Chapter 2 Defining and Understanding the Consumer (Tourism and Hospitality Marketing )

1. Defining and Understanding the Consumer

2. Presented By:
Md. Shaifullar Rabbi
Professional Experiences
 Lecturer- BTHM, Daffodil Institute of IT
 Assessor at Bangladesh Technical Education
Board (Ticketing and Reservation)
 Guest Lecturer – BTHM,IBAIS University
 Guest Trainer at ATAB Tourism Training Institute
 Guest Trainer at Sheikh Hasina National Institute
ofYouth Development
 Former Manager at Mamun Air Service
 Former-Sales & Marketing Executive at City Air
International
Educational Qualifications
 MBA & BBA-Major in Tourism &
Hospitality Management, University of
Dhaka.
 Certified NTVQF Level -4/Assessor
Part( Ticketing and Reservation)
 Completed Diploma Course in Travel
Agency & Tour Operation Management
 Certified NTVQF Level 2 Course
entitled Ticketing & Reservation
 Certified NTVQF Level 1 Course
entitled Tour Guiding

3. The Functions of Management
Clearly, information systems that claim to support managers cannot be built
unless one understands what managers do and how they do it. The classical
model of what managers do, espoused by writers in the 1920's, such as Henry
Fayol, whilst intuitively attractive in itself, is of limited value as an aid to
information system design. The classical model identifies the following 5
functions as the parameters of what managers do:
 Planning
 Organizing
 Coordinating
 Deciding
 Controlling

4. Behavioral Models Describe 6 Managerial Characteristics
High volume, high speed work
Variety, fragmentation, brevity
 Issue preference current, ad hoc, specific
Complex web of interactions, contacts
Strong preference for verbal media.

5. Managerial Roles
 Mintzberg suggests that managerial activities fall into 3 categories:
interpersonal, information processing and decision making. An important
interpersonal role is that of figurehead for the organization. Second, a
manager acts as a leader, attempting to motivate subordinates. Lastly,
managers act as a liaison between various levels of the organization and,
within each level, among levels of the management team.
 A second set of managerial roles, termed as informational roles, can be
identified. Managers act as the nerve center for the organization, receiving
the latest, most concrete, most up-to-date information and redistributing it to
those who need to know.
 A more familiar set of managerial roles is that of decisional roles. Managers
act as entrepreneurs by initiating new kinds of activities; they handle
disturbances arising in the organization; they allocate resources where they
are needed in the organization; and they mediate between groups in conflict
within the organization.

6. Decision Making
Decision making is often seen as the center of what managers do something that engages most of a
manager’s time. It is one of the areas that information systems have sought most of all to affect (with
mixed success). Decision making can be divided into 3 types: strategic, management control and
operations control.
 Strategic decision making: This level of decision making is concerned with deciding on the
objectives, resources and policies of the organization. A major problem at this level of decision
making is predicting the future of the organization and its environment, and matching the
characteristics of the organization to the environment. This process generally involves a small
group of high-level managers who deal with very complex, non-routine problems.
 Management control decisions: Such decisions are concerned with how efficiently and
effectively resources are utilized and how well operational units are performing. Management
control involves close interaction with those who are carrying out the tasks of the organization; it
takes place within the context of broad policies and objectives set out by strategic planners.
 Operational control decisions: These involve making decisions about carrying out the
“specific tasks set forth by strategic planners and management. Determining which units or
individuals in the organization will carry out the task, establishing criteria of completion and
resource utilization, evaluating outputs - all of these tasks involve decisions about operational
control.

7. MARKETING INFORMATION SYSTEM
A marketing information system (MIS) is a way to manage the vast amount
of information firms have on hand—information marketing professionals
and managers need to make good decisions. Marketing information
systems range from paper-based systems to very sophisticated computer
systems. Ideally, however, a marketing information system should include
the following components:
 A system for recording internally generated data and reports
 A system for collecting market intelligence on an ongoing basis
 Marketing analytics software to help managers with their decision
making
 A system for recording marketing research information

8. Internally Generated Data and Reports
 As we explained, an organization generates and records a lot of information as part
of its daily business operations, including sales and accounting data, and data on
inventory levels, back orders, customer returns, and complaints. Firms are also
constantly gathering information related to their Web sites, such as click stream
data. Click stream data is data generated about the number of people who visit a
Web site and its various pages, how long they dwell there, and what they buy or don’t
buy.
 Analytics Software: Increasingly, companies are purchasing analytics software to
help them pull and make sense of internally generated information. Analytics
software allows managers who are not computer experts to gather all kinds of
different information from a company’s databases—information not produced in
reports regularly generated by the company. The software incorporates regression
models, linear programming, and other statistical methods to help managers answer
“what if” types of questions. For example, “If we spend 10 percent more of our
advertising on TV ads instead of magazine ads, what effect will it have on sales?”
Oracle Corporation’s Crystal Ball is one brand of analytical software.

9. Market Intelligence
A good internal reporting system can tell a manager what happened inside his firm.
 Search Engines and Corporate Web Sites: An obvious way to gain market intelligence is by examining
your competitors’ Web sites as well as doing basic searches with search engines like Google. If you
want to find out what the press is writing about your company, your competitors, or any other topic
you’re interested in, you can sign up to receive free alerts via e-mail by going to Google Alerts.
 Publications: The Economist, the Wall Street Journal, Forbes, Fortune, Business Week, the McKinsey
Report, Sales and Marketing Management, and the Financial Times are good publications to read to
learn about general business trends.
 Trade Shows and Associations: Trade shows are another way companies learn about what their
competitors are doing.
 Salespeople: A company’s salespeople provide a vital source of market intelligence. Suppose one of
your products is selling poorly.
 Suppliers and Industry Experts: Your suppliers can provide you with a wealth of information. Good
suppliers know which companies are moving a lot of inventory.
 Customers: Lastly, when it comes to market intelligence don’t neglect observing how customers are
behaving.

10. Components of a Marketing Information System
 A marketing information system (MIS) is intended to bring together
disparate items of data into a coherent body of information. An MIS is,
as will shortly be seen, more than raw data or information suitable for
the purposes of decision making. An MIS also provides methods for
interpreting the information the MIS provides. Moreover, as
Kotler's1 definition says, an MIS is more than a system of data collection
or a set of information technologies:
 "A marketing information system is a continuing and interacting
structure of people, equipment and procedures to gather, sort, analyze,
evaluate, and distribute pertinent, timely and accurate information for
use by marketing decision makers to improve their marketing
planning, implementation, and control".
 Figure illustrates the major components of an MIS, the environmental
factors monitored by the system and the types of marketing decision
which the MIS seeks to underpin.

11. Figure :The marketing information systems and its subsystems

12. Internal Reporting Systems
All enterprises which have been in operation for any period of
time nave a wealth of information. However, this information
often remains under-utilized because it is compartmentalized,
either in the form of an individual entrepreneur or in the
functional departments of larger businesses. That is,
information is usually categorized according to its nature so
that there are, for example, financial, production, manpower,
marketing, stockholding and logistical data. Often the
entrepreneurs, or various personnel working in the functional
departments holding these pieces of data, do not see how it
could help decision makers in other functional areas.
Similarly, decision makers can fail to appreciate how
information from other functional areas might help them and
therefore do not request it.

13. Marketing Research Systems
The general topic of marketing research has been the prime '
subject of the textbook and only a little more needs to be added
here. Marketing research is a proactive search for information. That
is, the enterprise which commissions these studies does so to solve
a perceived marketing problem. In many cases, data is collected in
a purposeful way to address a well-defined problem (or a problem
which can be defined and solved within the course of the study).
The other form of marketing research centers not on a specific
marketing problem but is an attempt to continuously monitor the
marketing environment. These monitoring or tracking exercises are
continuous marketing research studies, often involving panels of
farmers, consumers or distributors from which the same data is
collected at regular intervals. Whilst the ad hoc study and
continuous marketing research differs in the orientation, yet they
are both proactive.

14. Marketing Intelligence Systems
Whereas marketing research is focused, market intelligence
is not. A marketing intelligence system is a set of procedures
and data sources used by marketing managers to sift
information from the environment that they can use in their
decision making. This scanning of the economic and
business environment can be undertaken in a variety of
ways, including-

15. Unfocused scanning The manager, by virtue of what he/she reads, hears and watches exposes him/herself to information
that may prove useful. Whilst the behavior is unfocused and the manager has no specific purpose in
mind, it is not unintentional
Semi-focused scanning Again, the manager is not in search of particular pieces of information that he/she is actively searching
but does narrow the range of media that is scanned. For instance, the manager may focus more on
economic and business publications, broadcasts etc. and pay less attention to political, scientific or
technological media.
Informal search
This describes the situation where a fairly limited and unstructured attempt is made to obtain
information for a specific purpose. For example, the marketing manager of a firm considering entering
the business of importing frozen fish from a neighboring country may make informal inquiries as to
prices and demand levels of frozen and fresh fish. There would be little structure to this search with the
manager making inquiries with traders he/she happens to encounter as well as with other ad
hoc contacts in ministries, international aid agencies, with trade associations, importers/exporters etc.
Formal search
This is a purposeful search after information in some systematic way. The information will be required
to address a specific issue. Whilst this sort of activity may seem to share the characteristics of
marketing research it is carried out by the manager him/herself rather than a professional researcher.
Moreover, the scope of the search is likely to be narrow in scope and far less intensive than marketing
research

16. Marketing Models
Within the MIS there has to be the means of interpreting
information in order to give direction to decision. These
models may be computerized or may not.Typical tools are:
· Time series sales modes
· Brand switching models
· Linear programming
· Elasticity models (price, incomes, demand, supply, etc.)
· Regression and correlation models
· Analysis of Variance (ANOVA) models
· Sensitivity analysis
· Discounted cash flow
· Spreadsheet 'what if models

17. To develop standards of conduct and create respect for marketing
professionals who gather market intelligence, the Society of
Competitive Intelligence Professionals has developed a code of
ethics.
 To continually strive to increase the recognition and respect of the profession.
 To comply with all applicable laws, domestic and international.
 To accurately disclose all relevant information, including one’s identity and
organization, prior to all interviews.
 To avoid conflicts of interest in fulfilling one’s duties.
 To provide honest and realistic recommendations and conclusions in the execution of
one’s duties.
 To promote this code of ethics within one’s company, with third-party contractors and
within the entire profession.
 To faithfully adhere to and abide by one’s company policies, objectives and
guidelines.

18. Marketing Research
Marketing research is what a company has to resort to if it can’t
answer a question by using any of the types of information we have
discussed so far—market intelligence, internal company data, or
analytics software applied to data. As we have explained, marketing
research is generally used to answer specific questions. The name
you should give your new product is an example. Unless your
company has previously done some specific research on product
names—what consumers think of them, good or bad—you’re
probably not going to find the answer to that question in your
internal company data. Also, unlike internal data, which is
generated on a regular basis, marketing research is not ongoing.
Marketing research is done on an as-needed or project basis. If an
organization decides that it needs to conduct marketing research, it
can either conduct marketing research itself or hire a marketing
research firm to do it.

19. Alex J. Caffeine, the president and founder of the marketing research firm anal sights,
believes there are a number of other reasons companies mistakenly do marketing
research. Caffeine’s explanations about why a company’s executives sometimes make
bad decisions are somewhat humorous. Read through them:
 “We’ve always done this research.” (The research has taken on a life of its own; this particular
project has continued for years and nobody questioned whether it was still relevant.)
 “Everyone’s doing this research.” (Their competitors are doing it, and they’re afraid they’ll
lose competitive advantage if they don’t; yet no one asks what value the research is creating.)
 “The findings are nice to know.” (Great—spend a lot of money to create a wealth of useless
information. If the information is nice to know, but you can’t do anything with it, you’re wasting
money.)
 “If our strategy fails, having done the research will show that we made our best educated
guess.” (They’re covering their butts. If things go wrong, they can blame the findings, or the
researcher.)
 “We need to study the problem thoroughly before we decide on a course of action.” (They’re
afraid of making a tough decision. Conducting marketing research is a good way to delay the
inevitable. In the meantime, the problem gets bigger, or the window of opportunity closes.)
 “The research will show that our latest ad campaign was effective.” (They’re using marketing
research to justify past decisions. Rarely should marketing research be done after the fact)
(Caffarini).

20. Consumer Buying Behavior
Definition of Buying Behavior: Buying Behavior is the decision processes and acts of
people involved in buying and using products.
o Need to understand:
 Why consumers make the purchases that they make?
 What factors influence consumer purchases?
 The changing factors in our society.
o Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A
firm needs to analyze buying behavior for:
 Buyer’s reactions to a firms marketing strategy has a great impact on the firms
success.
 The marketing concept stresses that a firm should create a Marketing Mix(MM) that
satisfies (gives utility to) customers, therefore need to analyze the what, where, when
and how consumers buy.
 Marketers can better predict how consumers will respond to marketing strategies.

21. Model of Consumer Behavior
The Environment: Marketing stimuli consist of the four
Ps: Product, Price, Place, and Promotion. Other stimuli
include major forces and events in the buyer’s
environment: Economic, Technological, Political, and
Cultural. All these inputs enter the buyer’s black box,
where they are turned into a set of buyer responses:
Buyers Black Box: This shows that marketing and other
stimuli enter the consumer’s “black box” and produce
certain responses. Marketers must figure out what is in
the buyer’s black box.
Buyers Responses: The buyer’s brand and company
relations.

22. Stages of the Consumer Buying Process
Six Stages to the Consumer Buying Decision Process (For
complex decisions). Actual purchasing is only one stage of the
process. Not all decision processes lead to a purchase. All
consumer decisions do not always include all 6 stages,
determined by the degree of complexity.
Problem Recognition
Information search
Evaluation of Alternatives
Purchase decision
Purchase
Post-Purchase Evaluation

23. o Problem Recognition (awareness of need)--difference between the desired state and the actual
condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat.
Can be stimulated by the marketer through product information--did not know you were
deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you
need a new pair of shoes.
o Information search--
 Internal search, memory.
 External search if you need more information. Friends and relatives (word of mouth). Marketer
dominated sources; comparison shopping; public sources etc.
o Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or
does not want. Rank/weight alternatives or resume search. May decide that you want to eat
something spicy, Indian gets highest rank etc. If not satisfied with your choice then returns to the
search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from
different sources may be treated differently. Marketers try to influence by "framing" alternatives.
o Purchase decision--Choose buying alternative, includes product, package, store, method of
purchase etc.
o Purchase--May differ from decision, time lapse between 4 & 5, product availability.
o Post-Purchase Evaluation-- outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance,
have you made the right decision. This can be reduced by warranties, after sales communication
etc. After eating an Indian meal, may think that really you wanted a Chinese meal instead.

24. Types of Consumer Buying Behavior
o Types of consumer buying behavior are determined by:
 Level of Involvement in purchase decision. Importance and intensity of
interest in a product in a particular situation.
 Buyers’ level of involvement determines why he/she is motivated to
seek information about a certain products and brands but virtually
ignores others.
o High involvement purchases--Honda Motorbike, high priced goods,
products visible to others, and the higher the risk the higher the
involvement.Types of risk:
 Personal risk
 Social risk
 Economic risk

25. The four type of consumer buying behavior are-
 Routine Response/Programmed Behavior--buying low involvement frequently
purchased low cost items; need very little search and decision effort;
purchased almost automatically. Examples include soft drinks, snack foods,
milk etc.
 Limited Decision Making--buying product occasionally. When you need to
obtain information about unfamiliar brand in a familiar product category,
perhaps. Requires a moderate amount of time for information gathering.
Examples include Clothes--know product class but not the brand.
 Extensive Decision Making/Complex high involvement, unfamiliar, expensive
and/or infrequently bought products. High degree of
economic/performance/psychological risk. Examples include cars, homes,
computers, education. Spend allot of time seeking information and deciding.
Information from the companies MM; friends and relatives, store personnel
etc. Go through all six stages of the buying process.
 Impulse buying, no conscious planning.

26. Categories that Affect the Consumer Buying Decision Process-
A consumer, making a purchase decision will be affected by
the following three factors:
Personal
Psychological
Social
o Personal: Unique to a particular person. Demographic
Factors. Sex, Race, Age etc. Who in the family is responsible
for the decision making? Young people purchase things for
different reasons than older people.

27. Psychological Factors
Psychological factors include:
o Motives- A motive is an internal energizing force that orients a
person's activities toward satisfying a need or achieving a goal.
Actions are effected by a set of motives, not just one. If marketers
can identify motives then they can better develop a marketing
mix.
o MASLOW hierarchy of needs!!
Physiological
Safety
Love and Belonging
Esteem
Self Actualization

28. Need to determine what level of the hierarchy the
consumers are at to determine what motivates their
purchases.
 Perception--Perception is the process of selecting, organizing and interpreting
information inputs to produce meaning. IE we chose what info we pay attention to,
organize it and interpret it. Information inputs are the sensations received through sight,
taste, hearing, smell and touch.
 Selective Exposure-select inputs to be exposed to our awareness. More likely if it is
linked to an event, satisfies current needs, intensity of input changes (sharp price drop).
 Selective Distortion-Changing/twisting current received information, inconsistent with
beliefs.
 Advertisers that use comparative advertisements (pitching one product against another),
have to be very careful that consumers do not distort the facts and perceive that the
advertisement was for the competitor. A current example...MCI and AT&T...do you ever
get confused?
 Selective Retention-Remember inputs that support beliefs, forgets those that don't.
Average supermarket shopper is exposed to 17,000 products in a shopping visit lasting
30 minutes-60% of purchases are unplanned. Exposed to 1,500 advertisements per day.
Can't be expected to be aware of all these inputs, and certainly will not retain many.

29. Ability and Knowledge
 Need to understand individual’s capacity to learn. Learning, changes in
a person's behavior caused by information and experience. Therefore
to change consumers' behavior about your product, need to give them
new information re: product...free sample etc.
 When making buying decisions, buyers must process information.
Knowledge is the familiarity with the product and expertise.
 Inexperience buyers often use prices as an indicator of quality more
than those who have knowledge of a product. Non-alcoholic Beer
example: consumers chose the most expensive six-pack, because they
assume that the greater price indicates greater quality.
 Learning is the process through which a relatively permanent change
in behavior results from the consequences of past behavior.

30. Attitudes
Knowledge and positive and negative feelings about
an object or activity-maybe tangible or intangible,
living or non- living.....Drive perceptions
Individual learns attitudes through experience and
interaction with other people.
Consumer attitudes toward a firm and its products
greatly influence the success or failure of the firm's
marketing strategy.

31. Personality
All the internal traits and behaviors that make a person unique, uniqueness
arrives from a person's heredity and personal experience. Examples include:
 Compulsiveness
 Self confidence
 Friendliness
 Adaptability
 Ambitiousness
 Dogmatism
 Authoritarianism
 Introversion
 Extroversion
 Aggressiveness
 Competitiveness.

32. Lifestyles
Recent US trends in lifestyles are a shift
towards personal independence and
individualism and a preference for a
healthy, natural lifestyle. Lifestyles are the
consistent patterns people follow in their
lives.

33. Social Factors
Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family,
reference groups, social class and culture.
o Opinion leaders-- Spokespeople etc. Marketers try to attract opinion leaders...they actually use
(pay) spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.)
o Roles and Family Influences-- Role...things you should do based on the expectations of you
from your position within a group. People have many roles. Husband, father, employees.
Individuals role are continuing to change therefore marketers must continue to update
information. Family is the most basic group a person belongs to. Marketers must understand:
 that many family decisions are made by the family unit
 consumer behavior starts in the family unit
 family roles and preferences are the model for children's future family (can reject/alter/etc)
 family buying decisions are a mixture of family interactions and individual decision making
 Family acts an interpreter of social and cultural values for the individual.

34. The Family life cycle: families go through stages;
each stage creates different consumer demands:
 bachelor stage...most of BUAD301
 newly married, young, no children...me
 full nest I, youngest child under 6
 full nest II, youngest child 6 or over
 full nest III, older married couples with dependent children
 empty nest I, older married couples with no children living with them, head in labor force
 empty nest II, older married couples, no children living at home, head retired
 solitary survivor, in labor force
 solitary survivor, retired
 Modernized life cycle includes divorced and no children.

35. Reference Groups
Individual identifies with the group to the extent that he takes on
many of the values, attitudes or behaviors of the group members.
Families, friends, sororities, civic and professional organizations.
Any group that has a positive or negative influence on a person’s
attitude and behavior.
Membership groups (belong to) Affinity marketing is focused on
the desires of consumers that belong to reference groups.
Marketers get the groups to approve the product and
communicate that approval to its members. Credit Cards etc.!!
The degree to which a reference group will affect a purchase
decision depends on an individual’s susceptibility to reference
group influence and the strength of his/her involvement with the
group.

36. Social Class
Social class influences many aspects of our lives. IE upper middle class
Americans prefer luxury cars Mercedes.
 Upper Americans-upper-upper class, .3%, inherited wealth, aristocratic names.
 Lower-upper class, 1.2%, newer social elite, from current professionals and corporate
elite
 Upper-middle class, 12.5%, college graduates, managers and professionals
 Middle Americans-middle class, 32%, average pay white collar workers and blue collar
friends
 Working class, 38%, average pay blue collar workers
 Lower Americans-lower class, 9%, working, not on welfare
 Lower-lower class, 7%, on welfare
o Culture and Sub-culture-- Culture refers to the set of values, ideas, and
attitudes that are accepted by a homogenous group of people and transmitted
to the next generation.

37. Organizational Buyer Behavior
 Individual consumers are not the only buyers in a market. Companies and
other organizations also need goods and services to operate, run their
businesses, and produce the offerings they provide to one another and to
consumers. These organizations, which include producers, resellers,
government and nonprofit groups, buy a huge variety of products including
equipment, raw materials, finished goods, labor, and other services. Some
organizations sell exclusively to other organizations and never come into
contact with consumer buyers.
 B2B markets have their own patterns of behavior and decision-making
dynamics that are important to understand for two major reasons. First, when
you are a member of an organization, it’s helpful to appreciate how and why
organization buying decisions are different from the decisions you make as
an individual consumer. Second, many marketing roles focus on B2B rather
than B2C marketing, or they may be a combination of the two. If you have
opportunities to work in B2B marketing, you need to recognize how the
decision-making process differs in order to create effective marketing for
B2B customers and target segments.

38. Characteristics of Organizational Buying
Five characteristics mark the organizational buying process:
• In organizations, many individuals are involved in making buying decisions.
• The organizational buyer is motivated by both rational and quantitative criteria dominant
in organizational decisions; the decision makers are people, subject to many of the same
emotional criteria used in personal purchases.
• Organizational buying decisions frequently involve a range of complex technical
dimensions. A purchasing agent for Volvo Automobiles, for example, must consider a
number of technical factors before ordering a radio to go into the new model. The
electronic system, the acoustics of the interior, and the shape of the dashboard are a few of
these considerations.
• The organizational decision process frequently spans a considerable time, creating a
significant lag between the marketer's initial contact with the customer and the purchasing
decision. Since many new factors can enter the picture during this lag time, the marketer's
ability to monitor and adjust to these changes is critical.
• Organizations cannot be grouped into precise categories. Each organization has a
characteristic way of functioning and a personality.

39. The Organizational Buying Process
The organizational buying process contains eight stages. Although these stages parallel
those of the consumer buying process, there are important differences that have a direct
bearing on the marketing strategy. The complete process occurs only in the case of a
new task. Even in this situation, however, the process is far more formal for the industrial
buying process than for the consumer buying process.
 Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order-routine specification
 Performance review

40.  Problem recognition- The process begins when someone in the organization
recognizes a problem or need that can be met by acquiring a good or service. Problem
recognition can occur as a result of internal or external stimuli. External stimuli can be a
presentation by a salesperson, an ad, or information picked up at a trade show.
 General need description- Having recognized that a need exists, the buyers must add
further refinement to its description. Working with engineers, users, purchasing agents,
and others, the buyer identifies and prioritizes important product characteristics.
Capsule 8 lists several sources of information for many industrial customers. Armed
with extensive product knowledge, this individual is capable of addressing virtually all
the product-related concerns of a typical customer.
 Product specification- Technical specifications come next. This is usually the
responsibility of the engineering department. Engineers design several alternatives,
depending on the priority list established earlier.
 Supplier search- The buyer now tries to identify the most appropriate vendor. The
buyer can examine trade directories, perform a computer search, or phone other
companies for recommendations. Marketers can participate in this stage by contacting
possible opinion leaders and soliciting support or by contacting the buyer directly.
Personal selling plays a major role at this stage.

41.  Proposal solicitation- Qualified suppliers are next invited to submit proposals. Some
suppliers send only a catalog or a sales representative. Proposal development is a
complete task that requires extensive research and skilled writing and presentation. In
extreme cases, such proposals are comparable to complete marketing strategies found
in the consumer sector.
 Supplier selection- At this stage, the various proposals are screened and a choice is
made. A significant part of this selection is evaluating the vendor. One study indicated
that purchasing managers felt that the vendor was often more important than the
proposal. Purchasing managers listed the three most important characteristics of the
vendor as delivery capability, consistent quality, and fair price. Another study found
that the relative importance of different attributes varies with the type of buying
situations. For example, for routine-order products, delivery, reliability, price, and
supplier reputation are highly important. These factors can serve as appeals in sales
presentations and in trade ads.
 Order-routine specification- The buyer now writes the final order with the chosen
supplier, listing the technical specifications, the quantity needed, the warranty, and so
on.
 Performance review- In this final stage, the buyer reviews the supplier's performance.
This may be a very simple or a very complex process.

42. Participants in the Organizational Buying Process
 Factors
 Situational
 Unexpected Users
 Influencers
 Ethical
 Decision-Making Unit of a Buying Organization is Called Its Buying Center.
 Deciders Roles
 Include Attitudes of Others
 Approvers Buyers
 Gatekeepers
 Marketing for Hospitality and Tourism

43. MAJOR INFLUENCES ON ORGANIZATIONAL BUYERS
Several factors affect organizational buying decision. They
can be grouped in environmental, organizational,
interpersonal and personal factors. They are shown as
follows:
Environmental Factors
Organizational Factors
Interpersonal Factors
Personal Factors

44. Environmental Factors
Environment factors affect organizational buying behavior. This includes economic, technological,
political-legal, social responsibility and competition.
 Economic factors: Economic factors affect organizational buying behavior. This includes level of
demand and economic health. The level of demand includes capacity and desire for buying goods.
This is affected by income distribution and price of product. Prosperity, recession and recovery are
included in economic health. The prosperity condition is economically good condition. Recession is
economically bad condition.
 Technological factors: Technological factors also affect organizational behavior. This includes level
of technology, pace of technology, technology transfer etc. E-commerce as well as information
technology has got revolutionary change. It has directly affected organizational buying behavior.
 Political and legal factors: Political and legal factors also affect organizational buying process
directly. Political factors include political system, political situation, and political thought, government
policies etc. whereas constitution, laws, rules and regulations etc. are included in legal factors.
 Social responsibility: A business organization should consider social responsibility while buying
any goods or services. Indigenous goods should be given preference in buying and interest of
society should be protected. Interest of different pressure group of the society also should be
considered while buying goods or services.
 Competition: Competition also affects buying behavior. This competition includes pure competition,
monopolistic competition and oligopoly competition.

45. Organizational Factors
Organizational factors also affect organizational buying behavior. This includes objectives, policies, procedures,
organizational structure and system.
 Objectives: Buying objective is determined according to organizational goal. Goods should be purchased according to
organizational objective. As goods or services need to be purchased according to organizational goal, buying is affected
by objective.
 Policies: Purchasing or buying policy also effects organizational buying behavior. Goods should be purchased
according to buying policy of the organization. If the organization has the policy of buying indigenous goods, the buyer
cannot buy foreign goods. If the purchasing policy is silent in this matter, whichever goods, foreign or indigenous, can be
purchased as desired.
 Procedures: The methods and process adopted by an organization to buy goods or services is called procedure. Goods
or services can be purchased directly through agreement, or through tender, demanding catalogue etc. Any of the
method can be adopted to buy goods or services. Whichever procedure the organization has adopted, the buyer should
follow it.
 Organizational structure: Organizational structure defines authority and relations which directly affects buying
behavior. In some organizations, goods or services are purchased by direct order of chief executive while in some other
organizations, goods or services are bought through purchase department. So, buying behavior is affected by
organizational structure.
 System: Purchasing system also directly affects buying behavior. An organization can adopt any one or more such as
centralized system, decentralized system, huge quantity purchase system and others.

46. Interpersonal Factors
Interpersonal factors also affect buying behavior. This includes authority, status, interest
etc.
 Authority: The personnel whom the organizational structure gives authority to order
for purchase, no goods can be purchased without his order. Buying decision of such
authority plays an important role in buying.
 Status: The persons to purchase goods or services and to give order for purchase may
be different in an organization. As much the behavior of the person issuing purchase
order affects behavior of the buyer. If the status or level of the buyer is high, his buying
decision becomes rational and quick. His/her behavior becomes mature.
 Interest: Users, influencers, buyers, decider and gate keeper are involved in
organizational buying process. Their interest affects organizational buying process. As
their interest becomes different, buying process may be complicated.

47. Personal Factors
Personal factors also affect buying behavior. This includes age of person, education, level of job,
personality etc.
 Age: Age of person also affects selection and priority. Younger persons make buying decision and
supplier selection quicker than older aged persons. Similarly, the younger persons try to find new
suppliers whereas older persons try to give continuation to the same who is supplying. So this also
affects buying process.
 Education: Education makes person able to analyze good or bad. So, an educated person takes
buying decision rationally whereas uneducated person makes buying decision at hit and miss/ or
hunch. Educated person selects goods or services carefully. So, buyer’s education also affects
organizational buying behavior.
 Job position: Job position also shows a person’s status. Buyer’s position or status also affects his
buying behavior. Buyer’s status may be low or high.
 Personality: Personality of person working in an organization may be different. Personality affects
selection of quality, brand, price etc. So, buyer’s personality also affects organizational buying
behavior.
 Risk attitude: Risk bearing capacity of men becomes different. Some can bear more risk and others
like to take less risk. Similarly, some like to avoid risk and some others like to face.

48. Five Types of Business Markets
 Business-to-Consumer Market- A business-to-consumer or "B2C" market is
one in which a business advertises and sells its products directly to individual
consumers. This is the largest type of business market because of its mass
market of customers. Examples include grocery stores, clothing stores and
car dealerships. Franchises, or businesses that sell the rights to operate
branches of their company to others, also fall under the consumer market
category as long as the final buyers are individual consumers. A well-known
consumer market franchise is the chain restaurant.
 Business-to-Business Market- The business-to-business or "B2B" market
has a focus on products, goods and services that are typically sold to other
businesses rather than direct to consumers. Examples include office furniture,
corporate accounting services and conference and exhibit supplies. Many
business-to-business markets have some overlap with consumer markets, for
example, a cleaning company may provide both residential and commercial
services.

49.  Services Market- In a service market, a business sells services rather than products. The business might
deal exclusively with consumers, for example, providing telephone services, plumbing and electrical work
to the consumer market. Or, it could be a B2B services firm, selling business accounting or consultancy
services, for example. In some instances a consumer product may be sold in conjunction with the service.
An example is a hair salon that provides the service of cutting hair, but also sells shampoo and other
personal care products.
 Industrial Market- Industrial markets sell industrial or production products, good and services to other
business industries. These are often goods that are not marketed to consumers, such as raw materials like
steel, glass and wood or large-scale goods such as multi-network computer systems. Industrial markets
have a much smaller target audience than other markets because the products and services it supplies are
not focused on a mass market.
 Professional Services Market- Professional services are those categorized as specialized areas of
business that typically come with a degree of accountability in terms of licensing and certification.
Examples include legal and medical services.
o Group Business Market
 Corporate Meetings
 Association Meetings
 S.M.E.R.F Meetings (Social, military/government, education, religious, and fraternal).
 Each of these three major categories has several different types of meetings within each category ranging
from large to small.

50. Types of Meeting Planners
Generally, there are three categories of "Meeting Planners:“
 Organizational Employee - Meeting Planners
 "Intermediary" Employee - Meeting Planners
 Independent or Owner/Operator - Meeting Planners
1. Organizational Employee - Meeting Planners: These organizations are the
"primary" groups of people who actually meet. The meeting planners work full or part-
time for one of the following types of organizations. People who work for these
organizations and plan meetings can be formally titled "Meeting Planner" or their main
jobs may be in management or assistant to management and only periodically become
involved in planning meetings.
 Corporations
 Associations
 SMERF

51. 2. "Intermediary" Employee - Meeting Planners: Intermediaries are
companies that are not the primary meeting organization (as listed above) but
are firms in the business of helping those primary organizations to plan
meetings. In effect, intermediaries are firms "in between" Supply and Demand.
They "link" supply and demand. These intermediaries employ "meeting
planners." Some examples"
 Travel Agencies
 Incentive Travel Houses
 Destination Management Companies (DMCs)
3. Independent or Owner/Operator - Meeting Planners: These are
independent firms who have as clients various organizations (as listed in #1
above). Generally, these meeting planners are entrepreneurs who in the past had
gained meeting planning experience "working for someone else". They decided
to go in business for themselves. It's important for salespeople to understand
that the primary meeting organization is the customer, but they have the choice
of "planning" their meetings using different types of "meeting planners."

52. Types of Organizational Meetings and Main Characteristics
o Corporate Meetings- Are generally the most desired because of
the following characteristics:-
 One master bill for the entire meeting.
 Attendance is mandatory, thus contracted rooms will “pick-up” as
contracted.
 Smaller number of decision-makers, thus the salesperson needs only
to influence a few key people.
 High tendency to repeat the meeting at the same facility if satisfied.
 Meeting planners are very sophisticated.

53. Associations
Are the second most desired? However, associations range from the American
Medical Association to the Society of Poodle Groomers and almost any other
type of association of people with common interests. Some characteristics:
 Small Master Bill and many individual “folios”
 Attendance is voluntary, thus a wide variation in contracted numbers and
those that show up (some associations are very good at predicting their
numbers)
 Decisions are made by committee: The paid executive director seeks out the
city and hotels and then asks the board of directors to vote on the final
selection.
 Pattern of meetings are a rotational basis around the country. Usually, East
coast one year, mid US next year, and then West coast. Thus, repeat business
doesn’t occur as readily as with corporations.
 Sophistication of meeting planners ranges widely.

54. ThankYou All