Custom Essays - Marketing Essays
Compare the buyer behaviour of sponsors and delegates in the corporate hospitality sector of the events industry...
Marketing orientated companies in the modern business world can be said to be engaged in attempts to satisfy customers through creating and adding value for these customers in order to compete more effectively than competitors in their industrial environment.
Of relevance to these activities have been the impacts of internationalisation and globalisation which have generated increased levels of competition in the marketplace in terms of both domestic and global competitors, (Sheth, 1973; Porter, 1980). Therefore the essence of formulating competitive strategy for a company is closely related to a complete understanding of industrial environment as this has a strong influence in determining the competitive forces with a bearing on the company. However the growth rate of the service industry which has mainly resulted from the development of technology, especially information technology, has focused attention on looking at the marketing aspect of service companies as they compete in the global business context, (Bradley, 2005). As such then the corporate hospitality sector of the events industry, for example, has as a key function a role in providing professional services such as sponsorship packages to sponsors and delegates which seeks to add value to the marketing efforts and efficiency made towards their customers, (Hoyle, 2002).
Along with growth in the service industry it is important to understand customer behaviour in terms of organisational buyers. This is discussed by Sheth (1973) who is one of the leading marketing thinkers in the area since organisational consumers purchase goods (or services in the CH sector) in order to satisfy organisational goals instead of individual demands. From this perspective organisational buyers are still composed of people with needs and attitudes yet their purchasing decisions are often part of a group or buying team which may be more rational and formal in outlook, (Blackwell et al, 2000). It can be argued that due to the rising power of consumers in the events industry and the complexity of organisational buying behaviour that it is essential for organisations within the corporate hospitality sector to be aware of the key influences and major trends related to the purchasing decision processes for sponsors and delegates.
Consumer Decision Making Process
One of the fundamental concepts for marketing orientated companies is the possession and generation of in-depth knowledge on targeted customer. These customers are those they aim to meet in satisfying their needs by offering better quality goods or services than those offered by competitors. According to Jobber (2001) customers are individuals who buy products for personal consumption however in the case of the CH event industry consumers are generally speaking organisational buyers. These are then principally focused on the purchasing of services in order to meet corporate needs as part of an organisational demand. At this stage the decision making processes is engaged in by a group of people. Engel, Blackwell and Miniard (1990) argue that five roles can be identified as being a part of the decision making process.
These are roles of initiator, influencer, decider, buyer and user with one person being able assume multiple roles within the process. Clearly each member in a buying group is influenced by psychological and sociological processes thus in order to reduce disagreement among team members the collection of additional information through search and discussion is often adopted during the decision making process as an aid. Additionally the roles of members often change in that namely the initiator in the sponsor company can be transferred to be a decider due to better personal knowledge than other members while delegates may be influencers at the beginning as well as users during the final stages. Therefore Engel, Blackwell and Miniard (1990) suggest that the marketing implications of understanding different roles in a buyer group can be used as essential component for developing persuasive communication and segmentation for marketers from the early stages of early decision making process onwards.
The decision making process can often be said to begin with a problem recognition and ends with a post evaluation of the purchasing decision. Engel, Blackwell and Miniard (2000) argue that it is a vital enterprise to understand the principles of how customers buy and what are the components and influences operating within the decision making process related to purchasing. Firstly the stage of problem awareness can be affected by functional and psychological factors and in the case of the CH sector consumer needs are largely related to their marketing purposes flowing from the achievement of other related corporate objectives. This is to say that when a customer’s situation is worse than the desired expectation there will be an increased need for improvement in their performance by purchasing effective and professional services which can be provided by the corporate hospitality sector. With this consideration in mind Sheth and Mittal (1996) believe that marketers do not create needs but engage in satisfying existing needs effectively. Thus marketing efforts and persuasive communication should be aimed at customers from the beginning steps in the decision making process of purchasing products. Additionally due to the complexity of organisational purchases the processes of information search and evaluation of alternatives tends to be characterised by a high involvement level for customers in order to reduce purchasing risks and reach agreement in the final purchase stages, (Jobber, 2001). It is important to mention that in considering the events industry different roles in the buyer group in terms of sponsors and delegates may evaluate services from different perspectives bearing in mind diversified organisational needs. Thus the corporate hospitality sector has to be able to satisfy these diverse and specific requirements within the context of complex purchasing decisions.
Influences on buying behaviour in the Corporate Hospitality Industry
For the corporate hospitality sector the organisational market can be seen as the industrial market which is concerned mainly with those organisations that purchase services in order to produce other goods and services, (Jobber, 2001). Mullins (2005) suggests that all organisations have functions to perform however some exist in order to achieve objectives through a synergistic efforts made by members of an organisation. Therefore people are one of the most important factors in organisations as well as in considering the processes of buying behaviour in terms of organisational buyers. Typically the nature of products or services produced by consumers generates significant effects on their purchasing behaviour in terms of attitude towards the events industry. This means that any new requirements for services may occur when the performance of their own internal products or services are not satisfactory. However they may have relatively little knowledge or information dealing with services provided by organisations within the corporate hospitality sector. At this stage information provisions plays a vital role in attracting new customers as well as retaining existing consumers.
Organisational learning is believed to be a critical activity in organisations where learning occurs based on new knowledge causing changes as well as the lessons learned from past experience, (Mullins, 2005). More importantly learning is a critical factor in the evaluation of alternatives to products or services and in the post purchase stages which have major influences on organisational buying behaviour in straight re-buy situations. In light of this Egan (2001) suggests that long term relationship management has become a key strategic outlook for companies in competing in the marketplace. However because of the nature of different organisations, some organisational customers prefer distant contacts where value adding in the past purchasing experience seems to be significantly important in the development and building of relationships. Of note also is the fact that reference groups also generate critical influences at this stage through word of mouth in that the power of shared information from certain kinds of reference groups can be strong on the purchasing decision, (Solomon et al, 2002). In contrast to this some organisations prefer to have a close relationship with partners based on trust and satisfactory experiences hence methods of building long term relationship relies on a detailed understanding on the nature of specific organisations related to their purchasing behaviours, (Palmer, 2001).
Jobber (2001) argues that the importance of a purchase is likely to be perceived as a key factor in shaping organisational buying behaviour. In the case of consumers for the CH sector motivation can be generated due to poor performance of corporate goods and services as well as organisational goals aimed at further growth and expansion for the organisation. Here the nature of value adding services provided by the CH sector can aim to assist sponsors and delegates in achieving their marketing needs effectively through the provision of targeted services. Similarly an extensive marketing force is needed to provide information and advice for customers in order to highlight that their services offer the best value for money in terms of supporting users in achieving organisational objectives facilitated by the product offered. This is because relationship marketing involves the creation and distribution of value through cooperation between service suppliers and consumers, (Sheth, 1974; 1996).
Consumer Decision Making and Marketing Mix
The 4P concept is a fundamental component in looking at corporate marketing mix strategies which includes product, price, promotion and distribution. Sheth and Mittal (1996) linked to this address the role of people being involved in the satisfying of customer needs. The term product includes tangible and intangible goods which in this case are the products provide by the CH sector are services such as exhibitions, sponsored conferences and commercial sponsorship packages. As mentioned before due to the price of this product organisational customers tend to be highly involved in the information search and evaluation stages. As such then price for better quality or namely value for money is a significant determinant for the success of organisations within the CH sector.
Within the promotion process people in this stage have vital roles in introducing and explaining their services to customers. This aspect is for Sheth and Mittal (1996) clearly supported by sound human resource management in that this is much more likely to meet customers’ expectations in that marketing and sales activities will benefit from a highly skilled and motivated workforce dealing with customers. Additionally the just in time concept has also focused attention on the nature and manner of the distribution of services and this is the case also for the events industry. The business world is changing rapidly thus consumers require effective and efficient services in order to achieve their goals in a short term necessitating quick response times on the part of organisations to these demands. This trend requires CH sectors to focus more on the design of service distribution methods and processes which can deliver quality services in the shortest time.
Conclusion
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Information about customers can be said to a be a critical consideration in the strategic planning process for any company bearing in mind the nature of the industrial environment they operate within, (Hooley, Saunders and Piercy, 2004). A central theme of this view is that identifying target customers and the role they play in the purchasing of products is essential in providing value to them. In the CH sector of the events industry however consumers tend to be organisational buyers thus their buying behaviour is more complex and is to a large extent influenced by the different roles of members in the buying team in terms of initiator, influencer, decider, purchaser and user as defined by Engel, Blackwell and Miniard (1990). Additionally Foxall et al (1998) suggest that the importance of consumers’ perceptions towards the marketing mix is a key issue because all elements of the marketing mix communicate to the customers during each stage of the decision making process related to the purchase of a service.
References
Bradley, F. (2005) International Marketing Strategy 5th edition, Harlow England, FT Prentice Hall.
Blackwell, R.D. et al (2000) Consumer Behaviour 9th edition, London UK, Dryden Press.
Engel, J.F., Blackwell, R.D. & Miniard, P.W. (1990) Consumer Behaviour 6th edition, Chicago USA, Dryden Press.
Egan, J. (2001) Relationship Marketing: Exploring Relational Strategies in Marketing, Harlow England, FT Prentice Hall.
Foxall, G.R., Goldsmith, R.E. & Brown, S. (1998) Consumer Psychology for Marketing 2nd edition, London UK, International Thomson Business Press.
Hooley, G., Saunders, J. & Piercy, N. (2004) Marketing Strategy and Competitive Positioning 3rd edition, Harlow UK, FT Prentice Hall.
Hoyle, L.H. (2002) Event Marketing: How to Successfully Promote Events, Festivals, Conventions, and Expositions, New York: USA, Wiley & Sons.
Palmer,A (2001) Principles of Services Marketing 2nd edition, London UK, McGraw-Hill.
Jobber, D. (2001) Principles and Practice of Marketing 3rd edition, London UK, McGraw-Hill Publishing Company.
Porter, M. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York USA, The Free Press.
Sheth, J.N. (1973) Multinational Business Operation: Advanced Readings, in Chisnall, (1995) Strategic Business Marketing 3rd edition, New York USA, Prentice Hall.
Sheth, J.N. & Mittal, B. (1996) A Framework for Managing Customer Expectations, Journal of Market-Focused Management Vol. 1.
Mullins, L.J. (2005) Management and Organisational Behaviour 7th edition, Harlow England, FT Prentice Hall.
Solomon, M., Bamossy, G. & Askegaard, S. (2002) Consumer Behaviour: A European Perspective, Harlow England, FT Prentice Hall.
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