MARKET
A market is made up of all potential customers who share a specific need or desire and who may be willing to have the ability to make an exchange to satisfy that need or desire.
Market classes:
Consumer goods markets
In consumer goods markets, transactions are made between the manufacturer or distributor and the end consumers. The goods that are exchanged can be of convenience, purchase goods or special goods. The former are of little value. Scarcely diversified and the consumer is not demanding his choice. For example, bread, sugar, etc.
Purchase goods are sought for their quality, design, novelty, etc. For example, signature clothing.
Special goods are those that require a special purchase process.
Consumer goods markets have a number of common characteristics (Ortega, 1986):
- - the range of products is high - the greater the market attendance and the older the product the greater the existing variety. - The sale is high and frequent. - Manufacturers or sellers incur significant expenses in promotional activities due to to the effect they have on sales.
Immediate consumer goods markets
Immediate consumer goods markets have their own distinctive characteristics. They are as follows:
- - consumer buying motives are needs or drive when it comes to convenience goods. The purchase of a loaf of bread in a supermarket or of a chocolate in a street stall responds, respectively, to these purchase reasons. When it comes to purchasing goods, the motivation of consumers is more complex, and may have to do with the status symbol, imitation or recommendation by other people. - When we refer to convenience goods, their consumption is a random variable. It depends on many factors that are unique to each consumer. Furthermore, these factors are random variables independent of each other - Distribution channels are usually long. It is normal for there to be a manufacturer or producer, one or more wholesalers, until they reach retailers.The existence of a long distribution channel has a very adverse effect on price. if each intermediary applied a margin of 15 or 20% that naturally accumulates, the price would double from the manufacturer to the consumer in a channel that has the characteristics just indicated. - The price of the goods of its substitutes are variable very important when it comes to convenience goods. Given that the market is oligopoly or of great concurrence and the goods are quite homogeneous, consumers pay attention to the price when making their purchases. The consumer does not notice differences. As long as the products have a minimum of quality, the consumer is totally rational. He will lean towards the cheapest ones. - Purchases are paid in cash,Understanding as such the delivery of money or payment by card with a charge to a current account, savings book or credit account in a short time.
Durable consumer goods markets
Its most relevant characteristics are the following:
- - the reasons for buying are more rational and less impulsive. The decisions are more planned than in the immediate consumer goods markets. - The commercial margins are greater than in the case of convenience goods, the reasons that explain them have to do with the risk of expiration, financial costs and less turnover. of the products. There are also other reasons that allow higher margins to be applied, such as the premium that the consumer is willing to pay for exclusivity. Durable consumer goods are subject to physical depreciation and depreciation due to obsolescence. During storage or transport they are susceptible to deterioration. The appearance of new more advanced products reduces the economic life of the existing ones and, consequently,their exchange value has to drop if they want to compete with new ones. Purchasing goods can also be affected by expiration if they are subject to fashion. Clothing is a very illustrative case. The new designs, whose life is limited to one season, withstand a very high degree of expiration. If they are not sold within a certain period of time, they must be settled in.– The distribution channel is short, unlike what happens with convenience goods.– The purchase can be financed. Durable consumer goods are often priced high. Sellers facilitate consumers by splitting and deferring payments charging interest. - After-sales service is an important aspect that affects sales.Consumers who purchase durable consumer goods take into account various attributes of such goods. Among them, the guarantees and the after-sales service. While price, design, and functional features are generally important. The existence of an after-sales service and its quality are often decisive factors that determine the preferences of the buyers.
Industrial goods market
They produce goods whose destination is the manufacture of other capital or consumer goods. The characteristics of industrial markets are very different from those of consumer markets.
In summary:
Business initiatives towards marketing with a social sense
A marketing system must perceive, serve and satisfy the needs of the consumer, while improving their quality of life.
Concerns related to the marketing system have led "citizen action movements" to act in favor of the consumer and the environment.
The consumer advocacy movement is a social movement organized to strengthen consumer rights as well as power in relation to sellers.
The pro-environmental movement, in turn, is an organized social movement that tries to minimize the damage that marketing practices cause to the environment and quality of life.
Citizen action has led to the passing of many laws for consumer protection in the areas of product safety, truth and packaging, credit loans, and advertising.
Many companies were originally opposed to social laws and movements, but most of them now recognize the need for positive information, education and consumer protection. Some have followed the "enlightened marketing" policy which holds that a company's marketing must support best long-term performance, and is in turn based on the following principles:
- - Consumer-oriented marketing: argues that a company must consider and organize its marketing activities from the consumer's point of view. - Innovative Marketing: Requires that the company tries to achieve real improvements in its product and marketing. - Value marketing: A company should devote most of its resources to value-producing marketing investments. Enlightened marketing requires creating long-term consumer loyalty by continually improving the value that consumers derive from a company's marketing offering. - Social Marketing: Means that a company must make marketing decisions with consumers' wishes in mind., as well as its long-term interests and those of society.A society-oriented marketer wants to design products that are not only enjoyable, but also beneficial. Products can be classified according to the degree of immediate satisfaction of how long-term benefits.
"Pleasant products" provide a high degree of immediate satisfaction and can be harmful to the consumer in the long term.
Healthy products have little appeal, but benefit consumers in the long run.
Finally, poor products have neither immediate appeal nor long-term benefits.
MARKETING ETHICS
Each company and marketing manager must develop a philosophy of ethical and socially responsible behavior. Under the concept of social marketing, each manager must consider beyond what is merely legal and permissible, and develop standards based on personal, personal integrity, corporate awareness and the long-term well-being of the consumer. A clear and responsible philosophy will help you deal with many issues raised by marketing like other human activities. Many industry and professional associations have come up with codes of ethics, and many companies are now adopting their own codes and developing programs to teach managers the importance of ethical problems, and help them find their own answers.
Business market
The business market is made up of business users, organizations that buy goods and services for one of the following purposes:
- - To produce goods - To resell to other business users or to final consumers - To carry out the activities of the organization.
In the business market we find the product for the consumer and products for organizations. Marketing for the business market, then, the marketing of goods and services among business users in contrast to end consumers.
The common consumer does not know about the existence of this market and, therefore, tends to underestimate its importance. It is actually huge in terms of total sales volume and the number of organizations that comprise it. It is sold to companies that then undergo further processing.
For example, Company Marketing transactions and total sales volume required for leather work shoes to finally reach users. First, the cattle are sold through one or two intermediaries before it reaches the shoe manufacturer. The hides are then sold to a tanner, who in turn sells the leather to the shoe manufacturer. This will sell the shoes to a wholesaler, who in turn sells to the shoe stores and to the factories that give the work shoes to their employees. Each sale constitutes a business marketing transaction.
In addition, the shoe manufacturer will purchase eyelets, ribbons, thread, glue, steel toe caps, heels, soles and shoe wax. Other industrial companies must first buy the cotton and then spin it, weave it, dye it, and cut it until it becomes a shoelace. All manufacturers involved in the process have plants and offices with furniture, machinery, ovens, lighting, maintenance equipment and the necessary supplies to keep them running; These are also industrial goods that are a process of producing and selling. In a word, thousands of industrial products and business marketing activities come into play before a product, destined for the final consumer or for companies, reaches its final destination.
Every company that intervenes in a stage of the production process will surely turn to external accounting and legal advisory firms. Some may hire advertising agencies. And all will undoubtedly use the services of various financial institutions.
Components of the business market
Traditionally, this market was designated with the name of industrial markets. This led many to believe that the designation referred exclusively to manufacturing companies. But as can be deduced from what we have just explained, the business market is more than that. It is true that manufacturers represent a considerable part of the market, but there are six other components: agriculture, resellers, government agencies, service companies, non-profit organizations and international companies. All of them play an important role in the business market, despite the fact that they have often been underestimated or not taken into account because the focus was on manufacturing companies.
1. Agricultural market
The high level of income obtained from the sale of agricultural products gives the group of American farmers a purchasing power that makes it a very attractive market. Furthermore, forecasts regarding world population and food shortages in many nations will surely continue to maintain strong pressure on them to increase production. The companies that hope to sell to this market must rigorously analyze it and know the most important trends well. For example, both the proportion of farmers in the total population and the number of farms have been decreasing and may continue to decrease. This trend is offset by the growth of large corporate farms. Even the remaining "family farms" have begun to expand in order to survive.Agriculture has become more automated and mechanized every day. This means that capital investment has also increased. The agricultural market (agriculture. Food processing and other businesses related to large-scale agriculture) is big business in every sense of the word.
Agriculture has become a modern industry. Like other executives, farmers are looking for better ways to increase their productivity, reduce expenses, and manage their cash flow. Technology is an important part of that process. Thus Tri-R Innovations, an Illinois-based company, has developed a remote control sensor and management system that steers a tractor through the furrows of a field to prevent it from destroying crops. And, as the furrows of a field decrease to prevent it from destroying crops. And, as farmers shrink and get bigger, well-designed strategies are needed to sell them.
2. Reseller market
Its main activity, unlike the other segments of the business market, is to buy products from suppliers and sell them in essentially the same way to its customers. From an economic point of view, resellers create profits from time, place, and possession rather than form.
Resellers also purchase many goods and services to operate their business, office supplies and equipment, warehouses, material handling equipment, legal services, electrical services, and maintenance supplies. In this purchasing activity, resellers do not differ substantially from manufacturers, financial institutions and any other segment of the business market.
In his role as buyers for resale, what characterizes him and especially attracts the attention of his suppliers. If we want to resell a good, we must satisfy the customer. It is often more difficult to determine what an external customer likes than what someone in the organization likes.
Buying to resell, especially in a large company, is sometimes a complicated procedure. In the case of a supermarket chain, the purchase is frequently made by a committee made up of experts in demand, supply and prices. The North American department store hires resident buyers (independent agency) located in New York or other major centers to keep in constant contact with the latest fashion news. Careful control of merchandise is essential for a profitable operation.
3. Government market
Government procurement processes are different from those applied in the private sector of the business market. A special feature of this type of acquisition is the competitive bidding system. By law, a large part of government acquisitions must be carried out in this way. In other words, the agency announces tenders using a standard format called the request for proposals, where the purchase specifications are indicated. You are then required to accept the lowest offer to qualify. In other cases, the government negotiates a purchase contract with an individual supplier.
4. Market services
At the present time, the number of service providers is far greater than that of goods producing. In other words, there are service companies that far exceed those that produce goods. In other words, there are more service companies than the total of manufacturers, mining companies, construction companies and companies dedicated to agriculture, forestry and fish farming. The service market includes carriers, utilities, and many financial, insurance, legal, and real estate companies. This market also includes the organization that produces and sells diverse services as diverse as rental housing, recreational activities, entertainment, repairs, medical care, personal care and business services.
These companies constitute an immense market that acquires goods or other services.
5. The non-profit business market.
It includes institutions as diverse as churches, universities, museums, hospitals, and other healthcare institutions, political parties, unions, and charities. Actually, they are all business organizations. However, in the past our society and along with it the institutions) did not consider a museum or a hospital to be a company. And even today it is uncomfortable for many to conceive of their church, school or political party as a company. However, these organizations practically do the same as the companies: they offer a product, obtain money, make investments, hire employees and, therefore, require a professional management. Non-profit companies also carry out Marketing campaigns, although they are not called that,in order to raise millions of dollars in donations. On the other hand, they invest a lot of money in the purchase of goods or services to finance their activities.
6. The international market.
The most important recent growth in the international market has been in medical products, scientific instruments, environmental protection systems and consumer goods. More than 30% of exports from the United States correspond to 50 large companies, although many smaller ones also export a lot of their products and a large quantity. Among the factors that have favored a greater participation of the latter companies are the following: the improvement of communications through the use of fax and 800 free telephone numbers, the reduction of language barriers as more English is used in transactions internationals and the help of the US comerce deparment sponsoring trade fairs and standardization programs.Companies identify niches where they have a quality and performance advantage and have thus discovered markets for products such as home aquariums, food mixers, wheelchairs and car wax.
Another aspect of the international market is made up of companies that manufacture abroad through their subsidiaries. Although these sales do not fall within the export category, they represent a considerable part of the operations of many of them.
- • It allows them to enter countries with trade agreements that make it more difficult to export them • It allows companies to better understand local markets and consumers • International operations increase the volume of exports almost 25% of the exports of US companies are sales made to subsidiaries located outside the country.
Characteristics of business market demand.
Four characteristics of demand distinguish the business and consumer markets: in the first, demand is derived, tends to be inelastic, fluctuates greatly, and the market is well informed.
1. Demand is derived.
The demand for a product for companies derives from that of the consumer products in which it is used. Thus, the demand for steel depends in part on the demand for cars and refrigerators by users, but it also depends on the demand for butter, baseball gloves and compact disc players. This is because the tools, machines and other equipment necessary to manufacture it are made to do. Consequently, as demand for baseball gloves increases, the company that makes them will have to buy more steel sewing machines and filing cabinets.
The fact that demand in the business market is derived has two very important consequences for marketing: first, to estimate the demand for a product, the company must be familiar with how it is used. This is easy enough manufacturers of engines for propulsion aircraft, but there are others that are more complex and need further investigation.
Second, the manufacturer of a business product can carry out marketing activities that stimulate sales.
2. demand is inelastic.
Another characteristic of the business market is the inelastic demand for this type of product. Elasticity of demand is the sensitivity of demand between the change in the price of a commodity.
The demand for many industrial products is inelastic relativity, which means that the demand for a product depends little on changes in its price.
The demand for industrial products is inelastic, because normally the cost of a part or material constitutes a small part of the total cost of the finished product.
The cost of the chemical in the paint is a small part of the price the consumer pays for it.
From a marketing point of view, there are three factors capable of regulating the inelasticity of demand for industrial products:
- • Price changes need to occur across the industry, not just one company. A general reduction in the price of steel bands on tires will have a small effect on the price of the tire; therefore, its effect on the demand for this type of tires will also be small. Consequently, it will have a slight impact on the total demand of the band. However, if a supplier lowers the price of steel belts considerably, doing so will take away many customers from their competitors. Thus, in a short time the demand curve of a company can be very elastic. But the advantage will probably be temporary, because competitors will certainly fight back in some way to regain lost customers. • The second marketing factor capable of modifying inelasticity of demand is time.It is largely done in the short term. In the long run, the demand for an industrial product is more elastic. Without increasing the price of the fabric of dresses for women. Perhaps there will be no immediate change in the price of the finished dress. However, the increase in the cost of materials could very well be reflected in the increase in the price of dresses in the following year. For a year or more from this year, this increase in turn will influence the dress band and, therefore, the fabric band. • The third factor is the relative importance that an industrial product has in the cost of the finished good.. We can generalize thus: the higher the cost of an industrial product as a percentage of the total price of the finished good, the greater the elasticity of its demand.the demand for an industrial product is more elastic. Without increasing the price of the fabric of dresses for women. Perhaps there will be no immediate change in the price of the finished dress. However, the increase in the cost of materials could very well be reflected in the increase in the price of dresses in the following year. For a year or more from this year, this increase in turn will influence the dress band and, therefore, the fabric band. • The third factor is the relative importance that an industrial product has in the cost of the finished good.. We can generalize thus: the higher the cost of an industrial product as a percentage of the total price of the finished good, the greater the elasticity of its demand.the demand for an industrial product is more elastic. Without increasing the price of the fabric of dresses for women. Perhaps there will be no immediate change in the price of the finished dress. However, the increase in the cost of materials could very well be reflected in the increase in the price of dresses in the following year. For a year or more from this year, this increase in turn will influence the dress band and, therefore, the fabric band. • The third factor is the relative importance that an industrial product has in the cost of the finished good.. We can generalize thus: the higher the cost of an industrial product as a percentage of the total price of the finished good, the greater the elasticity of its demand.Perhaps there will be no immediate change in the price of the finished dress. However, the increase in the cost of materials could very well be reflected in the increase in the price of dresses in the following year. For a year or more from this year, this increase in turn will influence the dress band and, therefore, the fabric band. • The third factor is the relative importance that an industrial product has in the cost of the finished good.. We can generalize thus: the higher the cost of an industrial product as a percentage of the total price of the finished good, the greater the elasticity of its demand.Perhaps there will be no immediate change in the price of the finished dress. However, the increase in the cost of materials could very well be reflected in the increase in the price of dresses in the following year. For a year or more from this year, this increase in turn will influence the dress band and, therefore, the fabric band. • The third factor is the relative importance that an industrial product has in the cost of the finished good.. We can generalize thus: the higher the cost of an industrial product as a percentage of the total price of the finished good, the greater the elasticity of its demand.For a year or more from this year, this increase in turn will influence the dress band and, therefore, the fabric band. • The third factor is the relative importance that an industrial product has in the cost of the finished good.. We can generalize thus: the higher the cost of an industrial product as a percentage of the total price of the finished good, the greater the elasticity of its demand.For a year or more from this year, this increase in turn will influence the dress band and, therefore, the fabric band. • The third factor is the relative importance that an industrial product has in the cost of the finished good.. We can generalize thus: the higher the cost of an industrial product as a percentage of the total price of the finished good, the greater the elasticity of its demand.
3. Demand fluctuates greatly
Although the demand for industrial goods does not change in response to price changes, it does so in the face of other factors. In fact, the demand for almost all kinds of industrial goods fluctuates much more than that of consumer products. The demand for facilities (large plants, equipment, factories, etc.) is very subject to change. Fluctuations are also observed in the accessory equipment market: office furniture and machinery, delivery trucks and similar products. All of them tend to accentuate the fluctuations in the demand for raw materials and manufacturing parts. We see this very clearly when declines in demand in the construction and automotive industries affect suppliers of wood, steel, and other materials and parts.
One of the main causes of the fluctuation is that individual companies are concerned about having a shortage of stocks when demand increases or being left with excess inventory when it decreases. This is why it tends to overreact to signals from the economy: They accumulate inventories when they see signs of growth in the economy and reduce them if they see signs indicating an enchantment. When the stocks of all firms are combined, the effect this has on suppliers is extremely fluctuating demand. This is called the acceleration principle. An exception to this generalization is found in agricultural products destined to be processed. Since people cannot do without food, there is a fairly constant demand for animals that produce edible meat,fruits and vegetables that canned or will be sold frozen, grain and dairy products with which cereals and bread are made.
4. Buyers are well informed
Industrial customers are usually as well informed about what they buy as final consumers. They learn more about the merits of other supply sources and competing products for three reasons. First, there are relatively few options to consider. Almost always, the consuming public has many more brands and stores to choose from than they do. First, there are relatively few options to consider. The consuming public almost always has many more brands and stores to choose from than they do. Second, the responsibility of this type of buyer is usually limited to a few products. Unlike the consumer who purchases many different things, his task is to know perfectly a rigorously defined set of products. Third.In most purchases, an error is no more than an insignificant problem. On the other hand, in the industrial purchase a mistake can cost thousands of dollars and even the decision maker can lose his job.
This need for information has an important consequence in Marketing. Sellers of industrial products attach greater importance to personal selling than companies that market consumer products. Those who sell to companies must be selected with great care, they must receive adequate training and good remuneration. Your obligation is to make effective sales presentations and provide satisfactory service both before and after the sale. Sales executives are now putting more effort into assigning salespeople to top customers to ensure they are compatible with them.
Determinants of business market demand
If you want to analyze a consumer market, the marketing expert will have to study the distribution of the population and various demographic aspects including income, and then try to find out their reasons and buying habits. Essentially the same type of analysis can use a company that sells its products on the corporate market. The factors that influence the market for industrial products are the number of user possibilities and their purchasing power, the reasons and the purchasing habits. In the following presentation we will discuss the fundamental differences between consumer and business markets.
Number of types of industrial users
Number of buyers: The company market contains relatively few purchasing units compared to the consumer market. For most companies, the market for companies seems even smaller because they sell their products to a small segment. Marketing executives need to carefully identify their market by type of industries and geographic location. A company that sells hard rock mining equipment is not interested in the total market for companies, not even the 30,000 that engage in all kinds of mining and excavation.
Industrial user sizes: Although the business market is small in terms of the total number of buyers, it has great purchasing power. A relatively small percentage of companies represent the maximum share of value added to products by manufacturing. The added value is the monetary value of the production of a company minus the value of the inputs that it acquires from other companies.
The importance of the above facts in marketing is that the purchasing power of many company markets is highly concentrated in a few companies, that is, a high percentage of industrial sales corresponds to a very small number of companies.
Therefore sellers have the opportunity to deal directly with these large users. Intermediaries are not as important as in the consumer market.
Regional concentration of industrial users
A strong regional concentration is observed in many large industrialists and also among industrial users in general. A company that sells products using copper mining will have the bulk of its US market in UTA and Arizona. Hat manufacturers are located primarily in New England, and a large percentage of footwear made in that country comes from New England. The eight states that make up the census regions formed by the measured Atlantic region and the Northeast region represent almost 50% of the total value added by manufacturing. Ten standard metropolitan areas alone generate nearly 25% of the total value added by manufacturing in the United States.
Horizontal and vertical market of the company.
A company must know if the market for its products is vertical or horizontal. If your product can be used by practically all companies in one or two industries only, we will say that you have a vertical market for companies. If the product is usable in many industries, it is said to have a broad or horizontal business market.
The marketing program of an organization is usually influenced by the fact that its markets are vertical or horizontal. In a vertical market, you can craft a product to certain specifications to meet the particular needs of an industry. However, it must be large enough to support specialization. Also, advertising and selling people can more effectively target vertical markets. In a horizontal market. The product is developed as an object for any use in order to reach a larger market. But you will surely face stronger competition as the potential market is broader.
Business buying behavior
The purchasing behavior of companies, like that of consumers, begins when a need is known (a reason). This gives rise to a goal-oriented activity, the purpose of which is to satisfy the need. Once again, marketers will seek to find out what motivates the buyer, and then understand the buying process and habits of business organizations in their markets.
The functional activities of a company for it to go well must be the following:
- - That the company adequately make a series of reviews of the product offered in the market. They are the activities that the company needs to materialize in a product or service. It includes the preparatory activities to prepare the product such as the commercial technical analysis, regulations and the improvement of exclusively belonging to executive operations clearly aimed at preparing and bringing the product closer to the consumer. Production, marketing and distribution. The importance of each of these relationships with those of more depends on the characteristics of the company and the characteristics of the company and the product that is produced in that company.
A company to maintain its sales must be updated, in the sense that it is updating its products and its presentations so that consumers are on the lookout and do not forget that they are there in the market.
And so it maintains a permanence in the offeror, of course that to accept all these reforms it has to do a series of procedures such as:
Technical, commercial and regulatory analysis and improvement, you must also take into account the budget there for that analysis. You have to have less costs and more favorable profits for the company.
One of the aspects that stand out in the commercial technical analysis is the examination that is done to accept or not the idea.
Within the criteria that allows establishing the technical feasibility of the idea, four aspects stand out that are very interesting.
- the new production technology that the product may require, the use of the existing production equipment in the company, the availability and safety of the raw material in the degree of new components, we owe technical knowledge that must exist in the transformation of new products.
It is worth noting that manufacturing a product in a newly created company is not the same as manufacturing an existing one.
Technological advances are very much found in a company since with this the productive quantity of a company can be measured and its production will do much better than one that has obsolete machinery.
The raw material also plays a very important role in the production of a company, because the quality of the product depends on the quality of the raw material and it will be reflected in its sales.
One of the concepts that is handled a lot in a company are those of convergence and divergence
- • convergence: it is when a company can manufacture with the equipment and productive resources • divergence: it is when it requires a substantial change in them, for example, the increase in the range of a product that contributes to the offers of a company (model variety)
In a company, the most important thing is to stay on the market. To do so, it must be established whether or not there is a new product that it plans to launch on the market or, in case of modification, whether the current market increases or not. A very important point that a company must have is that if the product that it is going to launch is going to satisfy instantaneous needs for the consumer, it will surely be welcomed in the market.
But if in a modification you have to try that the change is good for the user's utility and satisfies needs.
In activities of a preparatory nature, to finish, perfectionism must be taken into account.
That in the last preparatory function of a company it tries to verify quality, verify design and eliminate defects or increase components in such a way that the product enters the production phase with the greatest possible technical and commercial guarantees. All these manufacturing procedures must be studied calmly and avoid improvising, because that is the reason for the failure of many companies.
In the company it is necessary to take into account the executive operations that are the result of the thought that carries out the ideas analyzed, normalized and perfected in the next stage, it is aimed at producing in the best possible condition so that it is acquired by consumers.
In the executive operations, the planning and control of production stand out in meeting objectives, a set of actions that ultimately coordinate all the work to be done, it is the heart of a company that produces the product.
Broadly speaking, there are three actions that are carried out. Firstly, planning and control have determined how work is carried out, taking into account the factors of production that are required and their availability in the appropriate market. This task leads to information about the operations that must be carried out and the material that must be used (list of parts, drawings, instructions, etc.), secondly the time in which the production must be carried out, leaving specific dates initiation or termination in each of the operations into which the production process can be divided in order to establish the exact moment of availability of finished products.
And thirdly, the planning and control of production to be set in compliance with the programs established and corrected in this, is an important action that allows at all times to keep the production process in correct operation and to fulfill the acquired supply commitments. Hence something very important that a company can and should have is the punctuality of production delivery.
The commercial classification of a product can be classified into two immediate products, which understand its nature, natural goods and service.
Naturals are tangible things determined and individualized whose individual characteristic for marketing resides precisely, your corporation, a natural good can be weighed, stored and measured in its points of view of the product with respect to the consumer, and consequently constitutes achieving objectives on the arguments of sale and manifests the preference.
Perishable consumer goods disappear at the same time of their use and used goods are durable because they allow their application to satisfy the needs in a repeated way and over a longer or shorter period of time.
In a reality it can be said that consumer and fixed assets are used to satisfy needs, for example food is consumer goods and household appliances, automobiles are fixed assets.
It is also necessary to take into account the demand among the products that enjoy great importance in the theory of consumption. There are goods that jointly satisfy the same need such is the example of the demand for coffee, when it rises there are many products that are substitutes for it, such as the example of tea, chocolate, etc., which has a much lower demand and meets the same condition. These variations are the ones that inspire a more important transformation in the law of demand that lowers the quantity of demand for a good exclusively from its price, that is why it is important to complement and substitute products in the action of marketing. in its effects on the need that the consumer seeks to satisfy.
There is a classification of the first grouping of products made from a marketing perspective, as the two frequently purchased products are those that the consumer usually purchases, are the products that come into the way, such as: food, personal hygiene items, periodically, they are acquired with physical or mental effort.
They are also in the products of comparative purchase as the same name says it is about buying the quality, price, design, etc… as is the example of clothing, furniture, household appliances and many other products that the consumer comparatively examines before to make the decision to buy them. And there are the purchase products especially that are what the consumer wants to buy even if it implies a high cost in time, money or reflection. It is about what is covered by a prestigious brand such as the example of BMW cars, prestigious perfumery, these are clear examples of a special purchase product, this being the classification of a good as normal, inferior, basic necessity or luxury,I think it is useful only as a reference source to plan the marketing actions that focus on each of these products, which obviously has its importance in everything if it is considered that any commercial planning must take into account the same purchasing power. of the consumer to whom the actions to be developed will be directed, whatever the promoted product. The key idea of this notion is therefore that the consumer buys something more than what the product is from a manufacturing point of view. The company's offer is composed from the point of view of product marketing, which is manufactured in all the characteristics that are incorporated into it, aimed at meeting the consumer's demand. This feature can also be shape, weight, color, etc …… and intangible, the brand, warranty, service,etc… and sources form a variety of attributes that the subject values fundamentally in three dimensions:
- its use value, represented by the amount of effort that the consumer attributes to it, its exchange value represented by the amount of forces (usually money), the institutional one, represented in the significance attributed to it in the general picture of consumption.
All products have a use value, an exchange value, and an institutional value and these three are subject to change and I believe that the company that does not adopt the product to its values with goods will be manufacturing a foreign body that the market will reject with products. competitive that respond effectively to the change in value.
Size of industrial users: Although the business market is small in terms of the total number of buyers, they have great purchasing power. In a relatively small percentage of companies, it represents the maximum share of value added to products by manufacturing. The added value is the monetary value of the production of a company minus the value of the inputs that it acquires from other companies.
The importance of the above facts in Marketing is that the purchasing power of many company marketing is highly concentrated in a few companies. In other words, a high percentage of industrial sales correspond to a very small number of companies.
Regional concentration of industrial users: a source of regional concentration is observed in many large industries and also among industrial users in general. A company that sells products used in copper mining will have the bulk of its US market in UTA and Arizona. Hat manufacturers are located mainly in New England, a large percentage of footwear made in that country comes from New England Saint Louis and the South East.
Vertical and horizontal market of companies: it is required to use good marketing planning, a company must know if the market for its products is vertical or horizontal. If your product can be used by virtually all companies in one or two industries only. We will say that they have a vertical company market. For example, some precision instruments are exclusively for the maritime market, but every boat or boat builder is a potential customer. If the product is usable in many industries, it is said to have a broad or horizontal business market. Industrial supplies, such as lubricating oils and grease from pennzoil, General Electric's small electric motors, and paper and Weyerhauser products, can be sold to a wide range of industries.
An organization's marketing program typically influences whether its markets are vertical or horizontal. In a vertical market, you can craft a product to certain specifications to meet the particular needs of an industry. However, this must be large enough to support specialization, and advertising and personal selling can be effectively targeted in vertical markets. In a horizontal market, the product is developed as an object for any use in order to reach a larger market. But you will surely face stronger competition as the potential market is broader.
Purchasing power of industrial users: another determining factor of the market demand of companies is the purchasing power of this type of clients. We can measure it by expenses or by its sales volume. But this type of information is not always available or it is very difficult to estimate. In such cases it is estimated indirectly, using an indicator of purchasing power activity, that is, a market factor related to sales and expenses. Sometimes the market indicator is a combined measure of purchasing power and the number of industrial users. United States government agencies, and at both the municipal and federal levels, collect many useful statistics.
Business buying behavior
The purchasing behavior of companies, like that of consumers, begins when a need is recognized (a reason). This gives rise to a goal-oriented activity, the purpose of which is to satisfy the need. Once again, marketers seek to find out what motivates the buyer, and then understand the buying process and habits of business organizations in their markets.
Importance of the purchase of companies:
Buying or acquiring by companies, in the past a minor role in most organizations, is today an activity in which senior managers are much more interested. Once seen as an isolated activity that focused primarily on finding low prices, it has become an important part of the overall strategy for at least three reasons.
- • Companies now produce less and buy more. For example, 93% of the cost of an Applet computer is purchased content and for all manufacturers that content represents more than 50% of their final products. For many years General Motors owned the plants where many of the parts of its automobiles were built. But in 1992 it announced the closure of seven of them that had ceased to be competitive, so. Now I will use more independent providers. And with the importance that these have gained. Purchase becomes a key strategic management • Companies are under intense pressure of time and quality. In order to reduce costs and improve efficiency, they no longer acquire and maintain inventories of parts and supplies.Rather, they require raw materials and components that meet specifications to be delivered "just in time" for introduction into the production process. Compaq's proline line of personal computers is a good example of them. The company has a reputation for selling high-quality, high-priced products. However, an interesting competition for cheap computers forced her to change. The goal was set to create prolinea in 6 months and sell it for less than $ 1,000 dollars (that is, less than a third of the price of its similar model deskpro), without reducing the quality. In order to reach the goal, Compaq searched around the world for suppliers that combine the best prices with good quality and timely delivery. • To get goods what you need,companies concentrate their acquisitions on a smaller number of suppliers and establish long-term “partnership” relationships with them. It is a level of participation that goes beyond buying to include things like collaborating closely to design new products and giving financial support.
Reasons for purchase by industrial users:
According to a conception of the reasons for purchase, companies carry it out in a methodical and structured way. In general terms, it is assumed that the companies' purchase reasons are practical and totally unrelated to emotions. These types of clients are motivated to obtain the optimal combination of prices, quality, and services in the products they purchase. According to another point of view, they are human beings and their purchasing decisions undoubtedly are influenced by attitudes, perceptions and values. In fact, in the opinion of many vendors, they seem to be motivated more towards the achievement of personal goals than organizational goals, frequently giving rise to conflicts between these objects and mints.
The truth lies between both extremes. These types of buyers have two goals: to improve the position of their organization (in terms of profits and acceptance by society), protect or improve their personal position in them (their own interests), sometimes both goals are compatible with each other. For example, perhaps a company's top priority is saving money, and the buyer knows they would be rewarded for getting a low price. Of course, the more compatible the goals are with each other, the better for the organization and for the individual, and the easier it will be to make purchasing decisions.
There are, however, important areas where the buyer's objectives do not coincide with the organization's, such as when the organization insists on giving preference to the supplier with the lowest prices, but since the buyer has established a good relationship with another supplier, it does not wants to change it. In such cases, the seller must convince the buyer that what is best for the organization is best for him. Promotional messages directed at the buyer's personal interest are very useful when two or more sellers offer essentially the same products, prices and services after the sale.
References
- Marketing Fundamentals (Philip Kotler, Prentice Hall) Marketing Manual (Philip Kotler, Volume 1, Prentice Hall) Marketing Fundamentals (William Stanton)
