Chapter 05 - Analyzing Consumer Markets and Business Markets

 


When a customer buys a product or a service, he will consider different factors before making the purchase decision. Not only retail customers, but also the business customers undergo different factors before making the purchase decision. In other words, we, as marketers, offer our products and services to consumer and business markets. Marketers need to concentrate on different factors which influence consumer behavior, before preparing the marketing strategies.

 

Factors influencing consumer behavior

  • Cultural factors
  • Social factors
  • Personal factors

 




Cultural factors: Nationalities, religions, racial groups, geographic regions

Social factors: Reference groups, family (family life cycle), social roles, statuses (doctors, judges)

Personal factors: Motivation, perception, learning, memory

 

Marketers need to concentrate on the above all factors to identify their target markets and customize their offerings. Specially, when the business expanding their operations towards global level, they need to strictly follow those factors in relevant countries before they start their operations. On the other hand, when the business enters new markets, they need to closely monitor the changes happening in those factors in order to tailor-made the product range accordingly.

 

It is not only the consumer markets that marketers are serving, but they also cater for the business consumers at the same time. But doing business with corporate clients or the business community is totally different from the consumer markets. Because they have different procedures for purchasing goods and services from other businesses. And there is a high possibility of changing the preferences of those business customers since they also work for profits and try to reduce costs at any given time. At the same time, they are concerned about the quality of the raw material if they are concerned about a quality output. Hence, the marketers should adhere to their guidelines and procedures when transacting with them. On the other hand, when the business organization deals with government organizations, the process will be another way which takes long time to execute the deal with the government.

 

In the product market, it is possible to customize the products according to different influences of consumer buying behavior. However, it is quite difficult to customize the offerings in the service market since the service market is purely based on the people who provide the service. The quality of the service will vary according to the knowledge, skills and attitudes of the salesperson. On the other hand, in the service market, even though the company has designed a very productive offering for customers, sometimes the customer responses will be negative because of poor service delivery of the person who provided the service.

 

However, there are some industries like banking and finance, when they develop a new product, they need to pay more attention towards cultural and social factors specially in Asian countries. Because there are some restrictions in some religions and some communities when doing financial transactions.


Example

In Sri Lanka, there are different religious communities among 20 million population. They have different cultures, subcultures, languages etc. There are more than 15 Licensed Commercial Banks which offer numerous services to those communities. When a bank is developing a new banking product for the customers, they specifically look at the combination of the generations in society, knowledge in modern technology, income levels, sometimes religious factors etc. Since the country is a developing country, still there are people who do not have access to modern technology due to mainly the un-even distribution of income in society. However, those people also need to do banking. In that scenario, banks must be careful when launching a new product or service to the industry, since there are limitations in some segments.

On the other hand, in Sri Lanka, there are considerable amount of people who belong to Islamic community located in different parts of the country. They are governed by different sets of rules by their religion. Some of them prefer separate services for women, specially in banking. Hence, there are specialized banks who provide special services to these kinds of customers. Most of the private sector banks have separate products and services for those communities without any differentiation.

Apart from the above factors, banks need to understand the special requirements in different geographical areas such as coastal areas, central region, metropolitan areas etc. The central region of the country is famous for the best product ever “Ceylon Tea”, and most of the areas in the hill country are covered by green tea leaves. Banks in those areas are responsible for canvassing more agricultural products and services like agriculture-based savings accounts, special loan schemes, other facilities like pawning etc.

 

 

References

1. 1. Avgeropoulos, I (n.d.). Marketing Planning: Analyzing Consumer Markets and Business Markets (PPT). Chapter 5 - Analyzing Consumer Markets &; Business Markets.pptx (sharepoint.com)

 

 

 


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