge on the desk for global marketers. more important than ever to show the value in what you do.” John
Bernard, multi award-winning Global Marketing Director, Firefox OS
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It‘s clear that working out rock-solid objectives with associated key Finally, global marketing directors must take into account the relative
performance indicators (KPI) at the outset is a ‗must-have‘ for growth positions and potentials for multiple markets.
balanced reporting. Yet, at the same time, global marketers have to be 6. Digital, social and the new marketing
able to ‗flex‘ the interpretation of data coming from several different How to integrate social into a wider campaign remains a focus for
environments to make it meaningful and digestible. Delivering many global marketers. Reliable reporting about the impact of social
consistent measurement across a multitude of channels and on awareness and sales remains elusive despite the deluge of data
geographies remains a challenge, particularly where boards demand available. Such reporting is sometimes hard to align with the more
short-term results. traditional ROI markers from advertising or direct marketing.
4. How to handle the creative development process “Digital media is forcing campaigns to be much more engaging. The
A key theme emerging from our research is the on-going hunt for new media is designed to allow people to talk back.” Ronnie Beltran,
global campaign consistency matched by seamless local relevance. Group Brand Strategist, Red Fuse Communications
There are differing schools of thought on how to achieve this; but the Marketers understand the value of social but it seems its unpredictable
mantra of ‗act global think local‘ remains a central tenet for global nature is harder to control.
marketing directors. 7. The role of technology in campaign creation and
Localization of the big idea for different territories is the default for all implementation
global brand guardians, but the methodology for doing so is somewhat There‘s a risk of letting technology lead the way, while it should
polarized. Whatever route people are taking, it‘s clear that localization merely be an enabler of creative ideas, following a strategic and
and a focus on smart implementation are firmly on the agenda when it operational vision.
comes to rolling out global creative that resonates wherever it lands. Digital Asset Management (DAM) remains a tactical challenge.
It adds up to a complex picture but one in which the best managers Brands are striving to maintain a centralized repository of marketing
find systems and partners to manage creative development for a wide assets. It‘s also important to know what assets are being used, what are
range of implementations. needed, when rights expire and so on.
5. Understanding customer wants and needs across different
segments
The need to align campaigns to differing cultural and social
sensitivities is well-established. It‘s just part of the jigsaw our
marketers need to piece together. But targeting messages on a global
scale also requires a deep understanding of how industries, geography
and demographics will affect messaging.
Brand affinity and buying preferences are affected further by the
relative strength of country economies — yet another layer of
complexity.
“The economic picture of different countries has to be factored in to
campaigns.” Cat all port, Head of Marketing Services, Rentokil Initial.
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Buying Motives: Buying motive is the urge or motive to satisfy a desire or refer to all those characteristics of a product, which induce a
need that makes people buy goods or services. Behind every purchase there buyer to buy it in preference to other products.
is a buying motive. Product buying motives may be sub-divided into two groups, viz., (1)
It refers to the thoughts, feelings, emotions and instincts, which arouse in emotional product buying motives and (2) rational product buying
the buyers a desire to buy an article. A buyer does not buy because s/he has motives.
been persuaded by the salesman, but s/he buys for the aroused desire in him A. Emotional Product Buying Motives:
or her. Motives should be distinguished from instincts. When a buyer decides to purchase a product without thinking over the
A motive is simply a reason for carrying out a particular behaviour and matter logically and carefully (i.e., without much reasoning), she is
not an automatic response to a stimulus, whereas instincts are pre- said to have been influenced by emotional product buying motives.
programmed responses, which are inborn in the individual and Emotional product buying motives include the following:
involuntary. Thus hunger is an instinct whereas desire to purchase 1. Pride or Prestige: Pride is the most common and strongest
pizza is a buying motive. According to Prof. D. J. Duncan, ―Buying emotional buying motive. Many buyers are proud of possessing some
Motives are those influences or considerations which provide the product (i.e., they feel that the possession of the product increases their
impulse to buy, induce action and determine choice in the purchase of social prestige or status). In fact, many products are sold by the sellers
goods and services.‖ Buying motives are can be divided by the by appealing to the pride prestige of the buyers. For instance, diamond
following way: merchants sell their products by suggesting to the buyers that the
possession of diamonds increases their prestige or social status.
2. Emulation or Imitation: Emulation, i.e., the desire to imitate
others, is one of the important emotional buying motives. For instance,
a housewife may like to have a silk sari for the simple reason that all
the neighboring housewives have silk saries.
3. Affection: Affection or love for others is one of the stronger
emotional buying motives influencing the purchasing decisions of the
buyers. Many goods are purchased by the buyers because of their
affection or love for others. For instance, a husband may buy a costly
silk sari for his wife or a father buy a costly watch for his son or
daughter out of his affection and love.
4. Comfort or desire for comfort: Desire for comfort (i.e.,
Product Buying Motives: comfortable living) is one of the important emotional buying motives.
Product buying motives refer to those influences and reasons, which In fact, many products are bought comfort. For instance, fans,
prompt (i.e. induce) a buyer to choose a particular product in refrigerators, washing machines, cushion beds, etc. is bought by
preference to other products. They include the physical attraction of people because of their desire for comfort.
the product (i.e. the design, shape, dimension, size, color, package, 5. Sex appeal or sexual attractions: Sex appeal is one of the
performance, price etc. of the product) or the psychological attraction important emotional buying motives of the buyers. Buyers buy and use
of the product (i.e. the enhancement of the social prestige or status of certain things, as they want to be attractive to the members of the
the purchaser through its possession), desire to remove or reduce the
danger or damage to life or body of the possessor, etc. In short, they
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Opposite gender. Men and women buy cosmetics, costly dresses, etc., Safes or safety lockers are bought by the people because they want to
because of this emotional motive, i.e., sex appeal. safeguard their cash, jewelries etc., against theft. Similarly, vitamin
6. Ambition: Ambition is one of the emotional buying motives. tablets, tonics, medicines, etc., are bought by the people because of
Ambition refers to the desire to achieve a definite goal. It is because of this motive, i.e. they want to safeguard their health and protect
this buying motive that, sometimes, customers buy certain things. For themselves against diseases.
instance, it is the ambition that makes many people, who do not have 2. Economy: Economy, i.e. saving in operating costs, is one of the
the facilities to pursue their college education through regular colleges, important rational buying motives. For instance, Hero Honda bikes are
pursue their education through correspondence courses. preferred by the people because of the economy or saving in the
7. Desire for distinctiveness or individuality: Desire for operating cost, i.e. petrol costs.
distinctiveness, i.e., desire to be distinct from others, is one of the 3. Relatively low price: Relatively low price is one of the rational
important emotional buying motives. Sometimes, customers buy buying motives. Most of the buyers compare the prices of competing
certain things, because they want to be in possession of things, which products and buy things, which are relatively cheaper.
are not possessed by others. Purchasing and wearing a particular type 4. Suitability: Suitability of the products for the needs is one of the
of dress by some people is because of their desire for distinctiveness or rational buying motives. Intelligent buyers consider the suitability of
individuality. the products before buying them. For instance, a buyer, who has a
8. Desire for recreation or pleasure: Desire for recreation or small dining room, naturally, goes in for a small dining table that is
pleasure is also one of the emotional buying motives. For instance, suitable, i.e. that fits in well in the small dining room.
radios, musical instruments, etc. are bought by people because of their 5. Utility or versatility: Versatility or the utility of a product refers to
desire for recreation or pleasure. that quality of the product, which makes it suitable for a variety of
9. Hunger and thirst: Hunger and thirst are also one of the important uses. Utility of the product is one of the important rational buying
emotional buying motives. Foodstuffs, drinks, etc. are bought by the motives. People, often, purchase things that have utility, i.e. that can
people because of this motive. be put to varied uses.
10. Habit: Habit is one of the emotional considerations influencing 6. Durability of the product: Durability of the product is one of the
the purchasing decision of the customers. Many customers buy a most important rational buying motives. Many products are bought by
particular thing because of habit, (i.e. because they are used to the the people only on the basis of their durability. For instance, buyers of
consumption of the product). For instance, many people purchase wooden furniture go in for teak or rosewood table, though they are
cigarettes, liquors, etc. because of sheer habit. costlier, as they are more durable than ordinary wooden furniture.
B. Rational Product Buying Motives: 7. Convenience of the product: The convenience of the product (i.e.
When a buyer decides to buy a certain thing after careful consideration the convenience the product offers to the buyers) is one of the
(i.e. after thinking over the matter consciously and logically), s/he is important rational product buying motives. Many products are bought
said to have been influenced by rational product buying motives. by the people because they are more convenient to them. For instance,
Rational product buying motives include the following: automatic watches, gas stoves, etc., are bought by the people because
1. Safety or Security: Desire for safety or security is an important of the convenience provided by them.
rational buying motive influencing many purchases. For instance, iron
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Patronage Buying Motives: Patronage buying motives refer to those Shop for the simple reason that they have been habitually making their
considerations or reasons, which prompt a buyer to buy the product purchases from that shop.
wanted by him from a particular shop in preference to other shops. In B. Rational Patronage Buying Motives:
other words, they are those considerations or reasons, which make a When a buyer patronizes a shop after careful consideration (i.e. after
buyer, patronize a particular shop in preference to other shops while much logical reasoning and careful thinking) he is said to have been
buying a product. Patronage buying motives also may be sub-divided influenced by rational patronage buying motives. Rational patronage
into two group‘s viz. a) Emotional patronage buying motives and b) buying motives include the following:
Rational patronage buying motives. 1. Convenience: Convenient location proximity of a shop is one of the
A. Emotional Patronage Buying Motives: When a buyer patronizes a considerations influencing the purchases of many buyers from a
shop (i.e. purchases the things required by him from a particular shop) particular shop. Many buyers, usually, buy their requirements from a
without applying his mind or without reasoning, he is said to have been near-by shop, as it is convenient to them to make their purchases.
influenced by emotional patronage buying motives. Emotional patronage Similarly, convenient working hours of the shop also influence the
buying motives include the following:
purchases of good many buyers. For instance, if a shop works for a
1. Appearance of the shop: Appearance of the shop is one of the longer period of time every day and even on Sundays, it will be very
important emotional patronage buying motives. Some people make convenient to the buyers. As such, many buyers may make their
their purchases from a particular shop because of good or attractive purchases from such a shop.
appearance of the shop,
2. Low price charged by the shop: Price charged by the shop also
2. Display of goods in the shop: Attractive display of goods in the influences the buyers to patronize a particular shop. If the price
shop also makes the buyers patronize a particular shop. charged by a shop for a particular product is relatively cheaper,
3. Recommendation of others: Recommendation of others also naturally, many people will make their purchases from that shop.
constitutes one of the important emotional patronage buying motives.
3. Credit facilities offered: The credit facilities offered by a store also
Some people purchase their requirements from a particular shop
influence the buying of some people from a particular shop. People
because that shop has been recommended to them by others, i.e., by
who do not have enough money to make cash purchases every time
their friends and relatives.
prefer to make their purchases from a shop which offers credit
4. Imitation: Imitation also is one of the emotional patronage buying facilities.
motives influencing the purchases of buyers. Some people make their
4. Services offered: The various sales and after-sale services, such as
purchases from a particular shop just because other people make their
acceptance of orders through phone, home delivery of goods, repair
purchases from that shop.
service, etc., offered by a shop also induce the buyers to buy their
5. Prestige: Prestige is one of the emotional patronage buying motives requirements from that shop. Rational buyers are, often, influenced by
of the buyers. For instance, some people consider it a prestige to take the various services or facilities offered by the shop.
coffee from a five-star hotel.
5. Efficiency of salesmen: The efficiency of the salesmen employed
6. Habit: Habit is also one of the important emotional patronage by a shop also influences the people in patronizing a particular shop. If
buying motives. Some people make their purchases from a particular
the employees are efficient and are capable of helping the buyers in
making their purchases, people naturally would flock to such a shop.
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Family Buyer behavior is strongly influenced by the member of a such as: dominance, aggressiveness, self-confidence etc. which can
family. Therefore marketers are trying to find the roles and influence be useful to determine the consumer behavior for particular
of the husband, wife and children. If the buying decision of a particular product or service.
product is influenced by wife then the marketers will try to target the 4. Psychological
women in their advertisement. Here we should note that buying roles Factors There are four important psychological factors affecting
change with change in consumer lifestyles. the consumer buying behavior. These are: perception, motivation,
Roles and Status each person possesses different roles and status in learning, beliefs and attitudes.
the society depending upon the groups, clubs, family, organization etc. Motivation The level of motivation also affects the buying
to which he belongs. For example a woman is working in an behavior of customers. Every person has different needs such as
organization as finance manager. Now she is playing two roles, one of physiological needs, biological needs, social needs etc. The nature
finance manager and other of mother. Therefore her buying decisions of the needs is that, some of them are most pressing while others
will be influenced by her role and status. are least pressing. Therefore a need becomes a motive when it is
3. Personal Factors Personal factors can also affect the consumer more pressing to direct the person to seek satisfaction.
behavior. Some of the important personal factors that influence the Perception Selecting, organizing and interpreting information in a
buying behavior are: lifestyle, economic situation, occupation, age, way to produce a meaningful experience of the world is called
personality and self-concept. perception. There are three different perceptual processes which
Age and life-cycle have potential impact on the consumer buying are selective attention, selective distortion and selective retention.
behavior. It is obvious that the consumers change the purchase of In case of selective attention, marketers try to attract the customer
goods and services with the passage of time. Family life-cycle consists attention.
of different stages such young singles, married couples, unmarried Whereas, in case of selective distortion, customers try to
couples etc. which help marketers to develop appropriate products for interpret the information in a way that will support what the
each stage. customers already believe. Similarly, in case of selective
Occupation The occupation of a person has significant impact on his retention, marketers try to retain information that supports
buying behavior. For example a marketing manager of an organization their beliefs.
Will try to purchase business suits, whereas a low level worker in the same Beliefs and Attitudes Customer possesses specific belief and
organization will purchase rugged work clothes. attitude towards various products. Since such beliefs and
Economic Situation Consumer economic situation has great influence on attitudes make up brand image and affect consumer buying
his buying behavior. If the income and savings of a customer is high then behavior therefore marketers are interested in them. Marketers
he will purchase more expensive products. On the other hand, a person with can change the beliefs and attitudes of customers by
low income and savings will purchase inexpensive products. launching special campaigns in this regard.
Lifestyle of customers is another import factor affecting the consumer What is Consumer Buying Behavior?
buying behavior. Lifestyle refers to the way a person lives in a society and Definition of Buying Behavior: Buying Behavior is the
is expressed by the things in his/her surroundings. It is determined by decision processes and acts of people involved in buying and
customer interests, opinions, activities etc. and shapes his whole pattern of using products. Need to understand:
acting and interacting in the world. Why consumers make the purchases that they make?
Personality changes from person to person, time to time and place to place. What factors influence consumer purchases?
Therefore it can greatly influence the buying behavior of customers. The changing factors in our society.
Actually, Personality is not what one wears; rather it is the totality of
behavior of a man in different circumstances. It has different characteristics
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Consumer Buying Behavior refers to the buying behavior of the buying decision. By gathering information from relevant
ultimate consumer. A firm needs to analyze buying behavior for: sources, the consumer can learn about different products and
Buyer‘s reactions to a firms marketing strategy has a great brands available in the market.
impact on the firm‘s success. 3. Evaluation of Alternatives-- In the former stage, the
The marketing concept stresses that a firm should create a consumer has collected information about certain brands. Now, he
Marketing Mix (MM) that satisfies (gives utility to) customers, undergoes evaluation of brands. He cannot buy all of them.
therefore need to analyze the what, where, when and how Normally, he selects the best one, the brand that offers maximum
consumers buy. satisfaction. Here, he evaluates competitive brands to judge which
Marketers can better predict how consumers will respond to one is the best, the most attractive. Evaluation calls for evaluating
marketing strategies. various alternatives with certain choice criteria.
Stages of the Consumer Buying Process Following criteria are considered while evaluating alternatives:
Six Stages to the Consumer Buying Decision Process (For complex 1. Benefits offered by the brands
Decisions). Actual purchasing is only one stage of the process. Not all 2. Qualities, features or attributes, and performance
Decision processes lead to a purchase. All consumer decisions do not 3. Price changed by various brands
Always include all 6 stages, determined by the degree of 4. History of brands
Complexity...discussed next. 5. Popularity, image or reputation of brands
The 6 stages are: 6. Product-related services offered by the brands, such as
1. Problem Recognition (awareness of need)--difference between the after-sales services, warrantee, and free installation
desired state and the actual condition. Deficit in assortment of products. 7. Availability of brands and dealer rating.
Hunger--Food. Hunger stimulates your need to eat. Can be stimulated
by the marketer through product information-- did not know you were 4. Purchase decision-- This is the stage when the consumer
deficient? I.E., see a commercial for a new pair of shoes, stimulates prefers one, the most promising band, out of several brands. The
your recognition that you need a new pair of shoes. former stage helps consumers evaluate various brands in the
2. Information search-- choice set. The brand that offers maximum benefits or
o Internal search, memory. satisfaction is preferred.
Simply, the most attractive brand, that can offer more benefits
o External search in relation to price paid, is selected by comparing one brand
Mostly, the consumer can try one or more of following sources of with others. Comparison shows superiority/inferiority of the
information: brands.
i. Personal Sources: They may include family members, friends, Now, consumer makes up his mind to purchase the most
package, colleagues, and relatives. preferred brand. However, three factors further affect whether
ii. Commercial Sources: Advertising, salesmen, dealers, package, trade buying intension result into actual purchase. More clearly, the
show, display, and exhibition are dominant commercial sources. consumer‘ decision to avoid, modify, or postpone a purchase
iii. Public Sources: Mass media (radio, TV, newspapers, magazines, decision is influenced by these factors.
cinema, etc.), consumer- rating agencies, etc., are main public sources. The first factor is attitudes of others. The impact of other
iv. Experimental Sources: They include handling, examining, testing, persons‘ attitudes depends on degree of their negative attitudes
or using the product. Selection of sources depends upon personal toward the consumer‘s preferred brand, and consumer‘s degree
characteristics, types of products, and capacity and reliability of sources. of compliance with other persons‘ wishes.
Each information source performs different functions in influencing
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The second factor is unanticipated situational factors. Purchase intension Motivated to seek information about a certain products and
may change due to certain unanticipated situational factors like price brands but virtually ignores others.
hike, loss of job, family income, major medical expenses, non- High involvement purchases--Honda Motorbike, high priced
availability of the preferred brand, or such similar factors. goods, products visible to others, and the higher the risk the
The third and the last factor is consumer‘s perceived risk. Degree of risk higher the involvement. Types of risk:
depends on price, attribute uncertainty, entry of a new superior product, Personal risk
and his self-confidence. Social risk
Economic risk
5. Purchase--May differ from decision, time lapse between 4 & 5 High Low
product availability. Involvement Involvement
6. Post-Purchase Evaluation--outcome: Consumer buys the product
with certain expectations. Though he decides very systematically, there is
Significant
no guarantee of a complete satisfaction. There is always possibility of Difference b/w
variation between the expected level of satisfaction and the actual Brands
satisfaction. His subsequent behavior is influenced by degree of
satisfaction/dissatisfaction. Satisfaction or Dissatisfaction.
Few
PROBLEM differences
RECOGNITION b/w brands
INFORMATION
SEARCH The types of consumer buying behavior are:
Routine Response/Programmed Behavior/habitual
EVALUATION OF buying decision/straight rebuy--buying low involvement
ALTERNATIVES frequently purchased low cost items; need very little
search and decision effort; purchased almost
PURCHASE automatically. Examples include soft drinks, snack foods,
DECISION
milk etc.
Limited Decision Making/ dissonance –reducing
PURCHASE
buying/modified Buy--buying product occasionally. When
you need to obtain information about unfamiliar brand in a
POST PURCHASE familiar product category, perhaps. Requires a moderate
EVALUATION
amount of time for information gathering. Examples
include Clothes--know product class but not the brand.
Types of Consumer Buying Behavior Extensive Decision Making/Complex high
Types of consumer buying behavior are determined by: involvement/complex buying decision: unfamiliar,
Level of Involvement in purchase decision. Importance and expensive and/or infrequently bought products. High
intensity of interest in a product in a particular situation. degree of economic/performance/psychological risk.
Buyers level of involvement determines why he/she is Examples include cars, homes, computers, education.
Spend alot of time seeking information and deciding.
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Information from the companies MM; friends and relatives, Aware of substitutes to the Industry
store personnel etc. Go through all six stages of the buying Disruptive Innovation
process. Conclusion
Variety seeking buying decision To ensure continued growth for the company, concentrate on
Impulse buying, no conscious planning. meeting customer‘s needs rather than selling products
The purchase of the same product does not always elicit the same Buying It‘s good if the business organization is suffering
Behavior. Product can shift from one category to the next. For example: hypermetropia rather than myopia.
Going out for dinner for one person may be extensive decision making (for
someone that does not go out often at all), but limited decision making for
someone else. The reason for the dinner, whether it is an anniversary
celebration, or a meal with a couple of friends will also determine the
extent of the decision making.
Marketing myopia
Understanding Marketing Myopia Term coined by Theodore
Levitt
Refer to the short sightedness
The marketer wants to sell the product and services, without
much focusing on the customer demands/needs.
Understanding Marketing Myopia
Also can be defined by: Marketing Myopia is narrow minded
approach to a marketing situation where only short-range goals
are considered or Where the marketing focuses on only one
aspect out of many possible marketing attributes
Can be prevented: Product Concept – Myopia
Marketing Concept - No Myopia
Causes
Company thinks, its growth is guaranteed by expanding
population
Believe there is no competitive substitutes
Mass Production- Not concentrating on the needs of the
customer
Focusing on product rather than the customer (Lacking
Innovation) not considering the changing consumer lifestyle
in digital age
How to Avoid Myopia
Solution Centric focus
Customer Centric
Marketing is not only about selling
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Business Markets and Business Buying Behavior
Business Markets
Business Markets
Market Structure and Demand
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The Buying Process
Buying center is all of the individuals and units
that participate in the business decision-making
process
Users Business Buyer Behavior
Influencers
Buyers Problem recognition occurs when someone in the company
Deciders
recognizes a problem or need
Gatekeepers
Internal stimuli
Users are those that will use the product or service
Need for new product or production equipment
External stimuli
Influencers help define specifications and provide information Idea from a trade show or advertising
for evaluating alternatives
General need description describes the characteristics and
quantity of the needed item
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E-Procurement
Online purchasing
Company-buying sites
Extranets
Advantages
Access to new suppliers
Lowers costs
Speeds order processing and delivery
Shares information
Sales
Service and support
Disadvantages
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