Business Buyer Behaviour

We were talking about Business-to-consumer (B2C, sometimes also called Business-to-Customer), so far. But recently we have started something quite different and contrasting- Business-to-business (B2B). It describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer.

Some people think marketing is marketing and whether you are marketing to consumers or marketing to businesses, you are still just marketing to people. But it is not the truth. Business-to-business (B2B) and business-to-consumer (B2C) marketing is different.

The volume of B2B transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving subcomponent or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windshields, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.

Main differences:

B2C
•Product driven
•Maximize the value of the transaction
•Large target market
•Single step buying process, shorter sales cycle
•Brand identity created through repetition and imagery
•Merchandising and point of purchase activities
•Emotional buying decision based on status, desire, or price

B2B
•Relationship driven
•Maximize the value of the relationship
•Small, focused target market
•Multi-step buying process, longer sales cycle
•Brand identity created on personal relationship
•Educational and awareness building activities
•Rational buying decision based on business value


More about this topic you will find here:
http://vista-consulting.com/marketing-b2b-vs-b2c/

We were talking about types of organisations:

Government organisations
• Health
• Environmental protection
• Education
• Policing
• Transport
• National defence and security

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

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

Later, we were working in groups through the task sheet giving our best guesses to answer the questions. We had to consider three organisations:

1. Coca Cola
2. A Financial Services software house
3. An MRI Scanner manufacturer

For example, we agreed that Coca-Cola's customers are distributors and retailers. Financial Services Software supply companies (e.g banks) and MRI Scanner Manufacturer's customers are mainly hospitals and the private sector.

The number of potential customers and order value differs in each case:
• Coca Cola (UK) 50 million / £1-£5
• Financial Services software – 100s – all banks, building societies, mortgage lenders, loan companies / £50, 000
• MRI scanner manufacturer – 1 The NHS (possibly private hospital group) / £825, 000

We considered FTPEPS for these organizations as well:
Coke:
F – none
T - none (impulse)
P - none
E – none
P – none
S - none

FS Software:
F – high
T - high
P - high
E – High
P – Low
S - Low

MRI Scanner Manufacturer:
F - £825,000 of restricted budgets
T – possibly years
P – if it malfunctions it could kill by misdiagnosis
E – high risk for postholder
P – it could kill
S – local community may have helped to raise funds – many interested publics

In B2B Close-Supplier Relationship is very important. There are fewer clients, more money - more risk.

The better a business can manage the relationships it has with its customers the more successful it will become. It is called Customer relationship management.

CRM is not just the application of technology, but is a strategy to learn more about customers' needs and behaviours in order to develop stronger relationships with them.

CRM includes many aspects which relate directly to one another:
•Front office operations — Direct interaction with customers, e.g. face to face meetings, phone calls, e-mail, online services etc.
•Back office operations — Operations that ultimately affect the activities of the front office (e.g., billing, maintenance, planning, marketing, advertising, finance, manufacturing, etc.)
•Business relationships — Interaction with other companies and partners, such as suppliers/vendors and retail outlets/distributors, industry networks (lobbying groups, trade associations). This external network supports front and back office activities.
•Analysis — Key CRM data can be analyzed in order to plan target-marketing campaigns, conceive business strategies, and judge the success of CRM activities (e.g., market share, number and types of customers, revenue, profitability).


We were talking also about Derived Demand. According to Investopedia it is a term used in economic analysis that describes the demand placed on one good or service as a result of changes in the price for some other related good or service. It is a demand for some physical or intangible thing where a market exists for both related goods and services in question. The derived demand can have a significant impact on the derived good's market price.

Tickets are a derived demand for entertainment. Entertainment is the demand being satisfied when a ticket is bought; it is purely a means to an end. The ticket is not an end in itself. The ticket is merely a license to attend a specified event at a specified time and place. The ticket agency is merely that, an agent of the principal (the event owner) authorized to make a transaction with a prospective attendee on the behalf of the principle.

Factors Affecting Demand Elasticity:
•The availability of substitutes
•Amount of income available to spend on the good
•Time

The next important thing which Ruth asked us was how many people are involved in a purchase of a can of coke, a software system for a bank and MRI scanner. In order to buy coke there is a need of one person but the purchase of MRI scanner is much more complex and it involves a lot of people.

We were talking about three important terms as well:

•Direct purchasing - Investors making direct purchases deal directly with the fund company over the phone, in person at investor centers, or by mail.
•Reciprocity - Products not always bought for cash, they can be exchanged between the two companies.
•Leasing - A contract granting use or occupation of property during a specified period in exchange for a specified rent.

More about B2B and B2C you will find in this article:
http://www.bizjournals.com/denver/stories/2006/04/03/focus2.html

Culture

Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the universe, and material objects and possessions acquired by a group of people in the course of generations through individual and group striving.
Culture is the systems of knowledge shared by a relatively large group of people.

Culture is communication, communication is culture.

More definitions you will find here: http://www.tamu.edu/classes/cosc/choudhury/culture.html




The word "culture" is most commonly used in three basic senses:
•excellence of taste in the fine arts and humanities
•an integrated pattern of human knowledge, belief, and behavior that depends upon the capacity for symbolic thought and social learning
•the set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group.

According to Wikipedia, cultures are externally affected via contact between societies, which may also produce - or inhibit - social shifts and changes in cultural practices. War or competition over resources may impact technological development or social dynamics. Additionally, cultural ideas may transfer from one society to another, through diffusion or acculturation. In diffusion, the form of something (though not necessarily its meaning) moves from one culture to another. For example, hamburgers, mundane in the United States, seemed exotic when introduced into China.

Cultural differences manifest themselves in different ways and differing levels of depth. Symbols represent the most superficial and values the deepest manifestations of culture, with heroes and rituals in between.
•Symbols are words, gestures, pictures, or objects that carry a particular meaning which is only recognized by those who share a particular culture.
•Heroes are persons, past or present, real or fictitious, who possess characteristics that are highly prized in a culture. They also serve as models for behaviour.
•Rituals are collective activities, sometimes superfluous in reaching desired objectives, but are considered as socially essential. They are therefore carried out most of the times for their own sake (ways of greetings, paying respect to others, religious and social ceremonies, etc.).
•The core of a culture is formed by values. They are broad tendencies for preferences of certain state of affairs to others (good-evil, right-wrong, natural-unnatural). Many values remain unconscious to those who hold them. Therefore they often cannot be discussed, nor they can be directly observed by others. Values can only be inferred from the way people act under different circumstances.
•Symbols, heroes, and rituals are the tangible or visual aspects of the practices of a culture. The true cultural meaning of the practices is intangible; this is revealed only when the practices are interpreted by the insiders.

Manifestation of Culture at Different Levels of Depth:

A variable can be operationalized either by single- or composite-measure techniques. A single-measure technique means the use of one indicator to measure the domain of a concept; the composite-measure technique means the use of several indicators to construct an index for the concept after the domain of the concept has been empirically sampled.

Hofstede (1997) has devised a composite-measure technique to measure cultural
differences among different societies:
•Power distance index: The index measures the degree of inequality that exists in a society.
•Uncertainty avoidance index: The index measures the extent to which a society feels threatened by uncertain or ambiguous situations.
•Individualism index: The index measure the extent to which a society is individualistic.
•Masculinity index (Achievement vs. Relationship): The index measures the extent to which the dominant values are assertiveness, money and things (achievement), not caring for others or for quality of life. The other end of the spectrum would be femininity (relationship).




Cultural norms are behavior patterns that are typical of specific groups. Such behaviors are learned from parents, teachers, peers, and many others whose values, attitudes, beliefs, and behaviors take place in the context of their own organizational culture.

This table shows the comparison of cultural norms and values:
http://www.augsburg.edu/education/edc210/norms-values.html


It is interesting to see how different countries celebrate Christmas.



For Americans it is Santa and his reindeer, hot chocolate and candy canes; for Egyptians it is feast gifts and fireworks, picnics and sports. All across the globe, Christmas is celebrated with traditions and customs that differ and change according to culture.

Brazil
Father Christmas is called Papai Noel. Many Christmas customs are similar to USA or UK. For those who have enough money, a special Christmas meal will be chicken, turkey, ham, rice, salad, pork, fresh and dried fruits, often with beer. Poorer people will just have chicken and rice.

France
In France, Christmas is always called 'Noël. Everyone has a Christmas tree, sometimes decorated in the old way with red ribbons and real white wax candles. Fir trees in the garden are often decorated too, with lights on all night.

Sweden
The most important day is Christmas Eve. A special Christmas meal is eaten on Christmas Eve - ham (pork), herring fish, and brown beans - and this is the time when families give presents to each other. Many people attend a church meeting early on Christmas Day.

Poland
In Poland people start preparing for Christmas at the beginning of December. On Christmas Eve when the first star appears in the sky people sit at a table. They do not forget about leaving an empty place for an expected guest.
At midnight many people go to church to attend a special mass. 25 December is spent at home. The next day people pay and receive visits. Christmas in Poland is the most familiar, traditional and joyful time.
The most popular dishes are: red borsh with pies, carp: fried or in a jelly, pies with mushrooms, herrings, poppy-seed cake. Before the supper members of the family share the holy wafer, after supper they give each other presents which were put under the Christmas tree.


The rest you can find here: http://www.soon.org.uk/country/christmas.htm

We were talking about stereotypes as well. A stereotype is a preconceived idea that attributes certain characteristics (in general) to all the members of class or set. The term is often used with a negative connotation when referring to an oversimplified, exaggerated, or demeaning assumption that a particular individual possesses the characteristics associated with the class due to his or her membership in it. Stereotypes can be used to deny individuals respect or legitimacy based on their membership in that group.

Some stereotypes related to UK:

'Men wearing bowler hats, pin striped suite,
a newspaper under the arm and
carrying a long unopen umbrella, double-decker buses cream teas'

'Long shadows on county cricket grounds, warm beer,
invincible green suburbs, dog lovers and
old maids bicycling through the morning mist'
- John Major (Ex Prime Minister )

'Beer, honesty, Bulldog-type, Royal Family, Cricket, the Weather'
- Dickie Bird (Famous English cricket umpire)



After presenting the topic, Ruth divided us into groups and asked to prepare a presentation about one country. In my case – it was Poland :)

First of all, six famous people who come from my country: Lech Wałęsa, Jan Paweł II, Krzysztof Penderecki, Mikołaj Kopernik, Fryderyk Chopin and Maria Skłodowska-Curie



Our favourite food: dumplings (filled with cheese/meat/fruit), special type of cheese made in mountains (I love it!), pickled cucumbers and sauerkraut stew.



Then our national sport. I think it is volleyball and maybe skiing.



The most popular Polish sportsmen:



When it comes to religion, Poland is predominantly Catholic. Nine out of every ten Poles belong to the Catholic church, and the majority—over sixty percent—attend church regularly.

Typical Polish TV advert which reflects the national character is Knorr advert:




One of songs Polish people are proud of:



Polish best newspaper: Gazeta Wyborcza, in English - Electoral Newspaper:




And this is the trailer of the film you should definitely watch: KATYŃ. It is very short but really moving. (this trailer is with English subtitles)
The film was made by Andrzej Wajda, Polish film director, recipient of an honorary Oscar



It is worth seeing, isn’t it?

I read some interesting chapters from book written by Morris Desmond: People Watching. Body language is very interesting topic, unfortunately very extensive as well. That is why I copied only one page... It is something we were talking about during the lecture :)



To find out more you can always read this book ;)

Social Classes

SOCIAL CLASS AND PUBLIC DISPLAY

Since prehistory, all societies have perceived hierarchy among their members. Leaders and followers, strong and weak, rich and poor: social classifications are universal. Humans have invented numerous ways to classify people—by wealth, power, or prestige; by ability, education, or occupation; even by where they live.

The term "social class" originally referred to groups of people holding similar roles in the economic processes of production and exchange, such as landowner or tenant, employer or employee. Such positions correspond to different levels of status, prestige, and access to political power, but social class eventually took on a more generic meaning and came to refer to all aspects of a person's rank in the social hierarchy.



The Determinant of Social Class in society is the combination of three variables:
occupation, education, and income. In a very general way, these variables all measure the same thing.

"Someone from a very rich family will probably go to schools where kids from other very rich families go. They will have opportunities afforded to them by virtue of their family's money. These kids will fraternize and make friends. Some will fall in love and marry. They will graduate and find employment in companies and law firms owned and operated by their friends and their parents, or go to work for their parents. Get it? A few people inherit large sums of money from their families. These folks are few in number, although it is true that the top 1/5th of the population controls well over 50% of any nation's wealth, which amounts to a lot of inherited social power (for example, the Royals in British society)."

"Similarly, someone from an very poor family will probably go to schools provided by the state. Here they will have to make choices between continued education and early entry into the labor force, provided there is opportunity for them in the labor force. They will meet, make friends, and find spouses in this section, and probably go to work for a company. They'll be the last hired and the first fired."

The kind of education we receive also says something about our social class - anybody who could spend four years in college (whether or not they get their way paid) is obviously in a preferred position of higher status.

"Our Occupation, Education and Income imply a lifestyle, something about family background, special responsibilities, and certain privileges that are enjoyed. We use our social status to get us things - we wear status symbols as a means of recognizing membership in our class. Since we all look alike basically under under our clothes, we use cars, opulent surroundings, special and expensive clothing, and so on to dress according to our class. After all - the rich can smell different from the rest of us if they want to - they spend more time on themselves and spend less time doing the dirty work of life."

The UK Office of National Statistics (ONS) produced a new socio-economic classification in 2001. The reason was to provide a more comprehensive and detailed classification to take newer employment patterns into account.

National Statistics Socio Economic Classification (2001):

Group - Description: Old equivalent
1 -Higher Professional and Managerial: A
2 -Lower Managerial and Professional: B
3 -Intermediate occupations: C1 and C2
4 -Small Employers and non professional self-employed: C1 and C2
5 -Lower Supervisory and technical: C1 and C2
6 -Semi Routine Occupations: D
7 -Routine Occupations: D
8 -Long term unemployed: E

The social grade classification created by the National Readership Survey over 50 years ago looked different:

Grade - Status: Occupation
A - Upper middle class: Higher managerial, administrative or professional
B - Middle class: Intermediate managerial, administrative or professional
C1- Lower middle class: Supervisory or clerical and junior managerial, administrative,professional
C2- Skilled working class: Skilled manual workers
D - Working class: Semi and unskilled manual workers
E - The lowest level of subsistence: Casual or lowest grade workers, pensioners

The significance of social class is this:
•Life opportunities are determined by it
•Upper class members live longer and are healthier
•Those with less than 5 years of education are twice as likely to die early.
• . . . and experience more days of illness
• . . . and are more likely to have premature babies and babies with congenital birth defects.

During the lecture we were comparing some ads created for different social classes.
This is what I found:





The first one definitely relates to luxurious upper class and the second one to the lower middle class. In the first case we can hear slow, classic music, sophisticated background... And in Knorr advert the music is much quicker, less delicate and the whole ad takes place in the studio.

These ads are also related to upper class:

Pester Power

According to International Journal of Marketing Pester Power is “a pejorative term for children making requests of their parents.”
However, academic researchers prefer less loaded terminology and define it as “purchase influence attempts. Or purchase request behaviour.”

This phrase emerged in the USA in the late 1970s. For example, this from The Washington Post, February 1979:
"'They (the children) use all the pester power they can muster’ to talk their parents into purchases, a narrator warned."

"Children have long been able to influence what their parents bought on their behalf, by making it easier for the parents to give in than to endure relentless badgering. The fact that this wasn't a significant enough phenomenon to be given a name until the late 20th century is indicative of the changing nature of child/parent relationships in western societies. Parents are now more likely to take a child's demands seriously, whereas in earlier times they were expected to be content with whatever they were given. Also, the increased pressure on parents to work longer hours has lead to a society that in increasingly cash rich and time poor, which makes it a more attractive option to buy their way out of the time-consuming task of fending off demands. "

Spungin (2004) states that "by advertising to children, companies are encouraging the child to nag their parents into buying something that is not good for them, they don't need or the parent cannot afford".

According to that article 21% to 40% of sales of jeans, burgers and other products occur because a child asks for the product. Despite the fact that the television is the main source of ads for children, Bas (1998) observed that what children ask for tend to be the kind of thing their friends are buying.

We were watching “Kids Grow Older Younger” video during the lecture. Sociologist were testing children’s brand awareness. Obviously, they recognise brands which are familiar to them, such as Barbie or PlayStation.

Therefore, for many marketers children become the key target audience.
Children often observe what their friends have got and then ask: “Can I have this, mummy?” again and again. This is what we call Pester Power.
As it turned out, brands are incredibly important for children as they feel the peer pressure even more than other age groups. However, the brand is not as important for girls as for boys in the age of 10.

What is interesting, one of the researchers visited 10 years old girl’s room. He found Bart Simpson’s poster, a styling gel, some magazines and TV set.

As I found out from this video, there are two types of behaviour of mother+children:
•Progressive
•Protecting

Over the last 30 years we became a consumption society. Therefore, it is very important to think how much children influence shopping.

Children want to be fashionable even if they are very young. They leave toys, try to watch soap operas and adult ads.
Adult’s world seems to be more interesting. Kids became more mature in terms of consumption.

According to Pocket Money Mintel report:
"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."

He claims that the vast majority of children are not just reliant on a single source for their pocket money, but receive additional funds from other areas.
What is more, the child-centred society of today means that children may be indulged by parents even when times are hard. Unfortunately, children have now more choices on what they can spend their pocket money on.

What is interesting, children across the three age groups from less affluent households tend to receive more pocket money than those from the AB socio-economic group. Children from AB households receive on average significantly lower amounts (£2.94) of pocket money than other groups, while DEs receive the most (£3.33).

Mintel forecasts that the total weekly income for 7-19s will increase by 6% at current prices to reach a total of £67.2 by 2013. He noticed that clothes are the area of highest average spend for 11-14-year-olds. However, there has been a slight fall reflecting the pressure on this group’s income levels as well as deflation within the clothing market. Computer/video games are ranked second for 11-14-year-olds but both the number of children spending and the average amount spent has fallen significantly. The 15-19s are having to spend more on petrol and travel due to generally rising prices in these sectors.
Moreover, over the last two years, there has been a significant drop in the proportion of 15-19-year-olds who obtain their income from paid employment.


Agreement with the statement ‘My parents buy me everything I want’, 2007

"The stages of intellectual development formulated by Piaget appear to be related to major developments in brain growth. The human brain is not fully developed until late adolescence or in the case of males sometimes early adulthood. We often expect children to think like adults when they are not yet capable of doing so. It is important that parents know what to expect from their child as they develop and to be sure that the expectations they may have for their child at a given age are realistic."

Jean Piaget distinguished four stages of development
-Between 0-24 months old. That stage begins with a simple actions like gasping, sucking and ends with evidence of an internal representational system. Symbolizing the problem-solving sequence before actually responding. Deffered imitation.
-Between 2-7 years old. Between 2-4 years old a child begins to use symbolic rather than simple motor play. A child can think about something without the object being present by use of language. Older child's between 4-7 years old speech is more social, less egocentric.The child is able to show principles underlying best behaviour.
-Between 7 to 11 years old children's characteristic behaviour is evidence of logical, characterised though. The child is capable of concrete problem-solving.
-Between 11 to 15 years old thoughts are more abstract, incorporating the principles of formal logic. Thinking becomes less tied to concrete reality. Formal logical systems can be acquired and a child can handle proportions, algebraic manipulation and other purely abstract processes.

You can watch a great video about The Commercialization of Childhood:


I found very interesting article related to Pester Power:
http://www.thesimpledollar.com/2008/04/13/born-to-buy-pester-power/

And this is a quotation from thi article:
"Trans-toying is most noticeable in the supermarket aisle, where packaged goods companies have gotten ingenious in their attempts to turn what we eat into things kids can play with. Frito-Lay has come up with colored Cheetos, now available in a mystery color version. You have to eat them to see what color your mouth and tongue become. Lucky Charms changes what it does with every box. Quaker Oatmeal contains dinosaur eggs and other hidden treasures. And Ore-Ida has come out with Funky Fries, which are blue, or sugar coated, or cocoa flavored."

The role of Family in marketing

"Call it a clan, call it a network, call it a tribe, call it a family. Whatever you call it, whoever you are, you need one." Jane However

The basic structure of the family has changed drastically throughout the years. Some examples of the families that now exist are: traditional families, single parent families, cultural families, multi-generational families, mixed families, and same-sex parent families. Diversity is present in every individual and in every family.


There are four different kinds of families:
1. Nuclear family- a family group consisting of most commonly, a father and mother and their children

2. Extended family(or joint family)
Extended families can include, aside from parents and their children:
•spouses of children, inlaws
•cousins, aunts, uncles, nieces, nephews,
•foster children/adopted children etc.

3. Family of orientation- the family one is born into.

4. Family of procreation- the family founded through marriage

“One can also distinguish one’s natal family or family of orientation, the family into which one is born, from one’s family of procreation, the family one creates through, and following, one’s marriage” (Parkin, 1997, p. 30).

It is obvious that family pattern is different now than 20 or 30 years ago. The main changes are:

•Increasing number of births out of marriage
•Increase in one parent families (1/7)
•Increase in step families
•Nuclear family is being challenged by the “horizontal” family of step children and step parents
•Increasing no. of widowed living on own

What is more:

•Average household size is 2.4 people in 2001
•Dramatic increase in one person households 12% in 1961, 26% in 1990, 6.8 million in 2001 – 28%
•More than 50% of women over the age of 65 years live on their own
•Life expectancy for women is 78.8 years for men is 73.2 years
•Divorces have increased to 1 in 3
•7% of households in 2001 – single parents
•Employment rate of women is one of the highest in Europe
•One quarter of married women work 30 hours plus

A family’s needs are affected by the number of children, their ages and whether one, two or more adults are employed outside the home.



"The emotional and intellectual stages you pass through from childhood to your retirement years as a member of a family are called the family life cycle. In each stage, you face challenges in your family life that cause you to develop or gain new skills. Developing these skills helps you work through the changes that nearly every family goes through."

"Not everyone passes through these stages smoothly. Situations such as severe illness, financial problems, or the death of a loved one can have an effect on how well you pass through the stages. Fortunately, if you miss skills in one stage, you can learn them in later stages."
The stages of the family life cycle are:
•Independence.
•Coupling or marriage.
•Parenting: Babies through adolescents.
•Launching adult children.
•Retirement or senior years.

"Whether you are a parent or child, brother or sister, bonded by blood or love, your experiences through the family life cycle will affect who you are and who you become. The more you understand about the challenges of each stage of the cycle, the more likely you are to successfully move on."

More about this topic:
http://www.childhoodaffirmations.com/general/family/stages.html


Field (1969) identified three dimensions to determine relative influences of husband, wife, child:
•discernment or technical know how
•price - expensiveness - who pays
•satisfaction - who uses

Family Buying Organisation:
•Gatekeeper
•User
•Influencer
•Buyer
•Decider

"Some studies investigate the effect of one component of spousal influence - family power - on the innovative consumer decisions perceived to be made independently by one's mate. A wife, by virtue of her greater relative exercise of family power, exerts a high degree of influence over the innovative consumer decisions made by her husband. Specifically, it was hypothesized that a wife will have more influence over the choices perceived to be made by her husband than will he."

Family member influence in Household decision making:
http://www.jstor.org/pss/2488992

Children’s influence on household purchases:
•Research shows that many family purchases other than toys are influenced by children
•Children tend to be heavy TV viewers so likely to be exposed to more ads than other groups

Parents of young children have an important role to play in protecting their kids from invasive marketing, and in educating them about advertising from an early age.

According to Consumer Reports magazine, "young children have difficulty distinguishing between advertising and reality in ads, and ads can distort their view of the world."

Research has shown that children between the ages of two and five cannot differentiate between regular TV programming and commercials. Young children are especially vulnerable to misleading advertising and don't begin to understand that advertisements are not always true until they're eight.

According to the Canadian Toy Testing Council the biggest area of concern with toy ads in Canada is exaggeration. Young children often think a toy actually can do a lot more than it can because of the way toys are portrayed in advertisements.

Generational Marketing

"The method of marketing to a specific generation is affecting the way that we promote and sell products and services. We are all a product of our generation. Each generation have their own characterestics, 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."

There are four popular generational categories that most marketers tend to focus on.
They include:
1.Millenials or Generation 2001ers, born after 1980
2.Baby Busters or Generation Xers born between 1965 and 1980
3.Baby Boomers born between 1946 and 1964
4.Mature Citizens born between 1909 and 1945

In order to market effectively to a generation we must find a way to grab their attention, by using a message that resonates with them. Generational determined lifestyles and social values exercise as much influence on buying and purchasing as more commonly understood demographic factors like income, education, and gender do - perhaps even more.

To succeed in generation marketing we must understand how the motivation of our consumers correlate with the underlying values of their generation. When we know this we are able to customize our message to cater to the generation when it comes to our products and services. We can then present the message with your products, services, and communication to their needs and desires.

Of course, every generation ultimately will pass through the same life stages, from youth to old age. As the younger generations find their place in society as consumers, employees and parents, it becomes more and more important for businesses to acknowledge this soon-to-be-powerful demographic. We have to build brand loyalty with them now, and we may reap the results for the rest of their lives.



Marketer’s Age Generation includes much more groups:
1.Pre-school
2.Children
3.Tweens
4.Teens
5.Generation Y
6.Generation X
7.Baby Boomers (young)
8.Baby Boomers (old)
9.Grey
–Over 55s
–Young Olds
–Old Olds
–Silver Surfers
–Skiers

UK resident population trends

I am going to write more about Generation X
Those people in their late twenties to early thirties belong to Generation X or those born between 1965 and 1977 (40 million people).

Generation X is a term used to identify people born after the post-World War II increase in birth rates (the baby boom) The term has been used in demography, the social sciences, and marketing, though it is most often used in popular culture.

In the UK the term was first used in a 1964 study of British youth by Jane Deverson.
Deverson was asked by Woman's Own magazine to interview teenagers of the time. The study revealed a generation of teenagers who "sleep together before they are married, don't believe in God, dislike the Queen, and don't respect parents," which was deemed unsuitable for the magazine because it was a new phenomenon.


Deverson, in an attempt to save her research, worked with Hollywood correspondent Charles Hamblett to create a book about the study. Hamblett decided to name it Generation X. Douglas Coupland's 1991 novel, Generation X: Tales for an Accelerated Culture, about young adults (who were then in their late twenties) in the late 1980s, helped to popularize the term.

Generation X values espouse community, relationships, altruism and entrepreneurship.

Coming age after Vietnam, they witnessed the end of the cold war and saw the fall of the Berlin wall. This generation saw the inception of the home computer and later the Internet, as a tool for economic purposes: Dot.coms, MTV, Grunge music, Hip hop culture and Security-Moms attributed to this generation.

Unfortunately, they experience also some social problems: homelessness, AIDS and fractured families.

However, the US Census Bureau cites this group (Generation X) statistically as holding the highest education levels when looking at age group.

The generation X tend to has its own favourite brands, e.g. Apple, Levis, Lee, Nike etc.

"Gen X'ers were the first generation raised where consumption is a way of life,
X'ers buy because they want it."



"My name is Bill. I’m looking for a new computer and I’ve heard about Apple."



What is more, , generation X likes dark, sombre, intuitive and moody music. Their favourite artist is Michael Jackson.

Generation X distinguished a few sub-cultures, for example: Yuppies, New romantic, Gothz, Metal headz.



Furthermore, they are not so trusting on marketing. At this point in time, they look for a balance between work and leisure. Gen X-ers are close to their parents and they tend to live at home. They are not drawn to traditional forms of advertising such as hyping up products.
Gen X-ers express their need to stay in control by purchasing communications equipment such as:
·Beepers
·Fax machines
·Mobile phones

They prefer to buy products based on their practicality including personal care products. They are not so into latest trends or fads in clothing. They prefer foods that are healthy at the same time quick to prepare.

More reading about marketing generations: http://www.brandchannel.com/features_effect.asp?pf_id=136

Group Behaviour

A group can be defined as "two or more humans that interact with one another, accept expectations and obligations as members of the group, and share a common identity." By this definition, society can be viewed as a large group, though most social groups are considerably smaller.
"A true group exhibits some degree of social cohesion and is more than a simple collection or aggregate of individuals, such as people waiting at a bus stop. Characteristics shared by members of a group may include interests, values, ethnic or social background, and kinship ties. According to Paul Hare, the defining characteristic of a group is social interaction."

When people act as a group they are stronger!

Groups can offer support and protection

It is easy to rip a single sheet of paper, but harder to tear a pack!



Types of groups:
-Primary groups are small groups with intimate, kin-based relationships, for example: families.
-Secondary groups, in contrast to primary groups, are large groups whose relationships are formal and institutional. They may last for years or may disband after a short time. The formation of primary groups happens within secondary groups.
-Reference groups are groups to which the individual conceptually relates him/herself, and from which he/she adopts goals and values as a part of his/her self identity.

There is also another classification of groups:




An example of DISASSOCIATIVE group:



And an example of chavs ;)



Aspirational adverts are very important in marketing. They definately influence customer's purchase. For me this is advert is absolutely fabulous:



We were talking about Maslow's hierarchy of needs as well. This diagram shows Maslow's hierarchy of needs, represented as a pyramid with the more basic needs at the bottom.



Maslow's hierarchy of needs is predetermined in order of importance.

The need for belonging can often overcome the physiological and security needs, depending on the strength of the peer pressure; an anorexic, for example, ignores the need to eat and the security of health for a feeling of control and belonging.
All humans have also a need to be respected, to have self-esteem, self-respect, and to respect others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel accepted and self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem.

Social comparison theory is also very important. It is a theory initially proposed by social psychologist Leon Festinger in 1954. This theory explains how individuals evaluate their own opinions and desires by comparing themselves to others.

"In his initial theory, Festinger hypothesized several things. First, he stated that
humans have a drive to evaluate themselves by examining their opinions and abilities in comparison to others. To this, he added that the tendency to compare oneself with
some other specific person decreases as the difference between his opinion or ability and one’s own become more divergent. He also hypothesized that there is an upward drive towards achieving greater abilities, but that there are non-social restraints which make it nearly impossible to change them, and that this is largely absent in opinions" (Festinger, 1954).

Group behaviour is based on norms and values. All human groups have a culture consisting of shared values and norms. In social work groups, norms are standards of behavior that all members are expected to follow.
Norms reflect group values; for example, the norm of making group decisions by
consensus reflects somewhat different values than the norm of “majority rules.”
Norms determine the way in which groups solve problems, make decisions, and do their
work. They influence interactions between members and between the group and the facilitator.

Group norms tend to cluster around the following types of activity:
-Participation
-Decision-making
-Mutual aid
-Affective expression

More about this topic you will find in this article:
http://www.usd.edu/med/socialwork/dnorris/groupnorms.pdf

Group behaviour depends on your perceptions
In order to understand this statement we were watching some interesting videos showing how important is group pressure and how it influences our behaviour.




This is my favourite:


As Ruth said, the power to make an individual conform to group pressure and influence depends upon:
-importance of membership
-fear of negative sanctions
-degree of support from others

An interesting article explaining how group influence on product and brand purchase decision: http://www2.bc.edu/~woodsiar/nov%202%20reference%20grp.pdf