Business-to-business...

It is very important to be aware of a big difference between two phrases which only sound similarly: business-to-business and business-to-consumer (B2B and B2C). It a big area of modern marketing. Business to business relations are much more complicated than these related to consumer, where selling a product is only aim. There are many theories worked out for persuading consumers that one product is better than another. But that is the past! Now, it is very important to create relationships between businesses, not only with consumers. A B2B company needs to focus on relationship building and communication using marketing activities that generate leads that can be nurtured during the sales cycle. B2B companies use marketing to educate various players in the target audience because the decision to purchase is usually a multi-step process involving more than one person. (VistaConsulting, 2009)

There are few basic differences between B2B and B2C, especially in using marketing communications:

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

There are a few very important terms related to B2B subject. These are:

Derived Demand – it ultimately derives from the demand for consumer goods. The dependence of derived demand encourages B2B marketers to sometimes promote their products directly to final consumers to increase business demand.

Inelastic Demand - total demand for a product that is not much affected by price changes, especially in the short run.

Professional Purchasing – companies are not people they do not buy on impulse!

Reciprocity - arrangement between two participants in the producer market who are both buyer and seller to each other. For example, a company providing services to a trade journal may pay for advertising space in the journal with their services. A reciprocity opportunity may persuade a company to choose a less desirable vendor in exchange for sales made to that vendor.(allBusiness, 2009)

Leasing – a contract renting land, buildings, etc., to another; a contract or instrument conveying property to another for a specified period or for a period determinable at the will of either lessor or lessee in consideration of rent or other compensation. (OnLine dictionary, 2008)

Leasing scheme:

1. A leasing contract is signed between the Lessor and the Lessee
2. The Lessor pays the purchase price to the Supplier
3. The equipment is delivered to the Lessee
4. The Lessee pays lease rentals determined by contract to the Lessor.

Off course many types of companies are using B2B marketing methods in a way suitable for them. There are many types of these organizations:

The level of involvement depends on the item of purchase. As it was proved during the lecture not many people are needed to decide about purchase of water to the office, but situation is changing when we are talking about new scanners or computers. So, as it was mentioned a few post ago in B2B relations the level of involvement is very important. It decides about the closure of relationship between companies.

Social classes...

According to Encyclopedia Brittanica social class is a group of people within a society who possess the same socioeconomic status. Besides being important in social theory, the concept of class as a collection of individuals sharing similar economic circumstances has been widely used in censuses and in studies of social mobility. History of social classes is very long. There were two main civilizations which were divided into classes – Aztecs and ancient Romans. Social class played a major role in their lives.

Romans:

There were four main classes of person in Rome: the Aristocracy known as "Patricians", the common folk known as "Plebeians", the slaves and finally the free men who came into Rome to conduct business known as "Clients".

Aztecs:

Aztec society traditionally was divided into classes. The highest class were the pīpiltin or nobility. The second class were the mācehualtin (people), originally peasants. The other 80% of society were warriors, artisans and traders. Slaves or tlacotin also constituted an important class. Aztecs could become slaves because of debts, as a criminal punishment or as war captives. A slave could have possessions and even own other slaves.

Social class system has been changing for years. It is also very popular in modern Great Britain. The different positions represent different levels of power, influence and money. The British society were considered to be divided into three main groups of classes at the turn of the century:

• the Upper Class,
• the Middle Class, and the
• Lower or Working Class

This system is much more complicated now. Nowadays, British society is divided into 7 main categories. As it can be seen in the picture:

There are w few interesting facts related to their purchase behaviour:

• Social class is a better indicator of purchases that have a symbolic aspect but low to moderate prices e.g cosmetics, liqueurs
• Income is a better indicator of purchase behaviour for non-symbolic, high expenditure products e.g. fridge freezers
• Both social class & income data are needed to predict behaviour with expensive & symbolic products e.g. cars, homes

This division is not as strong as e.g in India where there is no chance to change social class. The Indian caste system has been in use for many years. Still today the values of the caste system are held strongly. It has kept a sense of order, and peace among the people. There are five different levels of the system: Brahman, Kshatriya, Vaishya, Shudra, and Harijans. Within each of these categories are the actual "castes" or jatis within which people are born, marry, and die.(Calaham, 2009)

World around us is changing but there are a few things which seem to impossible to change. Rich people have a need to differentiate them from others. Marketing specialists are aware that advertising has to be more luxurious. What is more adverts for each class should be suitable for them. These are few examples:

luxurious advert

middle class advert

Culture...

What is culture? It is something around us….something that makes us feel safe….something indescribable….almost impossible to define…it is…without a need to be described…

Our lecture was very interesting and useful, we had a great chance to find out more about culture in theory but also in practice. We were divided into 3 free teams, each team was obliged to gather information about three countries: Ireland, Poland and United Arab Emirates to prove the cultural differences.

The anthropologist, Clifford Geertz, defines culture as a “historically transmitted pattern of meanings embodied in symbols…by means of which men can communicate, perpetuate and develop their own knowledge about and attitudes towards life.”

Differences between people within any given nation or culture are much greater than differences between groups. Education, social standing, religion, personality, belief structure, past experience, affection shown in the home, and a myriad of other factors will affect human behavior and culture.(Encina, 2007)

A good example of cultural difference is in the way different cultures view time. In traditional (i.e. most Eastern and African) cultures, trust and friendship is more important than time. One does not hurry on to business matters – first one chats with those one will be dealing with, even if this delays the start of the meeting. In this way, one builds trust and relationships. In the West (i.e. Western Europe, the U.S., Australia and much of South America) one’s schedule is to be adhered to strictly. (taken from Paul Hiebert’s book, Cultural Anthropology). Westerners feel that Easterners are dishonest and rude when they come 20 minutes to half an hour late to an appointment. But when an Easterner says ’11:00’ he or she means ‘between 11 and 12’. In contrast Westerners divide time into strictly-measured hours, minutes and seconds, into which one carefully arranges one’s plans, appointments, and activities so as to fit exactly and not cause delays to one’s own or anyone else’s plans. Neither is ‘right’ or ‘wrong’ necessarily, but they certainly are different, and when persons with different assumptions come into contact there is great room for misunderstanding!(source: http://blue.butler.edu/~jfmcgrat/culture.htm)

It is important to recognize that people from different cultures have are different in a variety of ways, including

• different ways of looking at things
• different ways of dressing
• different ways of expressing personality/goodness

What is more there are many differences in gestures. These differences can cause problems interpreting what the other person is doing. Some simple examples:

• In the US, a firm, short handshake indicates self-confidence and (heterosexual) masculinity. A limp handshake by a man can be interpreted (usually wrongly) as a sign of homosexuality or wimpiness. But in most parts of Africa, a limp handshake is the correct way to do it. Furthermore, it is common in Africa for the handshake to last several minutes, while in the US a handshake that is even a few seconds too long is interpreted as familiarity, warmth and possibly sexual attraction.
• In Britain, men do not look at women on the streets. The French do. Recently, a French public figure mentioned in a speech that the Brits are all gay -- the evidence was their lack of overt interest in women.

These are three collages above, which show the results of our presentations about Polish, Irish and Arabic culture.

Great advice:

Breaking through status barriers can take time and effort. The amount of exertion will depend on many factors, including the skill of the manager (teacher, volunteer) on the one hand, and how alienated and disenfranchised from the main stream the person he is trying to reach feels.

There is much to be gained by observing how people of the same culture interact with each other. Don't be afraid to ask questions as most people respond very positively to inquiries about their culture. Ask a variety of people so you can get a balanced view. (Encina, 2007)

Pester power...

It is not a secret that children have a big impact on their parents. This may be related to many things such as behaviour, but the most important is marketing influence. Marketers are aware that children are a key to their parent’s money. It is called pester power: the power children have, by repeated nagging, of influencing their parents to buy advertised or fashionable items.

Quoting Beder (2009) Advertisers spend 100s of billions of dollars a year worldwide encouraging, persuading and manipulating people into a consumer lifestyle that has devastating consequences for the environment through its extravagance and wastefulness. Advertising exploits individual insecurities, creates false needs and offers counterfeit solutions. It fosters dissatisfaction that leads to consumption. Children are particularly vulnerable to this sort of manipulation.

As it is said in International Journal of Advertising: the more often children ask, the more they receive. We can analyse if it is ethical to advertise products to the youngest generation, which does not have their own money, however according to Direct Marketing magazine, by the age of eight children make most of their own buying decisions.

Kasser says "Psychologists who help advertisers are essentially helping them manipulate children to believe in the capitalistic message, when all the evidence shows that believing in that message is bad for people."

There is a very interesting TV program related to children’s attitude towards media and modern advertising. A key slogan heard in that program is “children grow older younger”. It is a sentence which seem to be fundamental in discussion about marketing toward the youngest. What is more, brand recognition is a reason why kids choose one product instead of another. Even the smallest people (in nursery) were able to recognize the most popular brands such as Pepsi, Lego or Barbie. They were not interested when they did not know brand. What is interesting, children as young as age three recognize brand logos (Fischer, 1991), with brand loyalty influence starting at age two (McNe

al, 1992).

The average young person views more than 3000 ads per day on television (TV), on the Internet, on billboards, and in magazines. Increasingly, advertisers are targeting younger and younger children in an effort to establish "brand-name preference" at as early an age as possible. This targeting occurs because advertising is a $250 billion/year industry with 900 000 brands to sell and children and adolescents are attractive consumers: teenagers spend $155 billion/year, children younger than 12 years spend another $25 billion, and both groups influence perhaps another $200 billion of their parents' spending per year.Increasingly, advertisers are seeking to find new and creative ways of targeting young consumers via the Internet, in schools, and even in bathroom stalls. (Pediatrics website, 2006)

Conclusion ? “no brand = no product = no identity = no sales”

Marketing to children should be carefully restricted. In particular advertisements aimed at children under the age of 9 years old, including on the internet and during children's television programmes, should be banned. Such advertising subsidises the cost of these services at the cost of our children's values, sense of well-being, health and integrity. Moreover the future of the planet is at stake if we allow advertisers and marketers to turn children into hyper consumers of the future.

Family life cycle...

Family seem to be one of the most important things during human’s life. We cannot function without them, because having a family satisfy our “sense of belonging” and “sense of safety” which are one of basic needs on Maslow’s Hierarchy of needs. Our families give us an identity. They provide us with a moral, social and economic support. (Landa, 2008) Basic definition says that family is:

• a group of individuals living under one roof and usually under one head
• a group of persons of common ancestry
• a people or group of peoples regarded as deriving from a common stock
• a group of people united by certain convictions or a common affiliation

Nowadays, it is very difficult to define a family in such a basic way because of cultural and sociological reasons and of course because of times when we live. Industrialization, urbanization, and the global economy, along with their communication systems, reach into a nation's families, changing where and how men and women live, how often and when they have children, and how they work. World citizenship, global cosmopolitan culture, and international conferences change gender roles. But role change is not unidirectional and may become either narrower or more diverse.

Quoting Dr Landa:

Today the idea of the family itself is changing and is sometimes being replaced by other groups whose links are based on confidence, mutual support and a sense of common destiny. Religious groups, office colleagues and homosexuals are now sometimes seen to operate as ‘family’. This new way of thinking about the family is radically different and is not based on correct biblical teaching.

These are a few examples of demographical evidences for changes in family structure:

• 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

(What is interesting: In 2002, children living with married parents (either married biological/adoptive parents or married stepparents) experience less material hardship than children living with single mothers, cohabiting parents, or cohabiting stepparents. In c

ontrast, school-age children and teens living with their own two parents (whether married or not) are less likely to exhibit behavioral problems than

children living with single mothers, married steppar

ents, and unmarried stepparents.)

Linton Hutchinson(2007) says on his blog that there are 8 basic stages of family life cycle:

1. Married Couples without children

2. Child bearing families
3. Families with pre-school children
4. Families with school children
5. Families with teenagers
6. Families launching young adults
7. Middle aged parents- empty nest to retirement
8. Aging Family members- retirement to death of both spouses

The model was developed by Wells and Grubber in 60s. It describes the stages which consumer in their lives as they have families.

Marketers should remember that family is very important as a consumer. It consists of many people in different age, different needs and different preferences. It is very difficult to target family, so why do not target each member? Result is obvious because during one shopping family buys things suitable for children adults or elderly people.

According to Burns (2009) 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.

But is also proved that children have a big influence on their parents choices. It is usually called pester power. More details can be found in next post…