Marketing Plan Notes of Lesson SS1 (Year 10) 2nd Term
Year 10 2nd term Free Lesson. Senior Secondary School Marketing plan Notes SS1. Consumer and organizational behaviour, Organisational buying behaviour.
MARKETING SCHEME OF WORK SS1 SECOND TERM
| WEEKS | TOPICS | LEARNING OBJECTIVES: At the end of the lesson the students should be able to: |
| 1 | Welcome test / market | Meaning of market , types, importance, differences between consumer market and organizational market |
| 2 | Characteristics of consumer market | State and explain characteristics of consumer market, differences between consumer market and capital market |
| 3 | Types of organisational market | Explain organizational market , state and explain types of organizational market |
| 4 | Consumer and organizational behaviour | Meaning of consumer behaviour |
| 5 | Consumer decision process | Meaning of consumer decision process, state and explain the stages |
| 6 | Organisational buying behaviour | Meaning, factors that influences organisational buying behaviour |
| 7 | MID TERM BREAK | Midterm- Test |
| 8 | Organisational buying behaviour ( continued) | Discuss internal factors that influence organisational buying behaviour |
| 9 | Organisational factors | Influence on interpersonal and individual factors or organisational behaviour |
| 10 | Revision | Revision |
| 11 | Revision | Revision |
| 12 | Examination | Examination |
| 13 | Examination | Examination |
| 14 | Examination | Examination |
WEEK: 1 REVISION OF LAST TERM WORK WELCOME TEST
WEEK: 1 DAY: SUBJECT:
DATE: TOPIC:
SUBTOPIC: PERIODS: DURATION:
LEARNING OBJECTIVES :
By the end of the lesson, most students should have attained the following objectives –
1. Give the meaning market . Features of market
2. Mention the types of market
3. Differences between consumer market and organizational market.
INSTRUCTIONAL MATERIALS: The teacher will teach the lesson with the aid of:
1. Picture or drawing and scheme of work
CONTENT:
MARKET
Meaning of Market
A market refers to a place where goods and services are bought and sold. It is a place where buyers and sellers come together to trade. Examples of Market are Dugbe Market in Ibadan, Kaduna Central Market, Balogun Market in Lagos, Onitsha main market, Ogbete market in Enugu, Ariaria market in Aba .
Features of a Market
- There must be at least a buyer
- There must be at least a seller
- There must be goods or services which is bought or sold.
- There must be medium exchange (money)
- Determination of price.
- There must be free entry and free exit.
- There must be a meeting place.
- There are several types of markets, and some of them are;
1. Capital Market:
This type of market is concerned with raising capital by dealing in shares, bonds, and other long-term investments by businesses, governments, etc. The capital market is also called the financial market.
People invest in big companies by buying shares and stocks on a long-term basis to make a profit. These people become shareholders and after a certain period, the company pays dividends to the shareholder, out of its profits.
In Nigeria, the capital market is known as the Nigerian Stock Exchange.
2. Money Market:
This is a market where businessmen obtain short-term loans, for the financing of their business transactions.
3. Commodity Market:
A commodity market involves buying, selling, or trading a raw product, such as coal, oil, gold, or coffee, etc. The users buy these products because they are useful to them.
There are other types of commodity markets that are found in every locality. These are:
a. Open-Air Markets: An Open-air market is one where buying and selling take place in an open arena.
b. Stalls: Market stalls are commonly found in urban areas, towns, and cities.
c. Shops: A shop is a building or part of a building where goods are displayed and sold to customers.
d. Online Shops: With the advancement in communication, Online shopping, that is, shopping on the internet, is increasing and becoming popular.
4. Foreign Exchange Market:
This is a market that deals with the purchase and sale of foreign currencies.
5. Factor Market:
This is a market for the sale and purchase of factors of production such as land, labour, and capital.
6. Labour Market:
This is a market that trades on Labour/workers. In the labour market, employers compete to hire the best, and the workers compete for the best satisfying job.
THE DIFFERENCES BETWEEN THE ORGANIZATIONAL AND CONSUMER MARKETS
Both individuals and organizations need to purchase items to accomplish their daily tasks. There is a large difference, however, in how and why an organization purchases goods and services versus how an individual shops. Understanding these differences is important if you want to tap into both an organizational and a consumer market.
Why Goods are Purchased
Organizations purchase goods to use in their ongoing operations and to resell to consumers, while consumers purchase goods for their personal use. Organizations also purchase more raw materials – such as wood, steel and other items used in manufacturing – than individuals who don’t have the tools or knowledge to put those raw materials to use as a product. Organizations generally purchase goods in larger volumes than individuals, and are driven by customer demand and need for manufacturing materials.
Consumers, on the other hand, are driven both by need and by want. It is possible to entice a consumer to purchase something he does not need through effective marketing or peer pressure, but it is much harder to entice an organization to buy an unnecessary product, especially when dealing with a purchasing department that is accountable for what it spends.
Buying Products in Bulk
Organizations often purchase in bulk, whereas consumers typically do not. For example, a consumer might buy three gallons of white paint to paint his house while an organization might need 3,000 gallons to paint shelving units for resale. The organizational market is thus more condensed – it is possible to have a business succeed catering only to a small number of organizational clients – while businesses that typically focus on consumers sell smaller quantities to more people.
That said, Costco and similar wholesale warehouse companies do successfully market low-price, high-quantity goods to individual consumers. These consumers tend to buy for small office spaces or family homes, however, rather than only for themselves.
Choices and Use
Consumers typically purchase goods for different reasons than organizations, and have more freedom in choosing the items they want. A consumer may purchase a chair so people can sit comfortably in his home. He will be able to choose any chair within his budget that he likes. An organization, on the other hand, may purchase a chair because an administrative assistant needs it to do his job.
The organization may be restricted in a chair purchase, not only by the budget set by a purchasing manager, but also by guidelines set by the Occupational Health and Safety Administration, and by company-wide guidelines on office furniture.
Marketing Strategy for Each
Reaching organizational clients requires explaining how your products and services will help their organization serve their clients and customers. It is a help them help others approach. However, to reach a consumer market, you have to show how your products enhance a consumer’s life in some way. whether it makes life easier or more enjoyable, or both.
WEEK: 2 DAY: SUBJECT:
DATE: TOPIC:
SUBTOPIC: PERIODS: DURATION:
LEARNING OBJECTIVES:
By the end of the lesson, most students should have attained the following objectives –
1. State The characteristics of consumer market
2. State the Differences between consumer market and capital market.
3. State and explain consumer market importance
INSTRUCTIONAL MATERIALS: The teacher will teach the lesson with the aid of:
1. Picture or drawing and scheme of work
CONTENT:
CHARACTERISTICS OF CONSUMER MARKET
| Foods and flavors for sale as an example of a consumer market. |
Consumer Market Characteristics
A consumer market applies to both goods and services. In the context of services, a consumer may participate by paying for a massage, a car wash service, a sporting event, or a sports trainer. Although consumers do not get tangible goods when they purchase services like these, they are trading their money for experiences. Therefore, they are a part of the consumer market.
| Massage is a service and a part of the consumer market. |
Market characteristics
- Demographic characteristics are based on factors such as social class, occupation, income, gender, age, religion, nationality, and race. Companies evaluate these characteristics to identify the demographic groups having most of their customers. Mostly, these characteristics are grouped into ranges for marketing purposes. For example, a company can target people aged between 18-30 years or 60 years and above.
- Geographical characteristics are based on climate, population density, region, market size, and urban factors. A company should understand these factors before venturing into a market. It would be inappropriate to sell warm wear in areas experiencing summer, for example.
- Psychographic characteristics refer to consumer characteristics such as attitudes, values, opinions, interests, and activities. A prenatal magazine meant to teach people how to care for a child would best target expectant mothers. Companies can conduct a focus group to understand the attitudes and opinions of consumers, after which they use the information to tailor their advertising.
- Behavioristic characteristics are the shopping behaviors of consumers. It takes a lot of research for companies to determine consumer loyalty to certain brands, their reaction to extra benefits offered upon purchase, and their frequency of purchasing a particular product. Companies classify consumers as light, medium, or heavy users, after which they can use targeted advertising.
A consumer market is very robust and diverse and encompasses different places. Hence, a consumer who purchases at a department store and another who purchases at a home party take part in a consumer market.
Consumer Market Examples
There are many examples of a consumer market. A common characteristic is that individuals purchase products and services for personal use. Some examples of the consumer market are:
- Electronic items. It includes digital and electronic devices used for private purposes such as communication and entertainment. Examples are laptops, radios, smartphones, printers and telephones.
- Food and beverages. This market comprises food, beverages, pet food, and tobacco products. Major types of food and beverages include canned food, dairy food, poultry, meat, bakery, confectionery, oils, alcoholic beverages, nonalcoholic beverages, and grain products.
- Leisure and entertainment. Consumers in this market pay for products and services such as music, films, tourism, and gambling.
| In a consumer market, customers buy items with the intention of using them for personal purposes. Hence, it differs from a wholesale market where customers purchase items for resale to make a profit rather than for personal use. Electronics as an example of a consumer market. |
Consumer Market Importance
Consumer markets are of critical importance as most of the purchasing by consumers takes place there. Companies evaluate the consumers’ geographic location, behaviors, and demographics to tailor their advertising to specific groups. Consumers possess most decision-making power since they are purchasing items for their personal use. Therefore, companies aware of consumer characteristics can improve their marketing campaigns and increase profitability. Consumer marketing is a critical activity in the consumer market as it influences the decisions and preferences of consumers. Consumer marketing entails selling products and services to consumers and promoting them through different marketing strategies.
DIFFERENCES BETWEEN CONSUMER MARKET AND CAPITAL MARKET
Capital vs. Consumer Goods: An Overview
Capital goods and consumer goods are terms used to describe goods based on their use. A capital good is any good used for production. Consumer goods are those used by consumers and have no future productive use.
The same physical good could be either a consumer or capital good, depending on how the good is used. For example, a riding lawn mower purchased by a land owner to mow the yard is a consumer good; the same lawn mower purchased by a lawn care business is a capital good.
Key Takeaways
- Capital goods are man-made products used by a business to produce consumer or other capital goods.
- Consumer goods are products used by consumers.
- Capital goods include items like buildings, machinery, and tools.
- Examples of consumer goods include food, appliances, clothing, and automobiles.
- The same physical good could be either a consumer or capital good, depending on if it’s used by a business in the production process or purchased for consumption and not intended for production or profit.
Capital Goods
Capital goods are any tangible asset used by a business to produce goods or services for consumer goods or for use by other businesses. They are generally durable goods that can be used more than once. The most common capital goods are property, plants, and equipment (PPE). Natural resources not modified by human hands are not considered capital goods.
Businesses accumulate capital goods and put them to use to produce the goods and services they sell. In other words, capital goods make it possible for companies to produce goods, often at a higher efficiency level.
Consumer Goods
A consumer good is any good purchased for consumption and not used later to produce another consumer good. Consumer goods are sometimes called final goods because they end up in the hands of the consumer or the end-user.
Examples of consumer goods include food, clothing, vehicles, electronics, and appliances. Consumer goods fall into three categories: durable goods, nondurable goods, and services. Durable goods have a lifespan of more than three years and include motor vehicles, appliances, and furniture. Nondurable goods have a lifespan of fewer than three years. This includes items such as food, clothing, gasoline, and services like haircuts, oil changes, and car repairs.
Types of Consumer Goods
Consumer goods can be classified in four ways:
- Convenience goods: Goods consumed and purchased regularly, such as milk.
- Shopping goods: Goods that require more thought and planning and include appliances and furniture.
- Specialty goods: Goods that are more expensive and cater to a niche market. Items such as jewelry are specialty goods.
- Unsought goods: Goods purchased by some consumers to serve a specific need. Life insurance is an unsought good.
The sale of most consumer goods is overseen by the Consumer Product Safety Act passed by Congress in 1972. The act created the U.S. Consumer Product Safety Commission, which regulates product safety and has the authority to seek recalls from manufacturers and ban products under certain circumstances.1
Key Differences
- The purpose of capital goods is to help produce other products. They are meant to be used for production, while consumer goods are bought for personal and final consumption.
- Businesses, companies, and manufacturers buy capital goods. Consumer goods are bought by consumers.
- Consumer goods are characterized by having a direct demand, as they directly satisfy the needs of consumers. On the other hand, capital goods have a derived demand since they indirectly satisfy consumer needs.
Capital Goods vs. Consumer Goods Example
A capital good is a man-made product that is used in production. A pre-built computer purchased by a graphics design business is a capital good. Additionally, the components of that computer are capital goods because they were used to build a computer designed for commercial use.
The same manufacturer could sell the same computer for home use. This computer would be a consumer good, even if it had the same components as the one sold to the graphics design business. Capital and consumer goods can be the same or different products; the distinction lies in how the goods are used and who uses them.
EVALUATION / ASSIGNMENT
1. State The characteristics of consumer market
2. State the Differences between consumer market and capital market.
3. State and explain consumer market importance
WEEK: 3 DAY: SUBJECT:
DATE: TOPIC:
SUBTOPIC: PERIODS: DURATION:
LEARNING OBJECTIVES:
By the end of the lesson, most students should have attained the following objectives –
1. Give the meaning of organizational market
2. Mention the types of organizational market
INSTRUCTIONAL MATERIALS: The teacher will teach the lesson with the aid of:
1. Picture or drawing and scheme of work
CONTENT:
MEANING AND TYPES OF ORGANIZATIONAL MARKET
Organisational markets can be described as markets created for further production and manufacturing of goods and services. This type of market is also known as business to business market
Categories of organisational market include: installations, accessories raw materials, component parts, supplies etc
Types of Organisational Market
Types of organisational markets would be considered under the following division: industrial market, reseller, market and government market.
(i) Industrial Market:
This connotes group of particular buyers with purchasing power or products that are produced for other business rather than household consumption. They can also be described as set of organisations that buy products for the purposes of using them in the production process to make profits or achieve other goals or motives. E.g. publishers buy papers to produce books.
(ii) Reseller Market:
This is the group of business organisations that buy products in order to resell them for profit. e.g. bookshops buy textbooks from publishers at a discounted price with a view to make a little profit.
(iii) Government Market:
This is the set or group of government agencies that procure products for the purpose of producing public services and or convert these products to other categories of the public who need them, e.g. Water Corporation procure chlorine chemical to purify tap water for public consumption
Competitors and Types
Competitors according to Hill and O’Sullivan (1996):
…..”competitors are organisation’s trying to satisfy similar customer needs and producing products that customers see as being alternatives for satisfying their needs.’
Kotler (1980) identifies the following types of competitors
- Desire competitors: This refers to immediate desires that consumer might want to buy.
- Generic competitors: This refers to other basic ways in which the buyer can satisfy a particular desire.
The Concept of Public Consumers
Koffer (1980) defines an organisation public or consumers as “any group that has an actual or potential interest ¡n or impact on an organisation’s ability to achieve its corporate objectives”.
Categories of Public Consumers
(i) Welcome public: This refers to a company’s public that the company or an organisation is interested in and that is interested in the company.
(ii) An unwelcome public: This refers to the public which a company has to market not only to its target customers but often to its major public.
(iii) Sought public: This is the one that the company ¡s interested in but that does not take a strong interest in the company.
Evaluation:
1. Define Organizational consumer market and list types
2. State the differences between Consumer market and organisational market
3. Describe a consumer product that you have patronised of recent.
WEEK: 4 DAY: SUBJECT:
DATE: TOPIC:
SUBTOPIC: PERIODS: DURATION:
LEARNING OBJECTIVES:
By the end of the lesson, most students should have attained the following objectives –
1. Give the meaning of consumer and organizational behaviour
2. Mention the factors that influences consumer behaviour
3. Explain those factors.
INSTRUCTIONAL MATERIALS: The teacher will teach the lesson with the aid of:
1. Picture or drawing and scheme of work
CONTENT:
CONSUMER AND ORGANIZATIONAL BEHAVIOUR
Definition of Consumer/Organisational behaviour
Consumer/Organisational behaviour is a concept that relates to why people buy one product and not another and why they patronise the activities of some business services and neglect the other. There are some underlying factors that influence consumer behaviour such as culture, socio-economic, personal and psychological.
And also, it is of essence that decision to finally procure a particular product passes through processes which are problem recognition, information, search, evaluation of alternatives, purchase decision and post purchase behaviour.
Kurt Lewin in his work on human behaviour proposed that B = f(P,E), i.e. behaviour (B) is a function (f) of the interactions of personal Influences (P) and pressures exerted by outside environmental forces (E).
In its application to consumer behavior it could be expressed as B=f(I,P) i.e. Consumer behavior(B) is a function (f) of the interactions of interpersonal influences (I) such as culture, friends and relatives and personal factors (P) such as attitudes, learning and perception.
Factors Influencing Consumer Behaviour
The following factors have been identified as those that influence a typical behavior of an average consumer. The factors are:
i.Cultural factors
ii. Social factors
iii. Personal factors
iv. Psychological factors
Others include: group influence, taste and preference economy, opinion leaders, technology and technical expertise, self-image/perception etc,
(i) Cultural Factors:
Culture can be defined as set of values, beliefs, preferences and tastes pass across from one generation to another. Invariably the culture where an individual comes may have a direct/indirect impact and influence on consumption and buying behaviour.
(ii) Social Factors:
This relates to group or societal class. Every consumer belongs to a number of social groups. The word social could be described as relationship, fellowship or interaction between people. For instance, senior secondary school, students are a class of social group whose consuming pattern may be influential on each other.
Every group exhibits certain norms of behavior. Norms are the values, attitudes and behaviours that a group deems appropriate for its members.
(iii) Personal Factors:
These relate to taste, preference and choice that an individual has for a particular product/item. Personal factors do influence consumption pattern of consumer. It can be as a result of religious belief, educational attainment, exposure, taste etc. for Instance, some people could not be influenced to eat a particular kind of meat or food due to personal policy or decision or religious belief.
(iv) Economic:
The nation’s and the consumer economic conditions do also influence consumption pattern and consumer behavior. Inflation (i.e. persistent and consistent rise in price of products) and taxes on personal economic situation is another determinant.
(v) Influence of Opinion Leaders:
These are people whose opinions are sought -on-certain specific products. They most often belong to the same social class as against those they influence. They are knowledgeable, creative, extroverts, friendly, command respect, cosmopolitan, expose to mass media,- opinion moulders, authoritative, influential, etc. . .
(vi) Psychological Factors:
These include attitudes, perception, learning, motivation and personality (self-image) which has direct or indirect influences on consumer buying behaviour.
(a) Attitudes:
This could be seen to be learned reaction towards a product offer in a consistently favourable and unfavourable manner. Although, they are generally not considered as a good component of consumer behaviour.
(b) Perception:
This could be described as mental thought of how someone sees something. This could be selective exposure, selective perception, selective retention may ¡n one way or the other’ influence consumer behaviour.
(vii) Family Life Cycle:
Naturally, people do follow a certain pattern of living known as the family life cycle. This ordinarily means that consumption pattern of people changes at a particular level of growth and development which invariably influences consuming behaviour.
Model of Life Cycles
(i) Bachelor/Spinster: young, not married, no children.
(ii) Newly married couples: young, no children
(iii) Full nest stage one: young married couple with youngest child under 6.
(iv) Full nest stage two: young married couple with youngest child age ten or oven.
(v) Full nest stage three: older married couple with dependant children.
(vi) Empty nest stage one: older married couple with no children living at home, head of household as breadwinner.
(vii) Empty nest stage two: older married couple with no children living at home, head of household retired.
(viii) Solitary survivor stage one: older single person in labour force.
(ix) Solitary survivor stage two: older person, retired.
EVALUATION:
1. Give the meaning of consumer and organizational behaviour
2. Mention the factors that influences consumer behaviour
3. Explain those factors.
WEEK: 5 DAY: SUBJECT:
DATE: TOPIC:
SUBTOPIC: PERIODS: DURATION:
LEARNING OBJECTIVES:
By the end of the lesson, most students should have attained the following objectives –
1. Give the meaning of consumer decision process
2. Mention the stages consumer decision processes passes through
3. Explain those stages.
INSTRUCTIONAL MATERIALS: The teacher will teach the lesson with the aid of:
1. Picture or drawing and scheme of work
CONTENT:
CONSUMER DECISION PROCESS
Consumer Decision Process
Consumer decision process connotes a choice on what to buy, how much to spend, what alternative to acquire and where to purchase it. Consumer decision process passes through the following stages.
(i) Problem recognition/recognition of unsatisfied need:
An unsatisfied need of consumer may create inner tension which may lead to problem recognition. At this stage of decision process, consumer becomes aware of a significant discrepancy between the existing situation and a desired situation. Problem recognition simply connotes a realisation by the consumer that he/she needs to buy-something to get back to the normal state of comfort.
(ii) Information Search:
This refers to information gathering I data collection. Once a need has been recognised by a consumer, he/she begins to search for relevant and reliable information about various alternative ways of solving the problem. Sources of information includes the internet, the mass media (radio, television) and print media (newspaper, magazines) friends and acquaintances, consumer reports or product manual/catalogues, visit to shops, interview etc.
Other factors that affect information search are: the time and money cost, the information the consumer already has from past experiences and other sources; the amount of the perceived risk if a wrong selection is made.
(iii) Evaluation of Alternatives:
Immediately consumer identified reasonable alternatives, the consumer must evaluate each one in preparation to making a purchasing decision. Past experience, attitude towards various brands of products, opinion of family members and groups are used as components of evaluation guide which consumers used to evaluate alternatives.
Moreover, there are two categories of choice models, these are; compensatory and non-compensatory models.
(a) Compensatory Model: This is when consumer arrives at a choice by considering all of the attributes for a product and mentally trading off the alternatives perceived weakness on one or more attributes for its perceived strength on other attributes.
(b) Non-Compensatory Model: This is more or less the opportunity of the compensatory model. This is when an alternative fails to meet the cut-off mark of consumer, even on one attribute, ¡t is then dropped.
(iv) Purchase Decision:
Once the consumer has evaluated the alternatives, then, he/she must make purchase decision. If the decision is to buy, he or she must so make decisions on the brand, price, store, colour, etc. Marketers can influence decision making process of consumers even at this level as most consumers find it very hard and difficult to make decision. Some consumers choose the convenience in-home shopping via telephone or mail order rather than travelling to complete transaction in retail stores.
(v) Post Purchase Decision:
It must be noted that the consumers decision process does not end with the purchase decision. However, the experience of buying and using the product provides information that the consumer will use in future decision-making.
After a consumer makes an important choice decision, he/she may be reasoning out-the wisdom or what led to the purchase decision. Therefore a marketer must know that post purchase behavior can influence repeat sales and affect (positive/negative) what the consumer tells others about the product or services of a particular organisation or firm.
EVALUATION / ASSIGNMENT
1. Give the meaning of consumer decision process
2. Mention the stages consumer decision processes passes through
3. Explain those stages.
WEEK: 6 DAY: SUBJECT:
DATE: TOPIC:
SUBTOPIC: PERIODS: DURATION:
LEARNING OBJECTIVES:
By the end of the lesson, most students should have attained the following objectives –
1. State the model of consumer buying behaviour
2. Explain organizational buying behaviour
3. State and explain factors that influence organizational buying behaviour
INSTRUCTIONAL MATERIALS: The teacher will teach the lesson with the aid of:
1. Picture or drawing and scheme of work
CONTENT:
ORGANIZATIONAL BUYING BEHAVIOUR
Model of Consumer Buying Behaviour
Problem recognition → information search → Evaluation of alternatives → Purchase decision → Post purchase → decision.
Organisational buying behavior also known as business buying process takes place within a formal organisation with its budget, cost and profit expectations. It is of essence to note that institutional, industrial, commercial and organizational buying behavior decisions primarily involve several people with bureaucratic procedures.
To comprehend organisational buying behavior, business; operations involve knowledge of influences on the purchase decision process, the stages in the organisational buying model, types of business buying situations and technique, skills and strategies for purchase decision analysis.
Factors That Influence Organisational Buying Behaviour
The following among other factors influence organisational or business to business buying behavior:
i. environmental factor:
ii. organisational factor;
iii individual factor;
iv. Interpersonal factors
(i) Environmental factors:
This influence may be due to a foreseeable change in business condition, a new technological invention or development, law or policies formulated by government supervising agents. Types of environmental forces which determine organisational buying behaviour are economic, political, legal and technological influences
(ii) Organisational factors:
This is determined on the strategic priorities of the firm, and the role that purchasing occupies in the executive hierarchy along with the competitions that a business organisation is facing.
(iii) Individual factor:
This is determined by the procurement or purchasing officer. Each member of staff in an organisation has a peculiar personality, identity, a specialise set of learned experiences a specific organisational function and a mental knowledge or perception of how best to achieve both personal and organisational goals. Members of an organisation can be influenced by rational and emotional quality and price. Emotional criteria comprise human factors which include the desire for ego and status within an organization.
(iv) Interpersonal factors:
This relates to person to person relationship or influences as a result of interaction that exist among member of organisation or a business to business market. Members staff of different organizations, live, socialise and relate with each other such as social club, professional bodies, religious circles, philanthropic organizations etc and as such can influence each other for patronage.
EVALUATION / ASSIGNMENT
1. State the model of consumer buying behaviour
2. Explain organizational buying behaviour
3. State and explain factors that influence organizational buying behaviour
WEEK: 7- MIDTERM BREAK MID-TERM TEST
WEEK: 6 & 8 DAY: SUBJECT:
DATE: TOPIC:
SUBTOPIC: PERIODS: DURATION:
LEARNING OBJECTIVES:
By the end of the lesson, most students should have attained the following objectives –
1. Give the Model of organizational behaviour
2. Describe the organizational buying process
INSTRUCTIONAL MATERIALS: The teacher will teach the lesson with the aid of:
1. Picture or drawing and scheme of work
CONTENT:
ORGANISATIONAL BUYING BEHAVIOUR
Model of Organisational Buying Behaviour
Problem Recognition → General Description of Need → Detailed Description of Product Specification → Supply Search → Acquisition and Analysis of Proposals → Supply Selection → Selection of an Order Routine → Performance Review
Description of Organisational Buying Process
(i) Problem recognition:
At this stage, a staff in an organisation discovers a problem that can be solved or an opportunity that can be tapped by acquiring a specific product.
(ii) General description of need:
This is when member of organisation determine ¡n a specific manner how the identified problem can be solved.
(iii) Product specification:
This involves a detailed and precise technical expertise and intervention and description of the needed item(s).
(iv) Supply search:
This is the search for the suppliers of the needed item after it has been identified and known.
(v) Acquisition and Analysis of Proposals:
This is when shortlisted supply format prices and products catalogues are examined, scrutinized and assessed.
(vi) Supply selection:
This relates to analysis of alternative proposals.
(vii) Selection of an order routine:
This is when the order for the supply of the successful shortlisted firm is placed.
(viii) Performance review:
This involves evaluation or past purchase review exercise as the functionality of the procured item.
Factors Influencing Consumer Behaviour
The following factors have been identified as those that influence a typical behavior of an average consumer. The factors are:
i. Cultural factors
ii. Social factors
iii. Personal factors
iv. Psychological factors
Others include: group influence, taste and preference economy, opinion leaders, technology and technical expertise, self-image/perception etc,
EVALUATION
1. Distinguish between organisational behavior and consumer behaviour.
2. Explain the influence of environmental and individual factors on organisational buying behavior.
WEEK: 8 – 9 DAY: SUBJECT:
DATE: TOPIC:
SUBTOPIC: PERIODS: DURATION:
LEARNING OBJECTIVES:
By the end of the lesson, most students should have attained the following objectives –
1. Give the meaning market . Features of market
2. Mention the types of market
3. Factors that influence internal factors, interpersonal and individual factors
INSTRUCTIONAL MATERIALS: The teacher will teach the lesson with the aid of:
1. Picture or drawing and scheme of work
CONTENT:
ORGANIZATIONAL FACTORS
There are four broad categories of factors that influence organizational buyer behavior: environmental, organizational, interpersonal and individual. Understanding these factors is critical to the marketer in preparing an effective marketing strategy.
Environment factors
Seven environmental factors influence organizational buyers: physical, technological, economic, political, legal, ethical, and cultural.
The physical environment includes factors such as the climate and geographical location of the organization and can affect the behaviour of organizational members and determine the constraints and options for the buying organization. A supplier’s geographical location, for example, is an important consideration in whether it is chosen or not. Many firms prefer local suppliers and in the international sphere, many buyers prefer to use domestic suppliers where ever possible. Climate and geography also determine the availability of raw materials from forests, farms, or mines for the organization, as well as its location. Other decisions based on things such as raw materials, labour availability and transportation matter too.
The level of technological development defines what types of goods and services are available to the organizational buyer. In addition, it influences the quality of the buying process itself through development of improved purchasing technology using more sophisticated equipment such as computers to facilitate complex purchasing and inventory control decisions.
The economic environment for the buying organization is affected by price and wages conditions, money, and credit availability, consumer demand, and levels of inventory in key industry sectors. These sorts of factors will determine the availability of goods and services, ability of buyers to finance purchases, and what prices will be paid. Just as for final consumers the economic environment will influence organizational buyers’ optimism or pessimism and consequently their buying behaviour.
Political influence could include such factors as country trade agreements, tariff barriers, lobbying activities, defense spending, government assistance to certain industries or companies and government attitude towards business generally.
Local, state and regulatory environments have an influence on buying activities which take place. Government regulation sets standards for what must be bought in order to be included on products (i.e. auto and lawnmower safety equipment). Terms of sale and conditions of competition are also enforced by legal means on organizational buyers.
The ethical environment is of major importance in the buyer-salesperson relationship. Buyers and salespeople must exhibit ethical behaviour if they are to be accepted as professionals. Consequently each group needs to know what is considered to be ethical and unethical behaviour. However, when selling activities are perceived as unethical by purchasers they may negatively affect choice of supplier as well as hurt the purchaser’s career.
Cultural values that are shared by members and which influence them in their buying behaviour. Large organizations, too, have developed their own corporate culture which differs in its values, norms, habits, traditions and customs. The nature of these differing values, styles, and behaviours may be evident in the organization’s buying behaviour.
These environmental influences may be exerted through a number of different types of organizations including business firms (suppliers, customers, and competitors), government, labour unions, trade and professional organizations and other social institutions such as religious and educational organizations. They determine the availability of goods and services to the organizational buyer and the general business conditions in which the firm operates.
Because organizational buying occurs within the frame work of a formal organization, the organization’s objectives, policies, procedures, structure and systems of rewards, authority, status and communication will all have an important influence on every part of the buying decision process. The marketer must understand the aspects of the organizational buying process in order to design an effective strategy to influence that process. These four sets of interacting organizational variables have to do with the tasks, structure, technology and people involved with buying.
The buying task is performed by the organization in order to accomplish its objectives. These tasks may be classified in different ways such as by purpose, level of expenditure, type of good or service purchased extent to which the process is routine or not, and extent to which responsibility for purchasing is centralized or decentralized. For example, buying tasks and decisions reflect the type of organization doing the buying or its purpose. Manufacturers and retailers have characteristic buying tasks that differ significantly from each other, and these two differ considerably from a third organization, such as a prison although they all share some types of buying tasks.
The organization’s goals will influence its purchasing objectives and behaviour. For instance, in companies that strive to be technological leaders in their industry, buying tasks will be performed in a more, scientific, high quality, engineering oriented way in order to assure this technological leadership.
Organizational buying behavior or business buying behavior can be affected by various internal and external factors. A marketing manager has to study carefully such factors that have an impact on its customer serving, to improves the organization’s marketing policy and plans.
The major factors affecting or influencing organizational buying behavior are:
- Environmental factors
- Organizational factors
- Interpersonal factors
- Personal factors
Environmental Factors
The environmental factors of business buying behavhior include government regulation, technological innovations, demand level, competition, social responsibility, cost of funds, availability of natural resources, etc. Marketing organizations need to assess the strengths and weaknesses of these factors and analyze how they affect their customers.
Then the concerned organization should predict how buyers will adjust their purchase. If necessary, they must be ready to change their marketing strategy to keep up with buyers’ changed behavior.
Organizational Factors
Every organization has a certain goal and objective, accepted procedures for purchasing, and an organizational structure, all of which influence its purchasing decisions. These organizational characteristics provide clues for determining how one industrial buyer might be different from another and how purchase decisions are likely to be made.
The goal and objective of an organization influence the types of products it needs and the criteria by which it evaluates. Different organizations may have different goals and objectives. Buying procedure of an organization may enforce the suppliers to follow several rules beyond which they can not go. By law, governmental organizations must call ‘biding’ while buying products from outside suppliers. Generally, the supplier with the lowest bid is often selected. Similarly, organizational structure assigns responsibilities and authority for decision-making to job positions and determines who should make the purchase decision. The authority may be either high-level or middle-level managers. It is a marketing manager who should find ways of turning these challenges or problems into potential opportunities.
Interpersonal Factors
Within the organization also the primary users include the individual personnel or staff with different motives, interests, and authority. They may interact with each other. For example, a purchasing manager and a product user within the organization may have quite different opinions relative to how important price is about product quality and specific product features.
The purchasing manager may be concerned more with price saving, while the product users may be concerned more with quality and design. In such a situation, the supplier or salespeople and others having direct contact with the organizational buying center should watch carefully for indications of buying center conflict and how it is resolved.
Individual Factors
In any organization, the individual staff makes buying decisions and purchases products. Therefore, organizational buying may be affected by their personal motivations, perceptions, preferences, and background. These individual characteristics are influenced by the individual participants’ demographic and psychological factors. A supplier’s challenge is to learn about the characteristics of the individual participants so that selling appeals can be tailored to the individual nature of the actual buyer(s). A supplier may learn these characteristics through the sales representatives, market research, other concerned business firms.
Analyzing buyer behavior is a challenge for any marketing professional. A supplier must learn about the individuals in the buying center and how they go about selecting products and suppliers. Only then a marketing plan can be designed to appeal effectively to those who will make the purchase.
EVALUATION
1. Give the meaning market . Features of market
2. Mention the types of market
3. Factors that influence internal factors, interpersonal and individual factors
WEEK: 10-11 REVISION
WEEK: 12-13 EXAMINATION