B-2-B Marketing

Definitions
Business Marketing is the practice of individuals, or organizations, including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations. Also known as industrial marketing, business marketing is also called business-to-business marketing, or B2B marketing, for short.

“Business buying processes is the decision making process by which business buyers establish the need for purchased products and services, and identify, evaluate and choose among alternative brands and suppliers.”(Kotler et al, 2008)

“A business market is all the organizations that buy goods and services to use in the production of other products and services, or for the purpose of reselling or renting them to others at a profit.”(Kotler et al, 2008)

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)


B-2-B
There are three types of organisation that use business to business marketing, these are:
1. Government organisations
• Health
• Environmental protection
• Education
• Policing
• Transport
• National defence and security

2. Institutional organisations
• Not-for-profit
• Community-based organisations




3. Commercial organisations
• Distributors
• Original equipment
manufacturers
• Users
• Retailers

In some ways, business markets are similar to that of consumer markets. Both invloce two people who have buying roles and both make purchase decisions which will hopefully satisfy all the required needs of each individual. There are however some differences in market structure and demand, the nature of the buying unit and also the types of decisions and the decision process involved.

I found this part of our lecture quite difficult to comprehend. For this reason, I have inserted the characteristics of business markets below which I felt help me grasp the concept of ‘B-2-B’ Marketing. (Taken from Kotler et al)

Market structure and demand
Business markets contain fewer but larger buyers
Business consumers are more geographically concentrated
Business buyer demand is derived from final consumer demand.
Demand in many business markets is more inelastic- not affected as much in the short run by price changes.
Demand in business markets fluctuates more, and more quickly.

Nature of the buying unit
Business purchases involve more buyers.
Business buying involves a more professional purchasing effort.

Types of decisions and the decision process
Business buyers usually face more complex buying decisions.
The business buying process is more formalized.
In business buying, buyers and sellers work closely together and build long term relationships.

Culture

Definitions
· Solomon (2006) defines culture as “the values, ethics, rituals, traditions, material objects and services produced or valued by members of society”.

· “A culture is the configuration of learned behavior and results of behavior whose component elements are shared and transmitted by members of a particular society”. Ralph Linton (1945).

· “The complex whole which includes knowledge, beliefs, art, law, morals, custom and any capability and habits acquired by man as a member of society.” (Taylor in Dubois, 2000)

Culture is represented by “the skin of an onion, indicating that symbols represent the most superficial and value the deepest manifestation of culture.”

Hofstede, Geert: Cultures and Organizations. Intercultural Cooperation and Its Importance for Survival. - London: Harper Collins Publishers, 1994 (1st. ed. 1991).

As outlined in the spider diagram at the beginning, culture is made up of three essential components which are: Beliefs, values and components.
Our beliefs take into consideration the mental and verbal processes which reflect our knowledge and assessment of products and services. For example, we associate green with being environmentally friendly. They are the assumptions we make about ourselves, about others in the world and about how we expect things to be.

Our values are indicators which consumers as guides for what is appropriate behavior. Values tend to be relatively enduring and stable over time and are widely accepted by members of different markets. Values in one’s life are those things considered to be important. In relation to work, values are what give purpose in a job in the eyes of an individual who does it. The effort, commitment and motivation that a person brings to a job is usually in direct proportion to the values that they perceive in it.

Customs include overt models of behavior which constitute culturally approved and acceptable ways of behaving in specific situations.

Christmas in different cultures
This part of the class is probably the part I found most interesting as we discussed how Christmas is celebrated in different cultures.
· In Italy a witch flies on a broomstick to drop the presents down the chimney
· In Scandinavia as in the UK, Father Christmas on his reindeer pulled sleigh brings gifts,
· He uses a camel to bring the gifts in Syria
· In Japan he is called Santa-san (less than 1% of the population is Christian)
· In the northern hemisphere Christmas means lots of bright lights - because it is so cold and dark
· In the southern hemisphere it is about barbeques on the beach.
(Jaclyn Fierman, Christmas shopping around the World, Fortune, December 1987 pp 92-100)
Aside from holidays and Christmas, there are many other ways in which cultures differ. In fact, almost everything we do on a daily basis is influenced by our culture. Hofstede outlined four dimensions to explain variations in culture across national boundaries. These are:
· Power distance (Interpersonal relationships)
· Uncertainty avoidance
· Masculinity/femininity
· Individualism/collectivism.

Hofstede on England
The Geert Hofstede analysis for England illustrates that we have strong feelings towards individualism and masculinity. The power distance and uncertainty avoidance are ranked considerably lower than the first two. Long-term orientation ranks the lowest, indicating that change in England can be achieved more rapidly than in many other countries.

Hofestede on Spain
The Hofstede Analysis illustrates that uncertainty avoidance is ranked the highest for Spain, while the other three dimensions are ranked moderately. This is a result of Spain’s feelings and concerns regarding rules, regulations, and career security. One interesting thing to note is their low masculinity score. While women are still behind men in business equality, they are extremely important in society. As women continue to make progress in the workforce, look for this score to drop even lower.

There are a number of key differences across cultures for example; Language and meaning can cause problems for overseas marketing e.g. People in England associate the colours blue and white with hygiene however this may be different in other cultures. Attitudes to cleanliness and beauty also vary from culture to culture alone with cultural values.

To investigate culture further, we split into groups and each took a different country and investigated the culture from that country. Our group looked at Ireland. We took a look at stereotypes (which might be like the picture above) and also look at favourite sport and hobbies in Ireland. Take a look at the video below. It is interesting that this type of dancing mainly comes from Ireland although it is practiced by a small number of Irish-American people living in America.

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)

Before this lecture, I had the opinion that social class is primarily based on the amount of money you or your family have. This isn’t the case, in fact, social class no longer means income and your job no longer defines your position in society. In addition to this, we also spend some of the lecture thinking about whether we become social class A if we achieve wealth.

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.

In societies where classes exist, class can be determined largely by:
· Income or wealth;
· Ownership of land
· Occupation
· Education and qualifications
· Family background

In Great Britain the class system is ranked so that people can fit in to different categories. The categories are as follows:
• A – upper middle class
• B - middle class
• C1 – lower middle class
• C2 – skilled working class
• D – working class
• E –lower class

In other countries the class systems are extremely different to that in Britain. In India the class system is also known as ‘Caste System’ and is as follows:
• Brahmins – priests & teachers
• Ksatriyas – warriors and rulers
• Vaisyas – farmers, merchants
• Sudras - labourers
• Untouchables – polluted labourers

A consumer’s social class can be determined by many factors including the use of symbols to indicate social status. Symbols can include the clothes you use, the type of phone you have, the car you drive etc. In the twenty first century there are many indicators of social class other than wealth. There can be marriage between classes which would result in social mobility. Social class is a better indicator of purchases that have a symbolic aspect but low to moderate prices e.g cosmetics, liqueurs. Income is a better indicator of purchase behaviour for non-symbolic, high expenditure products e.g. fridge freezers. Both social class & income data are needed to predict behaviour with expensive & symbolic products e.g. cars, homes.

Before our lecture this week we were asked to take this quiz. By answering all the necessary questions it will give you an indication of our social status. When taking the quiz, I found that it is hard to decipher which answers you want to have and which you actually have. It only takes five minutes so please take the test then take the poll on the right which will tell us which social class most of us fit into! Thanks http://quizfarm.com/quizzes/Style/gonewiththegale/what-social-status-are-you/

Marketing to Children

Definitions
“Today’s kids have more autonomy and decision-making power within the family than in previous generations, so it follows that kids are vocal about what they want their parents to buy.” (Fleshman & Hillard, 2001)

“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” (Pocket Money, Mintel, 2008)

Background
From reading an article entitled “Children and Advertising” it seems that views concerning the ethics of advertising aimed at children diverge widely in Europe. In Sweden it is considered unacceptable and is banned for children under 12 and the majority of the population approve of this. In France advertisements are seen as part of preparing children for future life in a consumer society. Greece has a ban on advertisements for children's toys between 7 am and 10 pm and a total ban on advertisement for war toys. In the UK, restrictions exist on ads that 'might result in harm to children physically, mentally or morally' and on ads employing methods that 'take advantage of the natural credulity and sense of loyalty of children'.

Out of the 15 EU countries, only 4 (France, Ireland, the Netherlands and the UK) do not consider advertising aimed at children as harmful, and Spain alone considers a ban on advertisement unfair. (Children and Advertising, the European dimension)
What effect does marketing to children really have?

Children's reactions to advertisement can be very different from grown-ups, i.e. If adults see a product advertised and don't find it when they go shopping they forget about it. As children begin to recognise and understand ads and their purpose they start making demands. If these demands are not fulfilled they might start screaming or throwing themselves to the floor. It is difficult to explain to young children the reasons why they cannot have everything which - according to advertising - is 'for them'.

This relates to the stages of intellectual development proposed by Piaget which are related to major developments in brain growth. The fact that during the Preoperational phase (aged 2-4 years) toddlers can think about something without the object being present by use of language, suggests that after seeing an advertisement, they will remember it if someone talks about it. From this age the ‘nag factor’ may be present. 2001’s Kidfluence cites a 1998-1999 survey which said that between 20 and 40% of all toy, fast food and apparel sales were the result of successful pleas to parents. According the book, pestering or nagging can be divided into two categories—“persistence" and "importance." Persistence nagging (a plea, that is repeated over and over again) is not as effective as the more sophisticated "importance nagging." This latter method appeals to parents' desire to provide the best for their children, and plays on any guilt they may have about not having enough time for their kids.

Pocket money
Mintel (2008) states that “all children have seen falls in terms of the amount of pocket money they receive as parents and grandparents have to deal with sharp rises in the cost of living driven by increases in food costs, energy bills and higher mortgage repayments.” Mintel also outlines the fact that different age groups spend their pocket money on different things as kids aged 7-10, are the most likely to like save money they tend to regard themselves as good at it, whereas over four in ten of those aged 11+ admit ‘I spend money without thinking’.
Take a look at the graph below which outlines how children aged 7-10 spend their pocket money.

The video below is of ‘The late late toy show’ which is aired on RTE at Christmas time each year. The show consists of children trying out the latest gadgets and toys which are likely to be the latest ‘craze’. In this case it is the Nintendo Wii. It is programmes like this which spark the ‘nagging’ factor in children whereby they feel they ‘need’ the product of they wont be as cool as their friends.

Family

As I’m sure you have gathered by now, this week’s class focused on family! I found this class extremely interesting as it was easy to relate many aspects which we discussed, to my own family. The topics covered in this week’s class included; Family values, family as consumers, family life cycle, family roles and decision making, husband and wife roles and children’s influence on household purchases.

Definitions:
· Nuclear Family: Father, mother and children who live together.
· Extended Family: Nuclear family plus other relatives such as grandparents, aunts, uncles etc
· Family of orientation: The family you are born into.
· Family of Procreation: The family founded through marriage.

Background
In the last decade, family structures have changed significantly and we are seeing an increase in the number of births out of marriage as well as an increase in one parent families with 7% of families in 2001 being single parented. In addition to this there is also an increase in step families with the nuclear family being challenged by the “horizontal family” or step parents and step children. The average household size in 2001 was 2.4 people however, more than 6.8 million people live alone which may be due to the fact that 1 in 3 marriages end in divorce. (Statistics from: www.statistics.gov.uk)

Family roles, who decides?
The roles within families have also changed as women now account for over 44% of the working population and one quarter of married women work over 30 hours per week. Field (1968) identified three dimensions to determine relative influences of husband, wife and child:
· Discernment or technical know how
· Price à Expenses (who pays?)
· Satisfaction à Who uses?

In the traditional family, the man earns the money and the woman spends it. This is not the case for the majority of modern families (well, maybe the second bit hasn’t changed!), however there is definitely more shared participation.

Family as consumers
Every family is individual thus; the needs and life styles of each family are different and are usually affected by issues including:
· The number of children
· Their ages
· Whether one or two adults are employed outside of the home
· Income
· Changing demands on income

Now that there is more shared participation between husband and wife when buying items, we must question who the marketer should target. Who has the final say? Who is most influential?

From research, it seems that family decisions depend very much on the item in question. Women seem to have them most influence when it comes to ‘boring’ things such as food processers and choosing a dishwasher, where as men have a more significant say in electrical items such as choosing a video camera. Not surprisingly, children have a lot of influence when it comes to items such as video games and men and children seem to make an equal decision when purchasing a PC. Research shows that many family purchases other than toys are influenced by children. It is for this reason that so many advertisements are aimed at children, even if the product is not specifically for children.

Generational Marketing

Background
As we grow older, our needs and preferences change, often in unison with others who are close to our own age. For this reason, a consumer’s age exerts a significant influence on his or her identity. The method of marketing to a specific generation will always affect the way in which we promote and sell products and services. We all have a specific product which will relate to our generation. Each generation have their own characteristics, because of this as a marketing target we can usually categorize by generations by the way that we act and speak as well as our belief systems.

Which are you!?
· Mature Citizen: Born between 1909 and 1945
· Baby Boomer: Born between 1946 and 1964
· Baby Busters (or Generation Xers): Born between 1965 and 1980
· Millennial (or 2001er): Born after 1980 (ME!)

The diagram inserted above outlines a basic human lifecycle. We (hopefully) will go through all these stages in our lives and depending on which stage of our lives we are in, marketing aimed at us will vary significantly.

Our task for the remainder of this class was to prepare a presentation which described in detail a specific generation. Magda and I decided to choose generation Y. You may be wondering what exactly ‘Generation Y’ is?

Below I have inserted each slide from our power point presentation which will give you lots of insight into those born between the second half of the 1970’s and the first half of the 1990’s.
Enjoy!

• Generation Y includes those born between the second half of the 1970s and the first half of the 1990s
• Also called: Echo Boomers, Millenium Generation, iGeneration, Einstein Generation and Google Generation.
• Young Adults in the US and Western Europe have a total income of US$798 billion, making them an important group to target despite their falling share of the population. There are a great many stereotypes and myths about marketing to Young Adults, but most of them are false or at least, only true to a certain degree.

SIZE
• 13% of UK population (2,952,719 – age 20-24 and 3,268,660 age 25-29) total: 6.1 mln people
• Generation Y makes up over 70 million people in the U.S.

THEY LIVE IN A WORLD WHERE:
• Self-expression is valued over self-control.
• Respect is only given after it has been received.
• The fear of living poorly outweighs the fear of dying.
• Violence is an acceptable alternative.
• The end justifies the means.

TIME LINE
• Berlin Wall is the first major event that older Generation Y’ers will remember, separating them from Generation X. The fall of the Soviet Union and the First Gulf War serves as the midpoint and the 9/11 terrorist attacks as the endpoint.
• Other important events include the death of Princess Diana, the return of Hong Kong to China, the Monica Lewinsky scandal, the SARS epidemic and the avian flu.




• The Reagan administration accelerated the War on Drugs, publicized through anti-drug campaigns including the Just Say No campaign. In spite of the sentences imposed by the Reagan administration, new drugs such as Crack cocaine appeared in the country.

BRANDS
· When forming opinions on brands, Generation Y pays particular attention to more modern ideas (such as their green credentials). They like brands that "present themselves in the right way", with companies like Apple, H&M and Adidas having previously come out in the top 10 lists of their favoured brands. Being an image conscious generation means that brands that appear to be cool (like Apple) will always appeal more than other brands that may provide a similar service.

· The constant struggle to keep up with ever changing fashions means that if a brand can appear desirable to a substantial quantity of young people then many others will follow. There is far more exposure to advertisement, so in order to stand out advertising towards generation Y tends to be more humour based. Brands like Cadbury's manage to raise awareness and stay the topic of conversation by using humour to their advantage.





ATTITUDES
When marketing to Gen-Y it is important to remember:
• Nine out of 10 Gen Yers own a PC and 82% have a mobile phone
• The Web is more popular than television for Gen Y-ers, who spend more time online than watching TV
• They want to be entertained, not informed.
Gen-Y use digital media to promote what is important to them:
• Creating
• Customizing
• Sharing
They are also environmentally and socially conscious.

HOW GROUP Y SPEND THEIR TIME
• Since we each have a fixed amount of time in a given day/week/month/lifetime, we all probably (I know I do!) want to spend it wisely. As such, when we are online we tend to spend more time on sites that are worthy of our attention. After all, who wants to waste time? So, the big question is, where DO we spend all our time online? Which websites are more successful in capturing our attention compared to others?

ONLY 20 DOMAINS CAPTURE A WHOPPING 39% OF ALL OUR TIME SPEND ONLINE!

Surprised at the figures above? I know I was…

This was by far my favorite class so far this year!! I found making my own power point with a friend was much more enjoyable than just taking notes in a lecture and I definitely learned a lot about Generation Y.

What group do you belong to?

A group can be defined as two or more individuals who:
· Share a set of norms;
· Have role relationships;
· And experience interdependent behaviors.

Groups can influence the socialization process, i.e., they influence what we learn and how we behave. Belonging to a particular group or longing to belong to a group can influence the choices consumers make.

Below is a spider diagram (taken from out class notes) which outlines the different types or groups we may be part of. How many of these groups can you relate to?

During this class we also discussed social comparison theory which is where we look to the behavior of others to provide a guide and to reassure our self evaluation. Solomon states that “sometimes we look to the behavior of others to provide a yard stick about reality. Social comparison theory asserts that this process occurs as a way of increasing the stability of one’s self evaluation, especially when physical evidence is unavailable.” Although people often like to compare their actions and judgments with those of others, they tend to be selective about precisely who they will use as benchmarks. Similarly between the customer and others used for social comparison boosts confidence that the information is relevant and accurate (though we may find it more threatening to be outperformed by someone similar to ourselves). It is for this reason that we may purchase things to achieve superior social status.

Take look at the Chanel advertisement below. Will you buy this perfume so you feel good when you wear it? Do you aspire to live a life like that shown in the ad?



· The main influence if groups is the acceptance of certain expectations of behavior e.g. norms or rules.
· The power to make an individual conform to groups pressure and influence depends upon:
1. Importance of membership
2. Fear of negative sanctions
3. Degree of support from others

Reference groups
We may belong to reference groups whose influence will be most powerful and important for purchases that are: luxuries rather than necessitates & are socially visible to others.

Involvement, values and attitudes

The learning objectives set for this week’s class were as follows:
· Understand how a person’s level of motivation and degree of involvement affects their behavior.
· Understand how a person’s values and attitudes affect their behavior.
· Consider how marketers can exploit this knowledge.

Involvement
Involvement is defined as ‘a person’s perceived relevance of the object based on their inherent needs, values and interests’. The word object is used in the generic sense and refers to a product or a brand, an advertisement, or a purchase situation. (Solomon et al.)
This section of the class on ‘Involvement’ linked in with last week’s class which was based on involvement in gift giving thus; we can refer back to the previous blog for the diagram which outlines the stages in consumer decision-making.

Looking at this diagram and taking into consideration gift giving, we can see that it is the level of personal importance evoked by a stimulus which leads to the motivation to process information. For example, if we are shopping for a pair of shoes for a wedding then the level of personal importance will be extremely high as we want to look our best, however, if we were buying a Christmas gift for an aunt who we very rarely see, the level of personal importance will be a lot lower. In addition to this, there can also be a lack of interest in a particular product (inertia), or, on the other hand there can be an obsession with it (passion), for example beer, soccer or water skiing.

As felt involvement with a product increases, the consumer devotes more attention to ad’s related to the product, exerts more cognitive effort to understand these ads, and focuses more attention on the product related information in them. However, this kind of ‘rational’ involvement may be the exception rather than the rule, even for such products as stereos, TVs and DVD players, as a company executive from Philips once argued.

Solomon et al states that ‘When consumers are truly involved with a product, an ad or a website, they enter what is been called a flow state. This is the Holy Grail of web designers who want to create sites that are so entrancing that the surfer loses all track of time as he or she becomes engrossed in the site’s contents (and hopefully buys things in the process!).

Flow is an optimal experience characterized by:
· A sense of playfulness;
· A feeling on being in control;
· Concentration and highly focused attention;
· Mental enjoyment of the activity for its own sake;
· A distorted sense of time;
· A match between the challenge at hand and one’s skills.’

The Swiss Potato Board is currently trying to increase involvement with its product. The Ad below is used alongside the slogan ‘Recipes against boredom!’.

Values

“Values, (sociology). The ideals, customs, institutions, etc., of a society towards which the people of the group have affectionate regard. These values may be positive, as cleanliness, freedom or education, or negative such as cruelty, crime or blasphemy. (dictionary.com)

“If we believe our overall values drive our behavior, then we should be concentrating on the important, underlying motives that drive consumers to make product or service choices rather than simply product attributes”(Ries & Trout 1982)

“Values are out ideas about what is desirable” (Wilkie)

The question we were asked was “Do we always act according to our value system?” This question proved very difficult to answer so we decided it would be a good idea to take a list of values and prioritise how much these values drive your lifestyle.

Kahle’s list of values (1983)
1. Self respect
2. Excitement
3. Being well respected
4. Self fulfillment
5. Sense of accomplishment
6. Warm relationship with others
7. Security
8. Fun and enjoyment
9. Sense of belonging

The order in which each of us arranged these differed significantly. Some people found self respect was most the most important value in their life however, others believed fun and enjoyment was most significant. In our multi-cultural class, we found that different cultures were more concerned with different values. For example, Frankie, who currently lives in Abu Dhabi, explained that self respect is the most important value in her life, however, Sean who lives in England, believes that fun and enjoyment is the most important value in his life. Many people in fact seem to have adopted the attitude “Here for a good time not a long time”. It is obvious from out short discussion that values differ significantly from culture to culture and I found this extremely interesting. In this future this is something I would like to carry out further research about.

In addition to this, we tried to identify products which we may purchase in order to achieve these end states. Examples of these products included clothing, car, football merchandise and using social networking sites. We also discussed what a sense of accomplishment is and it seems that each of us get a sense of accomplishment from different things. I for example, will get a great sense of accomplishment when I graduate (with a 1:1 or course!) and if we relate this to marketing/advertising, an advertisement incorporating this would capture my attention.

Our values can also be affected and changed by significant events in our lives. Many people will be affected by 9/11 and princess Diana’s death, however we can also be affected by personal events such as a death of a loved one or a memorable family holiday.

As part of this week’s class we also had to take one of the tests on the Harvard Project Implicit website (https://implicit.harvard.edu/implicit/)

The data from the test I took suggest a strong automatic preference for Local compared to Foreign. Although these tests can, in some cases, be extremely accurate, I am not sure how much I agree with this. If I had taken this test before I came to University I think my test results would have stated a strong preference for Local compared to Foreign, however I believe this is not as strong now. I enjoy living away from home and have met many people from different countries and cultures and I expect this to continue as I complete my next two years at University. Also, as I begin to travel more and more I expect to have a stronger preference for foreign compared to local.

FOREIGN?

LOCAL? (Portadown High Street)

You may be wondering why this test is relative to our module ‘Understanding the Customer’ but it is a key part of marketing and advertising. It is very important for a marketer to define their key audience and position their strategy. If an advertisement is being aimed a person around my age (19-20) and everyone in this age group has a strong preference for local over foreign, then it would may be considered pointless to use an exotic scene in an advert. Things which can be considered ‘closer to home’ will have more of an impact.

Another test called ‘VALS 2’ combines detailed demographic data with AIO statements such as attitudes, interests and opinions. ‘VALS™ is a marketing and consulting tool that helps businesses worldwide develop and execute more effective strategies. The system identifies current and future opportunities by segmenting the consumer marketplace on the basis of the personality traits that drive consumer behavior. VALS applies in all phases of the marketing process, from new-product development and entry-stage targeting to communications strategy and advertising.’ (Vals website). My results from the survey stated that my primary VALS type is Innovator which represents my dominant approach to life. My secondary classification is experience which represents the particular emphasis I give to my dominant approach.

The link to the VALS survey is http://www.sric-bi.com/VALS/presurvey.shtml

The survey only takes a few minutes to complete!

From me to you... (Gift giving)

We have all seen the TV commercials about holiday gifts: Mum loves that diamond necklace and Dad flips for the sports car in the driveway with a big bow on top. But wait a minute! How can we afford to buy such expensive gifts? Most kids and a lot of students don't even have jobs. So what do you do if you want to give gifts to the important people in your life? How much thought do you put in to it? Is gift giving always an involved decision?

These are just a few things we thought about at the beginning of this week’s class.
After making a list of all the people we have to buy for this Christmas, we also discussed how hard, easy, fun or boring, it was buying for these people.

Consumer involvement plays a large role in gift giving as it is the level of personal importance evoked by a stimulus leading to motivation to process motivation, i.e. how much do we care about the person we are buying for. It is possible that we have an absolute lack of interest in gift giving (Inertia).

Kotler outlines a Buyer decision process which begins by considering various approaches consumers use when faced with a purchase decision. It then focuses on three of the steps in the direction process: how consumers recognize the problem, or need for a product; their search for information about product choices; and the way in which they evaluate alternatives to arrive at a decision.

Below is a diagram outlining the stages in consumer decision-making.

We must understand that some purchase decisions are more important than others thus, the amount or effort we put into each one differs. This is an important factor to consider when we discuss gift giving. In order to measure consumer involvement, Laurent and Kapferer (1985) argue that it will be affected by four components:

1. Importance and Risk (Taking into consideration FTPEPS; Finance, Time, Physical, Ego, Performance, Social).
2. Probability of making a bad purchase.
3. Pleasure value of product category.
4. Sign value of product category (Brand recognition)

After taking this into consideration, we were faced with a task:
Using FTPEPS consider the likely level of involvement of; 1) a 21 year old and b) a 46 year old
1) Buying a car
2) Buying a mobile phone
3) Buying underwear for your partner.

This discussion proved very interesting. Our group concluded that there would be vast differences in the reasons why the products listed above were purchased. When buying a car, a 21 year old may be more likely to go for one that is smaller in size and that looks ‘cool’, where as a 46 year old may be more likely to go for a family sized car and one that is safe and economical.
When purchasing a mobile phone, we concluded that a 21 year old would go for a phone with lots of extra features and one that may indicate social status. An iphone for example may do this, whereby it is deemed ‘cool’ and friends may be envious. A 46 year old may go for a standard phone which does the bare minimum expected by a phone (i.e. Call & text). When discussing their phone, we would expect to hear a 46 year old say ‘It does the job’! (Maybe we are being slightly stereotypical!)

When discussing number 3 we had quite a laugh! It seems that age is not the main factor here but gender. According to our class, females would feel a lot more comfortable buying underwear for their partner, however males would find it a highly embarrassing and a very awkward situation.

Remember that day when...! (Nostalgia)

Definitions

“A wistful desire to return in thought or in fact to a former time in one’s life, to ones name or homeland, to one’s family and friends; a sentimental yearning for the happiness of a former place or time e.g. a nostalgia for his college days.” (dictionary.com)

“When a stimulus is capable of recreating a personal event, even after many years, there often follows a bitter-sweet sentiment known as nostalgia” (Dubois, 2000)

“Nostalgia has been described as a bitter sweet emotion, where the past is viewed with both sadness and longing” (Solomon 2000)

Advertisers can use many things to trigger nostalgia such as the 5 senses. Music, images, smells, touch and taste can all trigger memories from the past. I asked mum to think of a few things I loved when i was a little and from this I have made a collage of pictures. It's amazing how many memories came rushing back when putting this together!

As you can see, I was a huge fan of characters such as Noddy, Gordon the Goffer and Lamb Chops and I loved bands such as steps and Spice girls. The pictures of Micky and Minni mouse represent my favourite childhood holiday to Disney World, Florida and the kitten was my first pet named Sooty. (Unfortunatley she got taken to a ‘cat farm’...!) My favourite food as a child was boiled egg with soilders which kept my energy up for Irish dancing!

You may be wondering about the photo of the middle aged man with the moustache… well, aged just two, I was a huge fan of racing (hence the collection of toy cars!) and my first peoper sentence included the words ‘Flat out’ (in a little kid's voice!) and ‘Nigel Mansell’ so I have the potential to be his youngest ever fan!

Making this collage with Mum was great fun, sparking a lot of uncontrolable laughing and story telling. If an advertiser were to use some elements of my childhood (1990’s) in an advert I know I would be very interested in the product and would talk a lot about the advertisement to others. This in itself would create publicity for the product and spark interest amount others around the same age as myself.

Learn and recall! (Memory)

“Rebecca” by Daphne du Maurier


“If only there could be an invention”, I said impulsively, “that bottled up a memory, like a scent. And it never faded, and it never got stale. And then when one wanted it, the bottle could be uncorked, and it would be like living the moment all over again.”

Imagine if memories could be like this!

Definitions: Marketing objectives
“Every time an advertisement or commercial appears, the objective is to have the reader or viewer to learn something… and remember what he learned.” (Brit 1955)

“… our ultimate aim is to teach them brand loyalty” (Rice, 1997)

“to get the brand into the evoked set” (Ruth Hickmott)

This class focused on memory and nostalgia and how advertisers can use this to encourage us to buy their product. Memory involves a process or acquiring information and storing it over time so that it will be available when needed. Some approaches to the study of memory employ an information processing approach. They claim that the mind is in some ways like a computer; data is input, processed and output for later use in revised form. The diagram below was used in class to explain this further.

If a consumer is familiar with a product then they are more likely to recall it in the future, this forms the fundamentals of marketing where by awareness of a product is built. The more attention we pay to a particular product, the more likely we are to remember it. A great example of this is the most recent Cadburys advertisement which is inserted below. This seems to be a case of ‘love it or hate it’ and many people remember it and talk about it because of their dislike of the advert, this therefore raises awareness of the product.

A consumer may process a stimulus simply in terms of its sensory meaning, such as its colour or shape. When this occurs, meaning may be activated when a person sees a picture of the stimulus. This relates to ‘episodic memories’ which are those that relate to events that are personally relevant and as a result, a person’s motivation to retain these memories will be strong. Commercials sometimes attempt activate episodic memories shared by many people. Recall of the past may have an effect on future behavior, this leads us on to nostalgia and the effect it has on consumers.

Are you an expert decision maker? (Heuristics)

Fast and frugal heuristics

“Making quick decisions when there is a lot of choice” (Williams, 2001)
“The mental rules of thumb that leads to a speedy decision” (Solomon et al, 2006)

This class began with a few minutes reflection on whether we actually perform complex mental calculations (such as those in the diagram on the right) each time we make a purchase. The general consensus was that we definitely do not. We as consumers often employ decision rules that allow us to use some dimensions as substitutes for others. The diagram on the right shows the stages we subconsciously go through when purchasing a product.

One of our core texts: ‘Consumer Behavior, A European Perspective, 3rd Edition, 2006’ uses the following example to explain exactly what is meant by Heuristics. “Daniel relied on certain assumptions as substitutes for prolonged information search. In particular, he assumed the selection at the big out of town retailer would be more than sufficient, so he didn’t bother to investigate any of its competitors.”

This assumption served as a short cut to more extended information processing.

Consumers often fall back on heuristics, especially when limited problem solving occurs prior to making a decision. This in turn will lead to a speedy decision rule, E.g.
· ‘Higher prices products mean higher quality’ (General rule)
· ‘Buy the same as last time’ (General rule)
· ‘Buy silver spoon sugar because my mother does’ (Specific rule)

Although you may not realize, these rules are used each time we go shopping. Can you think of any specific heuristics you use when purchasing a product? One that sticks out in my mind is Colegate toothpaste. I only ever buy this brand and until now I’ve never thought about why that may be but it because this is the brand my Mum always buys. (It definitely isn’t down to this advert anyway!!) It has just become habit that I would go straight for this brand rather than any other.

Although we make these short cuts on a regular basis, they may not always be in our best interest. For example, you are planning on buying a new television and seen a Philips one you like. You then find out that two of your friends have Philips televisions, both of which have been faulty. Are you more likely to buy the Philips TV or look for another brand?

Despite the fact that Philips has an excellent reputation, chances are you will look for another brand for fear of your Philips television being faulty as well. This should not be the case because according to ‘Top10links.com’, Philips is the overall number one television manufacturer. Sometimes heuristics may not be in the consumer’s best interest, so have a good long think about the product you wish to purchase if it is an expensive one such as your lovely Philips television!

Another limitation of heuristics is forming assumptions. When forming assumptions, there is of course the possibility that we can be lead to the wrong decision. For example, would you expect a large electronic store to have more competitive prices than a small, specialist store? I know I would but this is not always the case. In the Poll section of my blog I have added a poll about this, please take a minute to complete it as the results may prove very interesting.