In my previous blog " What has marketing become?" I have been assessing the meaning of marketing concept and the importance of cooperation with internal stakeholders (not only customers) to deliver an effective long-term sustainable marketing offerings.
Today, I would like to dive deeper into how the customers both personal and industrial make their purchasing decisions.
Firstly, lets determine what implementation of marketing concept leads to:
1) It allows better understanding of the industry, including a level of completion and future direction based on the economical, political, legislative factors that are being evaluated,
2) detailed understanding of the needs of customers, potential customers and other interested parties who impact the business strategy,
3) provides the knowledge that enables the business leaders make decisions about future direction of the company.
We know already, that the marketing role is to assess the wants and needs of customers, but also cooperation with internal stakeholders to ensure these needs can be met. It is however not as straight forward as it seems. Therefore the marketing role is based on assessing the extend to which the competitors are already meeting the needs and identifying any unmet needs that still exist. This is why it is crucial for the marketing professionals to understand the business sector the organisation is operating within. This is why marketing plays a crucial rule in the strategic direction of the business as it provides the knowledge necessary to drive current and future product development.
Who are the customers of a marketing professionals?
Internal customer is anyone within the organisation to whom the service is provided. However, it will depend on the circumstances. For example in a finance company will have department managers as their primary customers as they process the information.
It is easy and quite common for marketing departments to fall in the trap of seeing the external customers as the most important. Therefore it is imperative to remember that a company works as a system and if one part of it is not working correctly the system will fail. If the internal communications and interactions are not working effectively the product or service that is being offered to external customers will be limited. The internal customers are therefore extremely important.
What does the internal customer need? This will speed in two main categories: providing a link to external customer and marketing to the internal customer. For example the research and development department as well as business operations need the marketing department to take their ideas and communicate them to the marketplace. This requires clear and open communications. The marketing department has to liaise very carefully with internal departments to develop a strategy which will satisfy the end customer and the product or service will sell.
There is also a need to internally market ideas and visions from employees and management of the organisation. This can be achieved by AOSCT model:
* Analysis - understanding the issues,
* Objectives - setting out what needs to be achieved,
* Strategy - developing a clear strategy for how the objectives will be achieved,
* Tactics - working out how the strategy will be achieved,
* Control - looking whether the objectives have been achieved and evaluating what worked or didn't work.
This will generally happened within different levels of internal customers:
* Supporters - those who are in favour of the proposal,
* Neutral - those who do not have a strong opinion about the proposals,
* Opposers - those who are against the proposals.
As a marketing professional, how do you treat your internal customers?
External customers are those who do not form part of the organisation. When thinking of an external customer we need to think more broadly that the people who purchase the product or service. In addition, external customers are those who require information from the organisation, for example a regulatory body or government officials.
The organisation must understand the needs and wants of the external customers. Marketing department has a responsibility to communicate those to the organisation. However, this process is not always successful and often the business concepts working as separate solos as opposed to one system. At times also, the marketing information are not translate successfully to the business. Very often, the marketing department will also misunderstand the external customers needs. This could happened when the expectations a vague and difficult to define, they keep changing and the organisation is not keeping up with those changes, marketing has its own vision to fit only the marketing needs or other departments in the organisations believe that their ideas a better.
Marketing mistakes
The best marketing professionals know what to do and not to do. There is plenty of marketing fails, which you can use to learn and not fall into the same trap.
In 1985, Coke decided to test out a new formula but it turned out that people didn't like the flavour. This proofs that the customers do not always like a product for the reasons marketers think they do. Even if the taste of the New Coke was actually better, people just didn't want it because of the place of regular Coca-Cola in the americas culture. The company was receiving many complaints. The competitors than took advantage of the fail and poked fan of the new concept over the mistake. The reason for this fail was that people felt like they were loosing part of something bigger than the brand name.
Gap's logo from 1986 was iconic and timeless. But in 2010 Gap redesigned their logo. The backlash was so severe, that the company reversed its redesign within days. The incident underscores how important implementing goods design, hiring great designers and user research is important.
"Sometimes Lighter is Better" Heineken slogan felt off for people. Eventually the company was forced to take the slogan off as it was considered as a racist ad. Seeing your marketing team diverse enough and enable to spot issues like this before they go live.
Burger King introduced an ad campaign featuring The King mascot which doesn't seem so appetising. Also in 2009 the business broadcasted a bikini-clad woman singing in the show to promote their new breakfast. People thought it was creepily weird.
Even if you are a flawless marketer, you a prone to mistakes, we are all human. The effects of mishaps can be irreversible.
Conflict of Interest
T
he demands of Internal and external customers will often conflict. The conflicts may appear doe to different reasons:
Cost - the design and production of what the product marketing department communicated will cost and the organisation cannot proceed with the development.
Suitability for use - it is possible that the management override the ideas of the marketing department because they think they are not suitable for use.
Durability of the design - the design may great look today, but will the customers need this in the future?
Easy of manufacture - manufacturing is a costly process and it can lead to conflicts of interests. There are times when organisation may decide that it is not worth to make the design.
How customers think?
They recognise the problem
First customer will realise, that there is a need for an item. At this point customer only recognise they may need to purchase a product. The need can be either functional or pleasurable. The need comes from the actual and desired state. Here marketers need to focus on the desired state. The higher the drive level, the more open the individual is to consider new ways of satisfying their needs. It is stimulating and enjoyable to allow gaps to develop between the desired and actual states. Each individual has an optimal stimulation level, which is the point when the drive is being enjoyable without being challenging, without being uncomfortable. The stimulation level is subjective and some risk-takes will choose novelty and some prefer tried and tested items. Those with the high stimulation level are generally younger.
It than leads to motivation, which is the reason people take action. The level of motivation will depend on the desirability of achieving the end goal.
They search information
Having become motivated to seek a solution the customer will engage either in the internal or external search. The internal search will be based on the experience of the product category and thinking about what they have heard about the product. And, the external search involves shopping around, reading manufacturers advertisements and literature or talking to others about the proposed product.
For most purchasers the internal search is probably sufficient, but the purpose of the external search is to reduce risk especially when the financial commitment is high. For this reason many manufacturers and sellers offer easy return policy, since this helps to reduce level of risk and make the purchase more likely.
They evaluate alternatives
Having found out about several competing brands the consumers will evaluate the alternatives, based on the information collected or remembered. Too much choice leads to decision paralysis in which the person finds it impossible to choose. This is why there is a specific consideration set, which is the group of products or services that will most closely meet the need. The consideration may be the price, which is generally used as an indicator for quality. Confusion or ambiguity leads to a decision being postponed and also to loyalty information by sticking to the tried and tested rather than risking a mistake with something new. For marketers it is often a challenge of product becoming the one within consideration set.
It is also important to understand as a marketer that the decision making process may contain number of interrupts. This is when the purchasing decision is temporary suspended. These can come from stores promotions and eye-catching posters of other products, physiological needs, unexpected information like changes in product attributes, or conflicts when the customer realises that the original decision plan cannot be followed. The strength of interruption is important.
They purchase
The actual purchase comes next, the consumer will locate the desired brand and perhaps choose a supplier or manufacturer they have faith in.
They evaluate purchase
At this stage the consumer will decide whether the purchase has been a success or not. Generally, this would be a comparison between what they have been expecting to get and what was actually purchased. Before the purchase, the customer would develop an expectation towards the item. From the marketing viewpoint, it is generally better to ensure that the customer has accurate information about the product beforehand as to avoid post-purchase disappointment. The dissatisfaction than can be expressed in customer complaints, or private responses to a friend or even third-party complaints to consumer organisations, trade associations or even legal action.
The easiest way to avoid it is to provide products or services which meet the customers expectations. But also the customer complaints process is very important here. A consistent failure to resolve issues may lead to damage of the company's reputation. It is therefore imperative to give customer a change to compliant.
Customer divestment
Divestment refers to the way customer dispose of the product after its use. This point is of increasing importance to marketers, both in terms of green marketing and in terms of making possibility of making sales of new products.
How industrial buyers think?
Industrial buyers differ from customers in that they are more formalised in their buying behaviour. This is due to bigger order values, reciprocity, more people in the decision process and more complex techniques in terms of buying and negotiating.
Organisational buyers buy to meet the organisational needs, but it also should be remembered that they have their personal needs. It might be a need for prestige, career opportunity, for friendship and social needs and other personal factors, attitudes and believes. A good marketer will not ignore these personal needs of the buyer.
Regarding the organisations needs however, the most considerations generally evolve around the quality, delivery, service and price.
The industrial purchase task may be a new task in which the buyer will need to develop a problem solving behaviours. The vendor here has the opportunity to establish a relationship which may last for many years, New tasks will often involve a greater degree of negotiations. In circumstances where two firms have established a relationship, buyers will often track the performance of their suppliers. Buying firms which regularly monitor their supplier performance can gain competitive advantage, because they can control their purchaers much better.
Industrial buyers decisions are barely made by isolation. Usually several people are involved in the process at different stages.
Gatekeepers such as secretaries and receptionists control the flow of information to the decision makers. Often they will act as a barrier to sales people, and see their role to being primary to prevent interruptions to the decision makers work pattern.
Influencers are those individual who "have the ear" of the decision-makers. They could be people within the firm, whom the decision-makers trust.
Users are those who will actually use the product.
Deciders are the ones who make the real decision. These are usually the hardest to influence, since they are usually the senior people in the decision-making unit. They are also sometimes hard to identify. They are not necessarily buyers, but they do hold the real power in the buying decision.
Buyers are those ones given the task to actually going through the process of buying. The buyers may be given a very specific brief of the decider and may have a very little room to negotiate.
From the viewpoint of the industrial marketer it is essential to get to the deciders in some way rather to wait for the buyers to make the first contact. If the seller has managed to approach the decision maker quick enough, the seller can persuade the decision maker and win over the competition.
In the end, organisations do not make purchases. Therefore it is important that individuals make purchases on behalf of organisations. Therefore we also ays deal with human beings, who have their needs and attitudes. Purchasing decisions are not made entirely rationally. Often the personal representative of the buying and selling companies has the biggest role in the purchase. Buyers will naturally want to deal with someone they know and trust.
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