Understanding Buyer Behaviour

Buyer behaviour is a very important factor to understand when it comes to marketing. A vital point of the marketing process is to understand why a consumer/buyer makes a certain purchase. By understanding buyer behaviour it will make it significantly easier for the business to meet the needs and wants of consumers. In addition to understanding the needs of your customers businesses would also need to understand what motivates them to purchase, and how you can influence the buying process to ensure that your products or services are on their shopping lists. Consumer behaviour is a large significant part of the marketing process it allows businesses to study individuals or groups and why they make purchases whether it is due to needs or desires.

Consumers are the people who will use a product or service and the consumer will only actually do this if they make a purchase. So from the organisations perspective understanding consumers and their buying behaviour is a major part of success. There are two main points regarding buyer behaviour and they are, A) The actions of consumers and B) the social and mental processes involved in the purchase. This knowledge of consumers can only be gained if the business does the correct market research. If a business’s understands buyer behaviour of consumers it helps them not only on how to develop their product but also how to market it. The knowledge obtained through the study of consumer behaviour is used by marketers in various ways that adds value to the company, customer and society as a whole. The decision making process of marketers is benefited by this knowledge.

There are many advantages to understanding buyer behaviour essentially it will give organisations the knowledge on how to sell their products and services as effectively as possible. Certain factors affect buyer behaviour such as personal factors i.e. demographics such as age gender. Situational factors such as lifestyle and experience factors such as previous buying experience also effects buying behaviour. Social factors such as culture and physiological factors such as personality type and attitudes and beliefs also come into play. Organisations that intend to sell a product or service will gain key knowledge on how to market their products or services if they understand the buying behaviour of their targeted markets and also consumers in general.

This is because it allows the organisation to alter and edit its marketing strategy and marketing material to their advantage to maximise its effectiveness. Organisations also benefit from understanding buyer behaviour in many other ways. This is because it helps them gain the knowledge on how to also improve products and services. It also helps ensure customers are satisfied and help target customers more effectively. It will also increase the organisations knowledge about the marketing field but also help the organisation gain a competitive advantage. All the factors are the main reasons why understanding buyer behaviour is extremely valuable to an organisation. The buyer behaviour theory or “black box model” is a great tool to use to understand buyer behaviour. The Black box Model for the buyer behaviour theory is below.

This model shows us the interaction within the buyer behaviour process. This model considers the buyers response as a result of a conscious and rational decision process. In this model is assumed that the buyer has recognized the problem however in real world a lot of consumer decisions are not made due to an awareness of a problem. This theory can be easily applied to buyer behaviour and understanding it however it does have a weakness as it may not be as effective in real world situations. Buyer behaviour essentially shows an organisation how a consumer buys and this is why it is essential that buyer behaviour is determined by an organisation as it gives their product or service a stronger chance of selling and to fight of competition.

Task 2

In this brief report I have chosen and organisation which is BMW the luxury German car manufacturer. With this organisation in mind I am going to be looking into this organisation marketing activities and evaluate them.

Bmw make a vast range of vehicles and try to cater for every sector in the vehicle department as a result they sell small family hatchbacks like the 1 series to flat out sports cars like the M6 V10. As a result Bmw has a different marketing approach for different products which is ideal as products have different target markets. Bmw advertise in all kinds of media be it social media or even Tv or magazine. Their strategy therefore is also very good for example for small family cars they will make family based advertisements which are concentrated on the usability and versatility of the vehicle which will attract their target market for that specific vehicle which is family’s.

Then with the Bmw M6 they will market the product in a more aggressive way and try to show the brute force and power of the vehicle. They also target specialist magazines such as car performance magazines which will likely be read by the vehicles target market of consumers. So BMW in general approach marketing in a way in which the products target market determines the marketing approach. Which is what you would expect due to the vast range of vehicle’s that they sell. Bmw is a large company and Macro and Micro environmental factors will influence their marketing decisions. Micro environmental factors such as competitors will affect Bmw marketing decisions heavily. This is due to strong competitors such as Mercedes Benz and Audi their strategy will be heavily involved in what competitors like Audi do with their marketing strategy and approach.

Micro environmental factors such as current and previous customers will also affect their marketing decisions because they are already customers and may be loyal to the BMW brand so may keep on buying new Bmw models if they are offered them first. Competitive advantage is what Bmw would be seeking for and to get this advantage they would make marketing decisions based on Macro and Micro environmental factors. They would use factors such as competitors and economic factors together to mark marketing decisions regarding a product or service. Due to BMW being a vast organisation there are loads of different types of macro and micro factors that affect their marketing decisions. BMW will have a big budget when it comes to marketing however they will most likely have to be effective as if marketing costs are high and no result is seen than this may damage future marketing material. Macro factors such as technology will also affect this sort of marketing decision due to the high cost of advertising in technological places such as television or popular websites.

This is because it can be very costly to do so. In general Macro and Micro environmental factors would easily sway and effect the marketing decisions of BMW as is the same with any other large vehicle manufacturer. Domestic marketing and International marketing are same when it comes to the fundamental principle of marketing. Marketing is an integral part of any business that refers to plans and policies adopted by any individual or organization to reach out to its potential customers. Domestic marketing are strategies that are used to attract customers within the political boundaries of a country. Domestic marketing is only marketing towards local market places. International marketing is where there are no boundaries and the organisation targets markets all over the globe. Below are some of the differences between the two kinds of marketing. Scope – The scope of domestic marketing is limited and will eventually dry up.

On the other end, international marketing has endless opportunities and scope. Benefits – As is obvious, the benefits in domestic marketing are less than in international marketing. Furthermore, there is an added incentive of foreign currency that is important from the point of view of the home country as well. Sharing of technology – Domestic marketing is limited in the use of technology whereas international marketing allows use and sharing of latest technologies. Political relations – Domestic marketing has nothing to do with political relations whereas international marketing leads to improvement in political relations between countries and also increased level of cooperation as a result. Barriers – In domestic marketing there are no barriers but in international marketing there are many barriers such as cross cultural differences, language, currency, traditions and customs.

BMW being a large company they market internationally on a vast scale however they do also market domestically in a similar way however they do offer domestic markets in Germany with better services/deals than they would internationally. This comes down to stiff local competition from other such as Audi. As Discussed before BMW have different product ranges and different products have different target markets. BMW has a vast range of target markets due to the nature and a variety of their products. In the criteria for target markets BMW must look at who would buy their products. As a result typically BMW is targeting the upper levels of the middle class and those in the upper class as well. This is who their advertising is aimed at. The company feels these are the people most likely to buy their product. So their target market is vast but it is based mostly upon economic situations of consumers.

BMW is essentially a premium brand so they are quite expensive so they must target people with the substantial income so that they can sell their product effectively. I recommend that the segmentation criteria for targeting the existing customers and new customers depends on the type of vehicle BMW intend to market. Obviously they can always target existing customers with ease by offering them exclusive first looks at new models of cars and allow them to place orders before new customers. Existing customers information on previous sales will likely be saved by BMW so they can use this information make existing customers aware of new deals and products. The material I would suggest to attract existing customers is to give me exclusive deals and first look opportunities as BMW target upper middle class to higher class and this will make them feel special.

Market segmentation of new customers depends on BMW’s vehicle for example a 2 seater sports car will be pointless marketing to large family’s thus if BMW want to attract new customers they have to alter the marketing material to accommodate for the model of car and who it would be attractive too. BMW should segment the market into multiple different target markets such as Familys, Single people, Elderly people and young people. This is because of the vast range of cars they have they will be able to cater for every market effectively. BMW is a strong car brand however over the years competition has become very hard with the like of Mercedes and Audi also updating their style of cars but also focusing on their driving experience behind the wheel. BMW are known to have astonishing handling however Audi and Mercedes are also trying to match and even beat BMW.

Due to factors such as this BMW must try to sustain a competitive advantage over competitors that is long term and not easily surpass able by competitors. Organisations can obtain a competitive advantage by implementing value-creating strategies, not simultaneously being implemented by any current competitor. These strategies need to be rare, valuable, and non-substitutable. Sustainable, competitive advantages are advantages that are not easily copied and, thus, can be maintained over a long period of time. The competition must not be able to do it right away or it is not sustainable. Developing a sustainable, competitive advantage requires customer loyalty, a great location, unique merchandise, proper distribution channels, good vendor relations, a reputation for customer service, and multiple sources of advantage. BMW distributes their products to areas all over the globe from Australia to China BMW is a large international brand and are desired all over the globe.

BMW distribution channels are very good and will help them keep a competitive advantage because they can delivery vehicle’s to places all over the globe with ease and speed. They also know how to distribute their products in the right places in the right amount for example their target market is upper middle class and in China currently a vast growth of Upper middle class of people have rapidly occurred in the last few years as a result BMW has built a factory in china to cut out delivery times compared to if they were distribute from Germany. So in this sense BMW are very good at sustaining competitive advantage. BMW has always been a luxury brand so they are always going to cost more than cars such as Fords however Fords have kept their prices the same but increased their quality to a somewhat of BMW standard.

So BMW has to be careful with their pricing as if they drop the price to much they may lose the image their product represents. The way BMW have dealt with the pricing issue to keep a competitive advantage is to offer low Lease hire plans. So instead of buying a car for £27,000 customers can lease a BMW for £199 pounds a month. This ensures their pricing of the vehicle is higher than lower class brands but people can afford them on lease. BMW pricing in general is very competitive with other German luxury vehicle brands but they will always keep their price high to ensure they are perceived as an expensive make of car. Their promotional campaigns are very effective they essentially flood all sources of media to get there product and name out there. There promotional campaigns are very large as you would expect with an organisation of their size.

The Vehicle/car industry has a lot of competitors but to sustain a competitive advantage BMW must get their name out their constantly which I believe they do because you will see BMW promotional campaigns all year round in many different forms and locations. Their promotional campaigns are also very affective for example when a new vehicle is launched then the vehicle will be seen by consumers almost everywhere thus allowing them to get into consumers’ minds. There’s nothing really special about their promotional campaigns because they tend to let their products speak for themselves. BMW has to also have great customer service because of the vast amount of competition the customer service will come into play when it comes to sales. BMW are very courteous to customers that visit their showrooms as with all car showrooms this is because this is the actual step towards buying a vehicle. BMW has had a reputation in the past of billing customers in past high sums for servicing.

The competitors in the market have introduced fixed servicing prices so for BMW to stay competitive they have also introduced this into their customer service ensuring that they are on par with competitors if not better in the customer service area. BMW is very good in regards to physical environment when it comes to developing sustained competitive advantage. This is because BMW always redesign and model showrooms so that they look sheek and modern so it matches the image of their vehicles. The showrooms of BMW is where the vehicles are sold and this is there to somewhat “wow” the customers and BMW do this very affectively also in showroom they have excellent customer service offering consumers/ potential buyers free drink and snacks etc. Overall BMW in all aspects are very good in sustaining competitive advantage and this is proven by the success of the business even over the last 40 years or so.

The marketing mix is a great tool when it comes to marketing this is because it includes all the fundamentals of marketing. It will help organisation make the market process a lot more effective with a lot more ease. The marketing mix consists of four main factors which are Product, Price , Place and Promotion. This is very helpful when used in different target markets as it helps determine the marketing strategy. The vehicle buyer is anyone who buys a vehicle as a result the market is massive and there are many different target markets. Im going to use two products of BMW the Bmw x1 and the BMW M6 and apply the marketing mix to them. The first market segmentation for BMW is small family’s so how would they be attracted to BMW. Let’s use the 4p’s So the product is going to be a medium sized family car with a big boot. the BMW X1 is a small/medium sized 5 seat crossover essentially a small 4×4 and is very economical. So that is the product.

The Place is where you market it places such as shopping centres or family venues is where you could market the car because a lot of family’s go out together. The promotion is simple family’s usually are looking to save money and want something simple so offer them a simple and complete package with the car such as free insurance for a year or free servicing and you can even highlight to them the economic factors of the car and how much they would save on ownership. The Price well that simple offer a fairly competitive price as family’s tend to want to save money. The next market segmentation is single business men and women aged 20-40. The Product would be something cool and modern and that stands out. The Product would be the BMW M6 Sports car because it is sporty stylish and practical enough for the single person. The Place to market on the web TV and other popular locations as young businessmen and women are always using the web.

The Promotion would be offer them a free test drive and let them experience the quality of the product first hand. The Price would be high as they could afford it but also want a tad of exclusivity. This shows how effective the marketing mix is when it comes to marketing and catering for a target market. When marketing to a business it is different to marketing to a consumers this is because a person buying a product for themselves verses buying for their company is a very different, emotional experience. In fact, there are profound differences that you must remember when developing your marketing activities. B2B depends on relationship building marketing efforts. Using consumer-focused strategies to market your B2B business will, at best, just cost you money. And, in some cases, it may cost you customers. There are many differences between B2B and B2C this is because consumers by the products for themselves and business by products for the business. There are the differences below

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

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

The business buyer is sophisticated, understands your product or service better than you do, and wants or needs to buy products or services to help their company stay profitable, competitive, and successful. Marketing copy must talk to a sophisticated audience. Your typical reader has a high interest in – and understanding of – your product (or at least of the problem it solves). Therefore, writing marketing copy is more complex and requires research to ensure you deliver the necessary information to the buyer. The B2C buyer is usually looking for the best price and will research the competition prior to shopping. Another factor that does come into play, however, is whether the buyer trusts the retail outlet, either the store front or on the Internet. Although you can find the products on the Internet at many different price points, many consumers will still buy from a trusted source. In that respect, B2C marketing needs to convince the person to buy and build trust and loyalty with their customers.

Both buyers are interested in quality customer service. B2B customer service comes into play prior to ever making that first sale and begins with a customer’s very first contact with your company, whether you call them or they call you. B2C customer service helps build customer loyalty where customers will be willing to pay a slightly higher price to know that they can return the product easily and can trust the source they are dealing with. In other words, customer service is critical and although may not be considered “marketing”, bad customer service can render all of your marketing efforts useless. The approach as you can see is very different when it comes to B2B as they essentially buy for a different reason compared to B2C Re-positioning products in the market will help sell a product to a wider range of consumers. Let’s use BMW and the X1 in this example it’s a product market at older people but mainly small/medium sized family’s. A visual representation of the car is below.

As you can see the BMW X1 is very conservative and appeals to a specific target market due to the way it looks and is designed with small low powered and economical engines. Someone a bit younger will likely not buy this car as it is not “ cool enough” and its slow to a certain extent. To re position this product so that it will sell with younger buyers and less family orientated buyers would be to give it a new look and a bit more engine power. I would suggest a subtle bodykit and bigger alloywheels but also a more powerful engine. Going back to an M6 you can add similar touches that the M6 has to an X1. See the M6 below

As you can see the M6 has a lot more aggressive styling and this same stilling applied to a special edition X1 such as let’s say an X1 M sport will allow it to penetrate into a different market. Below is a x1 which has been modified as there is no existence of an X1 m.

As you can see the new styling has made it a lot more attractive to the younger generation of car buyers this will ensure that the product is repositioned into another market. The product now suits the demands and desires of the target market it wants to break into. BMW could also tweak the engines of the X1 for sportier and faster feel as this would be more appealing to a younger target market. To summaries and conclude marketing is a vast topic and there are many different ways that BMW can target different markets to ensure their product sells and penetrates the market. Buyer behaviour is the main way a business can understand their target markets and the way consumers buy as result it is vital knowledge when it comes to marketing. Without this information than business will not know where to start or how to market effectively so that the product sells as much as it can.

1 . Solomon M, Bamossy G, Askegaard S. and Hogg, M. K. Consumer Behaviour.Pearson Education. 2006. 2. Solomon M, Bamossy G, Askegaard S. and Hogg, M. K. Consumer Behaviour.Pearson Education. 2006.Fgure1.1,Some issues that arise during stages in the consumption process,p7

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