So You Think You Know Everything Now?!

Hopefully the contents of this blog has provided some form of insight into how to understand your customer, and the methods and tools which can help you to do so. Although this blog has covered everything from perceptions, to nostalgia, to culture and to influencers of purchases, it is impossible to ever know everything! This is why businesses make mistakes as well as successes, nobody knows everything...even the ones who like to think they do!

Whilst researching for various other bits throughout this blog, I came across a video on youtube that is quite interesting but has never been able to be put in any of my postings...so I will dedicate this posting especially for it! It shows a number of marketing ideas, some that have been used, some that haven't, either way, they are all very clever...

Business to Business Marketing

Business-to-business marketing is currently one of the fastest-growing areas of marketing. As technology brings more businesses together, companies are beginning to interact with each other far more aggressively. eSSORTMENT [online]

Business to business marketers promote goods and services that will help other companies run. Some of the things businesses produce for other businesses include equipment, components, raw materials, processing services and supplies.

There are 3 main different types of organisation that deal in business to business buying and selling, these are:

• Government organsiations (health and education etc)


• Institutional organisations (not for profit, charities etc)


• Commercial organisations (distributors and retailers etc)

The most common business-to-business markets are manufacturers, resellers, the government and non-profit institutions. Most businesses that fall into these categories do make some money from a consumer base; however, the majority of their capital is made from other businesses.

An example of this is a non-profit institution. While private donations from individuals like you and me is important to a non-profit's operations, most charitable organizations make the majority of their money from corporations or through government funding. Because of this, non-profits must make themselves and their products and services attractive not just to individuals, but also to other businesses.

Kotler's Buyer Decision Model is a vey important concept that businesses follow when considering selling/purchasing to or from another business. Whilst a consumer may miss out the middle stages of Kotler's process when buying something on impulse or heuristically, a business will follow each step thoroughly because of the high risk that the purchase or sale may hold.

Whereas sales promotion may be used in business to consumer marketing, with B2B, personal selling is a more common method used. This can help build and strengthen relationships between businesses and create a more personal selling style. This method of selling helps to form good customer relationship management, without a close relationship between businesses, sellers and purchasers may look elsewhere for business.

Advantages of personal selling are:

• There is a relatively high degree of personal attention given to the prospective buyers.


• The sales message can be customised to meet the needs of the customer.


• Questions and concerns can be answered promptly and directly.


• Frequent face to face meetings help to build strong long term relationships.

Using personal selling for a public consumer rather than with a business would mean that a very small sector of the market could be targeted at one time, the message would only be given out to a few people rather than a mass of the population. This is why a method such as sales promotion is used more widely with consumers, it reaches a large proportion of the market quickly, with little effort needed by the sales team. Personal selling however requires a lot of effort and works well for B2B, as a business will only want to focus on one company at a time to give them their upmost attention, hoping to build strong and personal relationships with potential high expenditure buyers.

There are a number of factors that a business will consider when choosing a company to buy from or sell to. These factors affect something called the demand elasticity. The more businesses offering the same product at competitive prices, the more elasticity and flexibility with the decision of who to choose.

One factor is the availability of substitutes. The more substitutes, the more elastic the demand will be. So long as the substitutes are selling for prices at a competitive rate, the potential companies that are looking to buy will not be choosing by the price factor, but by how the business impresses them. This is why businesses selling to other businesses need to make themselves look appealing and advertise themselves to be one step above the rest. Personal selling is therfore a good way of communicating their strengths directly to the potential buyer.

The amount of income available to spend on the good also affects elasticity. If the price of the good increases but the budget for expenditure does not, this will trigger an elastic reaction in demand. Demand will be sensitive to a change in price if there is no change in income available to be spent.

Leasing a product is also an option if there is not enough funding available to buy the product outright. This may be the case for high technology products that require a lot of money to buy, as well as porducts that will become obselete too quickly after being purchased.

The amount of potential clients the product can target is a huge factor that affects how close the buyer-seller relationship is. If there is a product that appeals to most of the population, it is not so vital to create and sustain high and close relationsips with the buyers. If the product however is only relevant for a minority target group, customer relationships are going to be very important due to the fact that the sellers of the product cannot afford to lose their potential and current buyers.

If you want to find out whether you have the potential to work in the field of B2B, have a look at this link. It is a small quiz to find out whether you would go the right way about clsoing a deal with another firm. BNET send me their daily newsfeed and today it was this...good timing or what! I dont think B2B selling is for me! Read through the scenario and then follow the steps!

Culture

Culture, although there is no standard definition can be described as,

"The system of shared beliefs, values, customs, behaviours, and artefacts that the members of society use to cope with their world and one another, and that are transmitted from generation to generation through learning". Bates and Plog

Ralph Linton defines culture as "the configuration of learned behaviour and results of those behaviours whose component elements are shared and transmitted by members of a particular society."

Culture is global, shared, transmissable and constantly evolving. It is buit up from people's perceptions of right and wrong (marriage, religion, law etc), family values, society's values and attitudes, community learning and communal or collective memory.

Cultural differences manifest themselves in different ways and differing levels of depth. Symbols represent the most superficial and values the deepest manifestations of culture, with heroes and rituals falling inbetween the two.

Because different cultures have such vast differences in beliefs and ways of life, it can be very hard for a marketer to appeal to a potential audience across a number of cultural boundaries. An article looking at international market research suggests that there are 5 factors that need to be considered when marketing to different cultures. These are:

• Personality - it is important to adjust your message to suit the personality of the chosen target market.


• Wealth - the average household income varies dramatically across cultures and this has a huge impact on consumer habits. Is important to evaluate how consumer wealth impacts your target market’s habits for your product or service? This often explains why something does not sell well in a particular country, but will be extremely popular in another.


• Consumer habits - these can be affected by a number of different factors which the marketer would need to thoroughly research to see what makes certain cultures buy and others not.


• Language - If the target market for your product/service is aimed across cultures, the language barrier will be one of the biggest issues to conquer. Some marketers may only use music and imagery to show their message, this means the visuals have to be extremely strong in getting the desired message across which may be difficult as different cultres will interpret messages in different ways according to their ways of thinking. HSBC are a worldwide company, therefore needing to appeal across many cultures. One of their ways to do this is the use of advertising and symbols used across the world meaning the same thing, this therefore eliminates confusion as to the message being given.

• Age - the age of your ideal clients in one market may be different in another market. Different generations also act differently in different countries. Each age group will have different characteristis and roles in each country and culture.

Culture is made up of 3 different components, these being beliefs, values and customs, marketers need to be aware of how these 3 aspects affect different cultures and respond accordingly. One example could be that of Macdonalds responding to the fact that in India cows are said to be sacred, therefore they have adapted to the culture by selling "no beef" hamburgers. Amit Jatiya from the restaurant industry in India comments, "McDonald’s has respected our local culture. Meat and vegetarian processing and cooking are segregated."

A recent article from Marketing Week looks at hows the current recession is affecting different countries and their purchasing habits. They also carried out a number of surveys to determine what it is that makes a consumer choose their shops. It seems from this graph that marketers for all countries and cultures need to focus on promoting how the shops provide value for money rather than their quality or image.

Hofstede carried out IBM based research to look into finding an explanation for the variations in culture across national boundaries. He used factors to base his findings on. These were; power distance, uncertainty avoidance, masculinity/femininity and indiviualism/collectivism. The results for Great Britain came back as being predominantly focused on masculinity and individualism. This suggests that the ability for change is a lot easier and faster than across other countries and cultures.

Hofstede comments, "for those who work in international business, it is sometimes amazing how different people in other cultures behave. We tend to have a human instinct that 'deep inside' all people are the same - but they are not. Therefore, if we go into another country and make decisions based on how we operate in our own home country - the chances are we'll make some very bad decisions."

This is very a important concept for marketers to consider. Looking at Macdonalds again, if they went to India and did not take into consideration the fact that beef and pork are meats that are not eaten, their attempt to expand their worldwide empire into that culture would more than likely fail, bringing bad publicity with it for not being considerate of the cultural beliefs.

One factor that needs to be taken into consideration for selling products and services is where they are going to be placed in the market. In England for example, it is easy for us to click onto the internet and buy flight tickets, or get in the car and drive to the local travel agents. In India however, the luxury of a car and internet access that we take for granted are not so easy to come by. This is why certain airlines sell their plane tickets in grocery stores; places which are both easy to reach and frequently visited by the public.

Some of the key differences across cultures are, the concept of language and meaning. For marketers this can mean vast amounts of research is needed, colours, symbols and actions are amongst many things that can all be interpreted in different ways by different cultures; in one country you could be complimenting someone, whereas in another, you could be portraying a sign of upmost rudeness. Non verbals are also important to consider when dealing with different cultures, for some, the shaking of hands is seen as an act of being polite, in others, it is an insult to be touched by anyone but your husband/wife. This again is imporant for marketers to consider when trying to place their produt or service globally. If a marketer goes to a meeting to discuss their product and their mannerisms are inappropriate for that culture, it could jeopardise the success of their produt in that country.

Social Class

"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

Britain was once a class-ridden society. Class was a staple part of the British way of life. Today, multiculturalism and a changing economy are gradually eroding the British class system, but some features of the system still remain. Mandy Barrow [online] 2009

Over time, the views of the different classes has slowly evolved and become a lot broader than in the past. At the turn of the century, there were only seen to be 3 different class types. These were: working and lower class (the majority), middle class, and upper class (a tiny proportion).

In today's society, sub classes have been created due to people not feeling that they belonged in either of the previous 3 classes. Today, the different social class categories are: poverty class, upper lower class, working class, lower middle class, middle middle class, upper middle class, and upper class.

As you can see, where before there was just one class that you could fit into, there are now up to 3 classes within that one class. For example, there was the time when you could only be middle class...today, there are 3 different types of middle class!

In societies where classes exist, there are a number of ways in which people make assumptions of peoples social rankings. These may be physical characteristics which may indicate class such as their clothing, their manners and their language. Alternatively attributes that arent apparant from appearance and mannerisms that are used to judge social class could be; income or wealth, occupation, level of education, or family background.

There has been a social class system scale put into place by which people can rank themselves according to the class that they think they best fit into. This scale is as follows:

• A - Upper Middle Class
• B - Middle Class
• C1 - Lower Middle Class
• C2 - Skilled Working Class
• D - Working Class
• E - Lower Class

There is a short quiz that can be taken in order to establish your class type. This is quite interesting to take part in as the result the quiz comes back with may not be the class type that you previously had perceived yourself to be. The quiz bases its questions around political views, personal aspirations, wealth and self image. I got my dad and his brother to partake in this quiz in order to see whether being related and growing up together meant they shared the same class type. The results were very interesting, my dad came out to be of luxurious upper class (yeah right!!) and my uncle as middle class. These outcomes show how social class is able to change over time, and just because you are born into a certain social class doesn't necessarily mean that it is the class that you have to stay in forever.

In a recent article taken from The Independent, the role of social class has said to play a big part in education and children's exam results. "The performance of a school and a child in it is highly linked to social class". This shows that although social class doesnt play such a major role like it has done previously, it is still looked upon as very important in the success of the younger generation, which in time are going to be the ones to shape and create our future population. Richard Garner [online] 2008

It is now extremely flexible to move through the social classes in situations such as marriage, there are no legal rules as to who can marry into whose family, meaning that the social class you are born into may not be the social class that you fit into for your whole life. This was extremely different in the 1800's, where social classes had no contact with each other what so ever. In Jane Austen's novel Emma, social class is one of the main aspects highlighted throughout the story. The main focus of the book is finding a suitable husband, and how social class gets in the way of marrying for love rather than status. One quote that shows how strong the barriers were between the classes is talking about a potential husband that is assumed to be of too lower class even to be considered; "The yeomanry are precisely the order of people whom I feel I can have nothing to do with" Jane Austen 1816

Although people today can easily change their social class by marriage inot families of different status's, people are still very much judged on the class that they were born into. For instance a person may have been born into a working class family, and then marry into an upper class family, therfore changing their status. However the fact that they were originally born into a working class family will always be remembered, and that person may be judged on the basis of their original class type rather than their acquired one.

People maybe judged on the basis on what they have got in terms of tangeable possessions as well as how long they have had them for. The longer something of value (either a status, a job or an item, house, car etc) has been owned, the stronger it makes your social class seem.

One question that should be asked when considering class types is, "can income be used as a sufficient indicator of social class?" This question is quite interesting as some people may perceive wealth to mean high social class, but this perception can sometimes be misleading.

Mickey Carroll, a former "Chav" won an astronomical £9.7 million pounds after playing the national lottery, does his new found wealth portray him to be a higher upper class member of society? I think not! This video helps to show how the man who won into fame and money has not been looked upon in any different way than we was as a 21 year old dustbin man. An article from the Evening standard written shortly after his win, also highlights how money does not necessarily buy class.

It is important for markters to consider both social status and income when placing their products on the market, (especially those products such as houses, cars and even fridge freezers) because as Mickey Carroll shows, you dont have to be of high social class to live a wealthy and lavish lifestyle. This one off example may suggest that marketers need to decide whether they want their product to appeal to a person of high social class with wealth, or whether they want to appeal to the Mickey Carrolls of the world, lots of money but little class.

Have a read of this article from The Daily Mail, today. It is highlighting how the government are a reason for children from working class homes underachieving, leading to a 'lost generation'.

Pester Power!

"The emergence of a child-centered society in which parents prioritise the wants and needs of their children means that many parents are focused on pleasing their children". Mintel [online] 2008

Children of today have more autonomy and decision-making power within the family than in previous generations. The result of this is that children are extremely vocal about what they want their parents to buy. "Pester power" refers to children’s ability to nag their parents into purchasing items they may not otherwise buy. This "Pester power" can therefore be used to marketers advantages.

The following youtube clip shows how adverts aimed at children can be extremely misleading. Maybe if all children watched this video, it would make them change their minds about nagging away to their parents for something that they see advertised and reeeeeeally want! Things dont always live up to expectations...

In the 1960’s, children influenced an estimated $5 billion worth of parental spending. This figure grew to 20 billion by the 1970’s, 50 billion by 1984, 132 billion by 1994 and 188 billion by 1997. These statistics may be worrying for parents, but for marketers and advertisers, it proves a brilliant opportunity to target these key influencers of family expenditure.

Kidfluence, a book published in 2001, talks about the difference between persistance and importance. Persistance nagging (pleading over and over again) seems to be fairly ineffective according to parents. Importance nagging however seems harder for parents to ignore. This type of nagging appeals to parent's desire to provide the best for their children, and plays on any guilt they may have about not having enought time for their children. This may be more apparent in the working parents as these will be spending less time during the week and possibly weekends with their family.

Piaget, a psychologist has a theory of intellectual development in children and suggests that unitl children reach the age of 15, they are not capable of reasoning as an adult. This may mean that although a child watching the ads on TV feels that they understand the concept of selling and pursuasion, they may not fully understand that advertisments are put in place to manipulate consumers into wanting their goods.

Between the ages of 4 and 7, Piaget states that children are working through an intuitive phase. This is where the child will have an intuitive grasp on some logical concepts, but will still only be able to focus on one aspect of an objet whilst ignoring others. In terms of marketing, this may mean that a child will pick up on the most desirable aspect of a product and not pay attention to any other detail which a parent obviously would. As the child gets older, gradually their sense of logic improves and allows them to move into adulthood.

A study conducted by the Center for a New American Dream in 2002 produced statistics that reinforced the marketers belief in pester power (and made parents cringe):

• American children aged 12 to 17 will ask their parents for products they have seen advertised an average of nine times until the parents finally give in.
• More than 10 percent of 12- to 13-year-olds admitted to asking their parents more than 50 times for products they have seen advertised.
• The nagging strategy is paying dividends for kids and marketers alike: 55% of kids surveyed said they are usually successful in getting their parents to give in.

One reason for continual nagging may be the pressure that children come across in the playground. With children basing their friendships so much on material factors such as who has the best gadget, the shiny pokemon cards, and the latest fashion accessory, there is a huge demand to always have the new 'up and cool' brand. Having the right or wrong brand can be as important as determining which friendship group you can or cant belong in. Marketers can be partially blamed for this as they are using this weakness in children to market their product as something that is 'needed' if you want to be cool.

Family...who has the last word?

Unlike this family who has not a worry in the world about who will go and do the weekly shop, or which brand to pick in order to keep up with the Jones and keep the rest of the family happy, millions of families, no matter how big or small influence each other when it comes to making purchase decisions. This is why it is so important for marketers to cater for all family members when trying to sell their product. The more members of the family they can appeal to, the more chance of purchases being made.

There are a number of different family types that marketers needs to be aware of:

• The Nuclear Family - the Mother, Father and Children all live together



• Extended Family - the nuclear family plus other family members such as grandparents



• Family of Orientation - the family you are born into



• Family of Procreation - the family founded through marriage

National statistics show that the number of single parent families has increased to a massive 1 in 7. For marketers, this may mean that depicting products as value for money may be more effective as these families tend not to have as mch disposable income. The use of promotion in supermarkets may be the best method of marketing to this family type.

There is also an increase in the number of step families, this could mean that the household grows in number of both adults and children. As a result, shopping budgets could be reduced as a result of caring for more people, alternatively, more money may be spent on the children to try and do what may be seen as 'buying their happiness' in order to help them adjust to the new family structure.

This may also result in the parents of the family giving their children more responsibility and say in purchases that are made, whether for the family as a whole, or for the children as individuals.

This table shows just how powerful children in the household are when it comes to making purchasing decisions. The type of purchases they have the highest say in as shown above is clothing, however, even when it comes to purchasing groceries, children seem to have an 82% influence about what is put in the trolley. For marketers, this shows how advertising thier products in a way that children can understand may be beneficial to them. If the children are impressed with the product, it is likely that parents may be subjected to heavy influence and make purchases based on their children's suggestions.

Some more issues affecting how families consume their products are; the number of children in the household, the children's ages, and how many adults are employed outside the home.

Field (1969) identified 3 diamensions to determine relative influences of husband, wife and child:

• Discernment - technical know how


• Price - Expensiveness, who is paying?


• Satisfaction - who is using the product in question?

Marketers need to understand who the deision maker is in the home, so that they can market their message in a suitable and effective way. They need to establish who keeps tracks of family outgoings and bills, who earns the money and who spends it, and who is the dominant and decision making figure in the family.

Research shows how children influence many family purchases for products other than toys. Children are also exposed to a high level of television viewing so are likely to see more advertisments than other groups. This therefore may suggest that marketers should make their adverts shown on TV child friendly and orientated.

This diagram shows who makes decisions for different categories of purchases. From looking at the data, it is clear that women in the home are the decision makers for the everyday purchases, whereas men take on the role of DIY expert and choose all the hardware and garden related purchases. This may be due to the fact that DIY products tend to be marketed in a very factual or technical way; gobeldygook language for most women, meaning that the decision making is done by the person who understands best about this kind of thing - males!

Research into advertising for the sexes has also shown how men prefer to be presented with facts and figures rather than detail. This can therefore help to explain why the hardware type products are purchased by the men in the family, and the products that are promoted by in depth explanation and description are purchased by women.

Generational Marketing

(All 4 generations of my family!)

A person's age impacts on his or her identity, and often on spending patterns. This is why it is so important for marketers to clearly identify the effective ways of marketing to the different generations in order to get the maximum response they can. If every generation was targeted with the same marketing methods, not everyone would necessarily respond.

The different generations have been classified into a number of groups. These are:

Traditionalists - born between 1925 and 1946

Baby Boomers - Born between 1947 and 1963

Generation X - Born between 1964 and 1981

Generation Y - Born between 1982 and 2000

"The major events and historical conditions each of us experience as we grow up have a significant influence on both our attitudes and behaviors. Different generations typically share fads, historical events, music, technology, heroes and other cultural experiences". Bnet [online] 2007

This above statement can be taken and used by marketers who can research the experiences that the different generations will have shared in order to make their marketing more personal and effective to their target group.

Major historical events would have affected the different generations in different ways, therefore altering individual value and belief systems. For marketers, it is important to take this on board, if marketing methods dont relate to the target audience's values and beliefs, the response will more than likely be ineffective. If the target market cannot relate to the marketing they are being bombarded with, will they take any notice?

Because of how society is changing, marketers have had to continuously adapt their methods to suit their potential targets. Hovis have been producing bread for decades, here are some of their past and present adverts to show how much they have changed their advertising over the years to suit their potential targets.

1973:



1994:



2007:



At the moment, Hovis are showing an advert that takes the viewer from the WW1 through to the millenium, this may be a strategy that they have put into place in order to appeal across generations. For the older generations, a sense of nostalgia will be obtained, and for the younger, it tells a story about the history of how we got where we are today.




From talking to my Grandma, her values are based hugely around trust. If she has bought a brand and she is happy with it, she will stay with that brand for life. For example, her first ever oven was an Aga, it worked, so...her second cooker was another Aga! And now that her kitchen is being re-vamped, her third cooker is another Aga! For years she has also stuck with a certain perfume, Anais Anais - a brand that she knows and loves. There may be a new perfume out there that might prefer, but there is no need to look for a replacement as she already has a product that she is happy with. From reflecting on our chat, it seems that it is extremely hard for anyone or anything to make her change her mind about what products she already buys. For marketers, this may suggest that the older generation may not be the best target market for newer products, it appears that if a product satisfies the first time, there is no need to swap for something different...why would you want an alternative that may not be as good as what you already have was my grandma's attitude!

If we consider the Generation Y's and their values, there are a fair few differences in attitudes compared with the 'traditionalists'. The generation Y's makes up over 13% of the UK's population with opinions such as self expression is of higher importance than self control, and that respect can only be given once it has been received. When looking into favourite brands, names such as Apple and Adidas came up top; the new, fresh and 'cool' brands. This is obviously opposite to to the older generation like my Grandma who prefer to stay back with the names that they were familiar with in their younger days, not moving forward and keeping up with the latest and most desirable brands. Research has also shown that this Y generation respond best to humour in advertising rather than fact; this may be a reason that the Cadburys adverts are so well known - by being so abstract and unique and by using humour, their somewhat confusing messages are better remembered by other more factual adverts.

Some important fatcs about this generation that marketers need to be aware of are:

• 9 out of 10 Gen Y's own a computer, 82% also having a mobile phone
• The internet is more popular than television for Gen Y's, who spend more time online than watching TV.
• Generation Y's want to be entertained not informed

These bullets heavily suggest that trying to target this generation through TV media will not be very effective at all. If marketers want to have an impact on this generation, they need to be targeting them via the internet and through mobile technology.