02-06-2012, 10:23 AM
Consumer and industrial marketing
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Introduction
In this chapter we will deal with the factors that influence customers’
purchasing activities in consumer and industrial (business) markets.
Consumer marketing is directed at private individuals who purchase goods
and services for personal consumption. In contrast, industrial marketing
deals with customers who purchase in order to make or sell their own
products or services.
For both types of marketing there are two important issues to consider:
a. the customer decision-making process
b. the influences on customers’ decision-making.
By understanding both the processes involved in customers’ buying decision
making and the influences on these processes, marketers can more
effectively use the marketing mix to influence customers.
Consumer markets and buyer behaviour1
Whether it is consumer or industrial markets that are being considered, there
is a distinction between consumers and buyers. Whereas buyers actually
make the purchase, it is consumers who use the product. Marketers need to
be aware of this and to decide whom they wish to target.
The factors that influence consumers’ purchasing determine whether a
purchase will be of high or low involvement for the consumer. A customer’s
level of involvement depends on the degree of personal relevance that theproduct holds. In turn, the level of involvement affects how much effort a
consumer will put into making a purchase. For those purchases that are of
low involvement, the customer will start the buying process by recognising
their need for the product and immediately make the purchase. However, for
purchases of high involvement, after recognising need, customers will not
immediately make the purchase but will pass through other stages, such as
evaluating the products offered by rival marketers.
Influences on consumer behaviour
For marketers it is important to understand which factors influence
consumers’ purchasing, since changes in these could affect demand for the
marketers’ product. Such factors can be actively manipulated by the marketer
in order to improve sales. An important aspect of this process is
understanding consumer buying behaviour. A useful framework can be the
dimensions of buying behaviour, consisting of the following factors:
• cultural
• social
• personal
• psychological.
Table 4.1 at the end of this chapter shows how these influences can have an
impact on the elements of the marketing mix (which will be discussed in
subsequent chapters). You should revisit this table as you study this unit
because understanding consumer behaviour is of value to marketers only
insofar as it has an impact on marketers’ activities – important aspects of
which are: the design of products, setting prices, promotion strategies and
management of distribution (place).
Industrial markets and organisational buying behaviour3
This topic deals with the purchasing of services and products by businesses
and public sector bodies. First we will explain the key differences between
consumer and industrial marketing and then the factors that marketers need
to take into account when selling to business markets.
Business buying is an increasingly important market. Many companies buy a
growing proportion of their product from third parties. Canon, for example,
supply printers to a number of computer manufacturers who sell the printers
under their own brand. A number of car manufacturers buy a large
proportion of components from independent manufacturers.
This increase in purchases from third parties has been accompanied by
increasing emphasis in the marketing literature on the benefits of long-term,
co-operative relationships between industrial buyers and sellers. In
particular, such co-operation can enable companies to cope with increasing
technological risks. For this reason this topic focuses on the reasons why
closer relations between customer and supplier can be beneficial.