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.