Consumer And Business Market Pdf
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There was a frequent dismissal of the idea that b2b marketing — and therefore the techniques used to explore these markets — were in any meaningful way distinct from consumer marketing. Over the past 20 years, however, b2b marketing has emerged as a discipline in its own right and divergences in marketing practice have been accentuated.
- The Implications of Business-to-Business and Consumer Market Differences for B2B Branding Strategy
- Business Marketing Vs Consumer Marketing
- How to Market in a Downturn
By integrating existing conceptual models and research findings, this effort examines the noteworthy differences between the B2B and the consumer market contexts and the implications of those differences on the formulation of B2B brand strategies. This is a preview of subscription content, access via your institution. Aaker, D. Google Scholar. Achrol, R.
The Implications of Business-to-Business and Consumer Market Differences for B2B Branding Strategy
In every recession marketers find themselves in poorly charted waters because no two downturns are exactly alike. Companies need to […].
Because no two recessions are exactly alike, marketers find themselves in poorly charted waters every time one occurs. Consumers in a recession can be divided into four groups: The slam-on-the-brakes segment, which feels the hardest hit, reduces all types of spending.
Pained-but-patient consumers, who constitute the largest segment, also economize in each area, though less aggressively. Comfortably well-off individuals consume at near-prerecession levels but become a little more selective and less conspicuous about their purchases. Live-for-today consumers pretty much carry on as usual, responding to the recession mainly by extending their timetables for making major purchases.
People may switch segments if their economic situations change for the worse. All groups prioritize consumption by sorting products and services into the following categories: essentials central to survival or well-being , treats justifiable , postponables can be put off , and expendables unnecessary or unjustifiable.
Many make the mistake of cutting costs indiscriminately, which can jeopardize long-term performance. How should you market in this downturn? Resegment consumers according to their emotional responses to the recession:. Tune your marketing strategies accordingly. The shock of the current downturn and anger over the malfeasance that fueled it will likely accelerate preexisting consumer trends toward reduced materialism, commitment to sustainability, higher expectations of corporate social responsibility, and resentment of marketing that treats people as soulless, mechanical consumers.
Companies need to understand the evolving consumption patterns and fine-tune their strategies accordingly. During recessions, of course, consumers set stricter priorities and reduce their spending. As sales start to drop, businesses typically cut costs, reduce prices, and postpone new investments. Marketing expenditures in areas from communications to research are often slashed across the board—but such indiscriminate cost cutting is a mistake.
Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.
But by all accounts, this recession is the severest since the Great Depression. The wave of bad economic news is eroding confidence and buying power, driving consumers to adjust their behavior in fundamental and perhaps permanent ways.
They now realize that spending in much of Europe and the United States over the past two to three decades was built on a quicksand of debt and dwindling savings and home equity. Marketers abetted consumers in defining the good life in material terms and urging them to live beyond their means.
In the ensuing meltdown, consumers face piles of bills, stagnant or falling incomes, and shrinking nest eggs. Consumer Confidence Index sank to the lowest level since tracking started in These combined effects create a profound challenge for marketers, not only during the downturn but in the recovery that will eventually follow. The first step in responding must be to understand the new customer segments that emerge in a recession. The slam-on-the-brakes segment feels most vulnerable and hardest hit financially.
This group reduces all types of spending by eliminating, postponing, decreasing, or substituting purchases. Although lower-income consumers typically fall into this segment, anxious higher-income consumers can as well, particularly if health or income circumstances change for the worse. Pained-but-patient consumers tend to be resilient and optimistic about the long term but less confident about the prospects for recovery in the near term or their ability to maintain their standard of living.
Like slam-on-the-brakes consumers, they economize in all areas, though less aggressively. They constitute the largest segment and include the great majority of households unscathed by unemployment, representing a wide range of income levels. As news gets worse, pained-but-patient consumers increasingly migrate into the slam-on-the-brakes segment. The great majority of people in a recession fall into the pained-but-patient segment. Comfortably well-off consumers feel secure about their ability to ride out current and future bumps in the economy.
They consume at near-prerecession levels, though now they tend to be a little more selective and less conspicuous about their purchases. It also includes those who are less wealthy but feel confident about the stability of their finances—the comfortably retired, for example, or investors who got out of the market early or had their money in low-risk investments such as CDs.
The live-for-today segment carries on as usual and for the most part remains unconcerned about savings. The consumers in this group respond to the recession mainly by extending their timetables for making major purchases.
Typically urban and younger, they are more likely to rent than to own, and they spend on experiences rather than stuff with the exception of consumer electronics. Regardless of which group consumers belong to, they prioritize consumption by sorting products and services into four categories:.
All consumers consider basic levels of food, shelter, and clothing to be essentials, and most would put transportation and medical care in that category. Beyond that, the assignment of particular goods and services to the various categories is highly idiosyncratic. Throughout a downturn, all consumers except those in the live-for-today segment typically reevaluate their consumption priorities.
As priorities change, consumers may altogether eliminate purchases in certain categories, such as household services cleaning, lawn care, snow removal , moving them from essentials, say, into expendables. Or they may substitute purchases in one category for purchases in another, perhaps swapping dining out a treat for cooking at home an essential.
And because most consumers become more price sensitive and less brand loyal during recessions, they can be expected to seek out favorite products and brands at reduced prices or settle for less-preferred alternatives. For example, they may choose cheaper private labels or switch from organic to nonorganic foods. Still, company budget cuts often affect marketing disproportionately.
Marketing communication costs can be trimmed more quickly than production costs—and without letting people go. In managing their marketing expenses, however, businesses must take care to distinguish between the necessary and the wasteful.
Building and maintaining strong brands—ones that customers recognize and trust—remains one of the best ways to reduce business risk. Surgically trimming the budget is easier to do during a downturn than in prosperous times. Tough times provide an imperative to cut loose poor performers and eliminate low-yield tactics. When survival is at stake, it is easier to get companywide buy-in for revising marketing strategies and reallocating investments. Managers can defy old mind-sets and creatively search for superior solutions to customer needs instead of relying on the next line extension.
The challenge is to make well-defended, case-by-case recommendations about where to cut spending, where to hold it steady, and even where to increase it. Begin by performing triage on your brands and products or services.
Determine which have poor survival prospects, which may suffer declining sales but can be stabilized, and which are likely to flourish during the recession and afterward. Your strategic opportunities during the downturn will strongly depend on which of the four segments your core customers belong to and how they categorize your products or services.
For example, prospects are reasonably good for value-brand essentials sold to slam-on-the-brakes consumers, who will forgo premium brands in favor of lower prices.
Value brands have opportunities with postponable products, as well. Repair services can market to the pained-but-patient group, who will try to prolong the life of a refrigerator rather than buy a new one.
Where the business opportunities are uncertain or declining, it may be time to part with brands or products that were ailing prior to the recession and are on life support now. For those that remain, companies should concentrate their marketing resources on maintaining relevance to core customers in order to sustain brands through the recession and into the recovery. For instance, marketers catering to middle- or upper-income consumers in the pained-but-patient segment may be tempted to move down-market.
This could confuse and alienate loyal customers; it could also provoke stiff resistance from competitors whose operations are geared to a low-cost strategy and who have intimate knowledge of cost-conscious customers.
Marketers that drift away from their established base may attract some new customers in the near term but find themselves in a weaker position when the recession ends. Their best course is to stabilize the brand. Even cash-poor firms would be wise to commit a substantial portion of their marketing resources to reinforcing the core brand proposition.
Reminding consumers of how the brand matters can add to the cushion provided by previous investments in building the brand and customer satisfaction. De Beers came to this realization after it reduced its U. Where opportunities are stable or uncertain but leaning toward stable , firms should push their advantage. In past downturns, consumer goods companies that were able to increase share of voice by maintaining or increasing their advertising spending captured market share from weaker rivals.
On average, increases in marketing spending during a recession have boosted financial performance throughout the year following the recession. Of course, not all increases have raised performance. Therefore, especially in the current, deep recession, resources should be judiciously targeted to viable business opportunities.
Firms with deep pockets can make cost-effective acquisitions that strengthen their brand portfolio or customer base. As the recession winds down, consumers will regain buying capacity but possibly will not return to their old purchasing patterns. Market research should explore whether consumers will go back to familiar brands and products, stay with substitute products, or welcome innovations.
In recessions, marketers have to stay flexible, adjusting their strategies and tactics on the assumption of a long, difficult slump and yet be able to respond quickly to the upturn when it comes. This means, for example, having a pipeline of innovations ready to roll out on short notice. Most consumers will be ready to try a variety of new products once the economy improves.
Companies that wait until the economy is in full recovery to ramp up will be at the mercy of better-prepared competitors. Even during a recession, new products have an important place.
Live-for-today customers, with their undiminished appetite for goods and experiences, often appreciate novelty. And the other segments will embrace new products that offer clear value compared with alternatives. Because new-product activity slows in recessions overall, launches can economically gain visibility. During recessions cash-strapped marketing departments are under pressure to do more with less and demonstrate high returns on investment.
Typically, the share of the advertising budget devoted to broadcast media shrinks, whereas the share that goes toward efforts with more-measurable results, such as direct marketing campaigns and online ads, grows. Point-of-purchase marketing—promoting price cuts or generating in-store excitement—also tends to pick up during recessions.
Switch to media that allow precise targeting of consumers and detailed tracking of their response. For example, choose search-related advertising on Google over banner advertising. Advertise brands jointly with a marketer in a different product category that targets a similar consumer segment. Avoid long-term media commitments at the outset of the downturn; wait for falling spot rates before buying media. Companies with deep pockets should consider locking in favorable rates for the future.
Internet advertising in particular is targeted and relatively cheap, and its performance is easily measured. The new-member sign-up rate at LinkedIn, a site that focuses on professional networking, has doubled in the past year.
Business Marketing Vs Consumer Marketing
Business Marketing: Business Marketing refers to the sale of either products or services or both by one organization to other organizations that further resell the same or utilize to support their own system. Consumer Marketing: on the other hand refers to the transaction of goods and services between organizations and potential customers. The above definitions of business marketing and consumer marketing highlight the difference between the two commonly used terms in marketing B2B and B2C. Business marketers do not entertain consumers who purchase products and services for their end-use. In consumer markets, products are sold to consumers either for their own use or use by their family members. Fast moving consumer goods are items that are sold quickly to the end-users generally at nominal costs.
Consumer buying behavior refers to the study of customers and how they behave while deciding to buy a product that satisfies their needs. It is a study of the actions of the consumers that drive them to buy and use certain products. Study of consumer buying behavior is most important for marketers as they can understand the expectation of the consumers. It helps to understand what makes a consumer to buy a product. It is important to assess the kind of products liked by consumers so that they can release it to the market.
Chapter 3 - Marketing Consumer and Business Market - Free download as Powerpoint Presentation .ppt /.pptx), PDF File .pdf), Text File .txt).
How to Market in a Downturn
Customer Experience in eCommerce eBook. How many times throughout the day do you make decisions? What should I wear today, what perfume should I put on? What am I going to have for lunch? These decisions, however insignificant they may seem, keep marketers up at night.
The selling environment in any business transaction presents unique differences. As such, business markets and consumer markets are different in many aspects, although often overlooked. While the business markets consist of businesses that acquire products and services used in the production of other goods and services, consumer markets consist of businesses that sell goods to the final consumers.
The consumer market pertains to buyers who purchase goods and services for consumption rather than resale. However, not all consumers are alike in their tastes, preferences and buying habits due to different characteristics that can distinguish certain consumers from others. These particular consumer characteristics include various demographic, psychographic, behaviorialistic and geographic traits.
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