 Well hello everyone and welcome back to Sailor Academy's MBA 602 Marketing Management. This is our review of Unit 4 and I just want to welcome everyone back who's been joining us before. A slight difference to what happens to usual we are recording this a little ahead of time so we will not be able to respond to your questions live in chat but we will absolutely get to your questions later so if you have any questions as we're going throughout this feel free to leave them in the comment section below and we'll get to them either down there or in a later video but for right now I'll hand it over to Dr. Salser to just get us going. Okay thank you Mike. All right so here we are at Unit 4 and in Unit 4 we will be covering consumer organizational and service marketing. So there are three learning objectives for for this unit and the first one is we will describe the characteristics of consumer marketing and buyer behavior. We'll talk about organizational markets and buying procedures and we're going to look specifically at how organizational the organizational buying process varies from the consumer buying process and we'll also look at the distinctive characteristics of marketing services which which varies significantly from marketing tangible products. So let's get right into it again and I've mentioned this in other in other reviews. Why are the learning objectives important? First of all they really set up the foundation of of the material that would be that's being covered. It ties back to the course material and the content within that particular unit. It's important to recognize that the assessments are tied to each learning objective so as we go through the learning objectives to really pay close attention because the assessments are tied to those objectives and it will also help you when you get ready to to start studying and preparing for for your exams. So if again this is being recorded so if you have any questions please make sure you put them in the comment section and we will get them we will get back to you as soon as we can. So the topics that we will be exploring today are specifically purchase decisions. We'll talk about different types of purchases. We'll look at the buying decision process for consumers as well as in business to business markets. We'll look at buying behavior as I mentioned before we'll talk about characteristics of services referrals as well as building customer relationships. So the first learning objective that we're going to explore today is to describe the characteristics of consumer marketing and buying behavior and specifically we'll look at the differences between high involvement purchase decisions and low involvement purchase decisions. We're going to look at the stages in the consumer buying process which you should note are the same whether or not we are purchasing we are making a high involvement or low involvement purchase decision and we'll also look at the factors that might impact the consumer decision making process. So let's first look at high involvement and low involvement purchase decisions and in this situation low involvement decision making are things that are more habitual decision purchase decisions that we make they could be impulse purchases and they're basically purchases that we make without really giving too much thought to what we're going to do. Generally those purchases have low risk associated with them as well as having a lower price. When it comes to a high involvement purchase decision for example we tend to spend more time gathering information the risk of making a poor choice is generally higher and generally the price of what we're buying is higher as well. So the example here for habitual and low involvement is something like soda soft drinks depending upon where you are and the wording that you use for those things limited problem solving kind of in the middle which I might refer to clothing and again extended problem solving might be to a car if you're someone that does not purchase a car too often and recognizing that the risk of making a bad decision is kind of high because it's an expensive purchase. So let's look at the consumer buying process and it's important to recognize that no matter what we buy whether it's a simple low involvement decision making process or whether it's a high involvement complex decision making process that the process is the same no matter what we buy the amount of time we spend on that process might vary but the process is always the same. So if we use an example let's say it's morning and you decide that it's time to provide your morning cup of coffee you have that need recognition for coffee you might spend very little time on making an information on doing an information search because you might have your regular favorite coffee shop that you that you make your purchase from so you might not give it really much thought you might not give any thought to any other alternatives your purchase decision might be made pretty quickly and if it's a place that you go too often your post-purchase behavior is likely to be the same each time unless of course you buy your typical cup of coffee and that particular day the coffee is no good so the process might be very quick because it's something that you buy all the time but let's let's say now you decide that you find that you need a new computer right the process of buying a new computer is going to take a lot more time than it took you to make the purchase decision for that cup of coffee if you're buying a new computer you're probably going to do a fair amount of search information what's available what kind of features does it does it have how much does it cost perhaps the timing might be a factor as well so you're going to do a lot of information spend a lot of time gathering that information and then once you have that information take probably a considerable amount of time evaluating the information that you have and the choices that are presented to you once you're done with that process which again could take quite a bit of time you're going to make your purchase decision buy that new computer and then once you have it decide whether or not you're happy with that so again the process is the same whether or not you're making an expensive purchase or a habitual purchase any amount of time that you spend on it will really vary from purchase to purchase so let's talk about some of the factors that impact the purchase decision process and these will all impact our our behavior so things like the situations that we find ourselves in can have an impact on on our decision-making process sometimes the store environment can be a factor think about stores that you've gone into where you feel that the store environment really feels wonderful and and it kind of makes you want to spend more time there and as a result you probably end up buying something as compared to going into a store where you'll go in and the environment isn't nice the store is maybe run down you know merchants that looks dirty or dusty those things can impact whether or not you can make a decision in that store or make that purchase decision the time of day can impact your decision-making process perhaps at the end of the day let's say if you go into a supermarket and you haven't had lunch maybe you might be buying more than you would have if you had gone in earlier in the day when you refresh you'd already had breakfast or something like that the weather can make us feel a certain way about the purchase decisions that we make as well as the kinds of things that we might be that we might be buying social factors so let's let's tie this together specifically with one of the bullet points a little bit further down that talks about friends and family so the social factors and friends and family relate to our reference groups the people with whom we associate the people that we spend time with every day our family our friends even co-workers these are our reference groups the people that we interact with on a regular basis and we have a tendency to gather information from those people because we trust them we know them we spend a lot of time with them and so those the kinds of things that those the people that we associate with buy can impact the kinds of things that we buy as well the groups with with with whom we associate the lifestyles that we have all of these come together and impact what we're going to buy and when we're going to buy it we also might have personal motivations maybe about might be related to image it might be related to specific needs so those can impact our decision making factor as well as demographics if we think about the kinds of things that we all buy at different stages of our lives when we're at different ages we have different we're in a different life cycle aspects of our lives different income levels so as we go through our lives the the factors that define us demographically can change and can also impact the kinds of things that we buy and I think that no no marketing class would be complete without a discussion of Maslow and Maslow's hierarchy of needs and if we look at the graphic here the first thing that we need and really the main things that we all need are just food clothing and shelter and so we can't really move on to making other purchase decisions until our needs for food clothing and shelter have been satisfied once those needs have been met we can move on to other things where we want employment and personal security and health and and perhaps property once we once we have those needs met we can then move on to love and belonging we want to have friends we want to have you know relationships in our lives we want a sense of belonging a sense of connection uh moving on to that once we have those things we can feel more confident in ourselves we have feelings of respect self-esteem status recognition and and ultimately to self-actualization and the desire to be the best that we can be and as we move through all of these different levels we're going to be making different purchase decisions based on where we are in those different stages so so you know our consumer decision-making process is quite complex even if we're not fully aware of it but as a marketer you want to have a full understanding of your target market of the kinds of messaging that's going to be appropriate at a particular time of life for your customers and that are going to address the specific needs that consumers have at the particular time that will influence how they make their decisions so again at this point that does wrap up learning outcome one again if you have any questions feel free to put them in the comment box and as as I have mentioned earlier and as Mike mentioned earlier we will address those at a later time so moving on to the second learning outcome for unit four we're going to explain the aspects of organizational markets and buying procedures and look at the characteristics of a B2B marketplace a business to business market will specifically be looking at how this varies and how it differs from a consumer decision-making process we'll look at the stages of the B2B buying process we'll look at different types of business to business buying situations and we're going to look specifically at a buying center and who its members are and again all of this looking at it from a different perspective from the from the consumer decision-making process so let's look at some of the differences between the business to business and business to consumer markets so first of all a business to business market has fewer customers there were going to be fewer players in the overall list of companies that that will be buying from an organization also there's a smaller number of customers that will impact company sales overall transactions will have larger dollar amounts because companies are buying in volume and you know at larger quantities than we would as consumers it's also important to note that even if we're looking at a business to consumer decision process where we might say well it might take a little bit of time to make that decision the business to business decision-making process is is even longer it's a very lengthy purchase process there's a strong reliance on personal selling I remember earlier we talked about personal selling as it relates to a business to consumer process but in the business to business marketplace personal selling is is essential and there are very rigid product standards so let's look at the stages in in the business to business buying process so much like the consumer decision process it's it really starts with the need recognition but at that point that's where it really diverges into a completely different into a completely different process once there is a need recognition the next step is to define and quantify the need and this is where the product specifications are are identified which can be much more complex for an organization a company will look at potential buyers excuse me potential suppliers which will then result in an RFP process which is the request for proposal so a company when they're getting ready to make a purchase will go to their different potential suppliers and ask them for a proposal on what it is the company is is looking to buy once that happens the the proposal will be analyzed which is much like the consumer process where you're looking at your different choices but the supplier will be selected and the criteria on which a company is making decision will be will very very different very much from a consumer process the next stage is to make the order you know specify the the requirements make the purchase and then following that evaluate the performance of the purchase very often using metrics that will be quite complex so let's look at the different kinds of buying situations that companies find themselves in so if we start with a straight rebuy it's when a company will buy the same products from the same supplier and generally that will be a pretty quick process as long as there's no problems with with the purchases in advance sometimes a company will just have these as an automatic renewal for the purchase and maybe the company might not even go through the entire process in advance but just say okay you know we want to make this you know we'll make this purchase every month we don't need to go through the whole process each time a new buy situation is when a company buys something for the very first time so that's going to be quite complex because they'll be buying they'll have to make sure that the specifications are clear there might be a more in-depth evaluation of the different options that are available certainly there'll be more in a more in-depth research into the companies into the different suppliers that are available so that's going to take generally quite a bit of time a modified rebuy is sort of a combination where a company will buy something they've purchased in the past but they might make some changes so they might make changes to product updates they might change make changes to delivery options as to when maybe the frequency of a purchase or even the quantities that are purchased so these are the different buying situations that a company will find themselves in and depending upon which one will determine the complexity of the process okay so let's look at a buying center so within an organization a buying center are all of the people that will be involved in making the purchase decisions so the the center will include initiators and those are the people who first identify a need within an organization they may not necessarily be the users so there were users within the organization and they will be the ones who will actually use the product they might be the initiators but not necessarily the influencers also may or may not use the product but can kind of integrate their experience into the buying process the gatekeepers these are very important people they are controlling the flow of the suppliers who have access to the decision makers within the organization the deciders are the people who will ultimately make the purchase decision and the position in an organization for a decider can really vary based on the cost and importance of the purchase itself so if we're talking about small inexpensive purchases the decider might be at a lower level within the organization whereas if we're talking about maybe higher quantities or more expensive purchases the decider will likely be someone who as who is maybe at the top levels of the organization so all of these players are what comprise the buying center again this is a point where we would pause for questions but as you've reviewed and gone through the first two learning outcomes feel free to put your comments into the comment box and we will be sure to get back to you with the answers to these questions so moving on to the final learning outcome for unit four we'll describe the distinctive characteristics of marketing services and we'll look at the four eyes of marketing services and how a service business can benefit from things like referrals reactivation demonstrating results in advance as well as personal interaction so it's important to recognize that services differ in many ways from from tangible goods and the way that we can identify the characteristics of services is to look at the four eyes and the first I refer refers to intangibility and this is because a service cannot be touched we can't hold it we can't see it it's it's much more vague so that's the first thing to consider when we're talking about how we go into market or service the next factor is inconsistency because services because they're not delivered by the same people each time they the quality can vary from provider to provider now it's also important to recognize that even if a service is delivered by the same person each time this still can be consistency rather so for example let's say if we talk about the service of getting a haircut and you go to the same haircut or barber stylist each time you may not get the same quality each time you go to that person for any number of reasons it might be different time of the day the person might be tired they might not be feeling well they might be having a bad day they might be having a good so there's that factor of inconsistency that can be constant throughout the purchases of that of that service so inseparability so it's important to recognize that the service and the provider cannot be separated the person who is providing you with the service is also cannot be separated from that service itself so they're they're intertwined inextricably and finally inventory services cannot be stored so let's say if we look at a hotel that provides us some tangible goods but it's also providing us with the service of a room for the night if a room is is not occupied on any particular night that cannot be stored that is it's lost it's lost it's lost profits it's lost revenue you can store a hotel room from one day to the next if a store doesn't sell a dress on a particular day they can save it to sell on another day but services cannot be stored if an airline travels on a particular day and there's an empty seat that's lost revenue they cannot store that that seat so these are the kinds of some of the challenges associated with with certain marketing a service and understanding the factors that define a service to us and to the providers so how do you grow a service business the first thing is you want to have referrals you want to ask your your customers to refer you to other people to other businesses it's important to ask for those referrals because if you don't ask for them your customers may not actually take the time or effort to think about doing that reactivation is when a company uses other aspects of their business to bring in new customers so it's important to make sure that a company follows up on leads sends personalized emails trying to determine the level of interest and these can all open up excuse me open up new opportunities also it's important to make sure that a company leverages their websites in a way that can be used for lead generation and provide valuable information asked for you know interests asked for information from your customers so that you can provide content that will be important and meaningful for them another way to grow a service business is to offer things for free this way a customer can potentially see what you have to offer see the value that you bring and recognize that what they pay for can be even more significant and very often companies or individuals are hesitant to give away free content say well if you know we're giving away free there's no reason for someone to actually pay for our services when in fact giving free content can generate interest you're not giving away everything you're giving away a taste of what you have to offer and that could demonstrate the value that you have to offer to customers and potential customers special events have conferences have workshops have webinars these can all highlight the services that you have to offer in a in a real direct way and this leads to the to the final aspect of how to grow a service business is by that personal interaction you're able to be face to face with with people that or organizations that might be interested in what you have to offer so those special events will you know generate interest but make sure that you use those special events to to have that personal interaction to to use the opportunity to build those those important strategic relationships and in service businesses it's very important to to have those relationships to make sure that your customers know that you're there to provide them with the benefit that you're giving them value and that can only be achieved by that personal interaction you can generate greater customer loyalty and and also make sure that their interests are what's most important to you in delivering those services so so having that you know effective presentation is important again you're highlighting your your specific process showing how you're different from the competition and differentiation so important and and really ensuring that you're building that relationship in a way that can generate the trust that can lead to to loyal customers going forward in the future and with that we conclude unit four as I had said earlier it was a little bit rougher than some of the other units that we've covered but really you know content rich in terms of of business to business and and and how we can market services so again I thank you for joining me and as always again put your questions in the comment box and I will be getting back to you as soon as possible and I look forward to seeing you in the review for future units thank you so much thank you everybody and we will we will be also prerecorded next week or we won't be but it won't matter because I'm just putting this in to remind myself that I'm going to put a thing in where I say stuff later but it won't matter because you're just going to be in there looking like I'm talking and I'm just going to have my face going and we'll see you this time and this is about the amount of time it will take and then go so just thank you again everyone for joining us thank you again Dr. Salazar for walking us through this and check out the video next week thank you