Solomon et al (2006) states that consumer behavior ‘is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires’. Schiffman & Kanuk (2008) define consumer behavior as ‘the behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs’.
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To learn about consumers, the company need to fully understand their requirements, as this improves the chances of creating a successful marketing strategy. Business to Business – Industrial Marketing A business market is described as ‘a market for products and services, local to international and bought by businesses’ (Hutt & Speh, 2008) Further Business to Business (B2B) Marketing and Consumer Marketing offer a magnitude of differences to the market place. B2B marketing can be distinguished by the ‘intended use of products and the intended consumer.
(Hutt & Speh, 2008) Therefore the characteristics of consumers varies from the consumer market. Factors including demand, buyer behavior and environmental influences such as the economy differentiate the markets. The industrial market can be highly specialised targeting niche markets in difficult circumstances. Hutt & Speh (2008) identify that the nature of industrial markets poses ‘unique challenges and opportunities’ for companies. The theory continues around the subject of ‘demand’, demonstrating key characteristics and considerations of a marketing strategy.
These include derived demand, fluctuating demand, stimulating demand and demand elasticity. The need to identify markets, monitor changes and nurture growth is crucial to the success of the strategy. Frameworks such as Porter’s Five Forces Analysis (Porter, 1979) assists in identifying the attractiveness of a B2B market in terms of potential entrants, substitutes and the powers of suppliers and buyers, therefore assessing the complexity of the market and potential threats. The European Perspective
Europe is one of the worlds largest trading domains and this is an imperative factor of the UK’s growth in such markets. Following an article produced by Civitas (2012) the Single European Market describes the EU project as a method to ‘create free trade within the EU and to mould Europe into a single economy’. The European Markets account for a large percentage of the UK’s overall export of goods and services. The reduction of trade barriers between the E. U and UK has ultimately created more potential for trade opportunities and access to larger markets.
Growth within the E. U is important to the UK economy, especially in the current climate and fiscal constraints. According to Hutt & Speh (2008) the ‘demand for industrial good and services is growing more rapidly in many foreign countries’. This provides positive connotations for the proposal of growth in to the European market for Fairhurst Stone. The opportunities for growth will ultimately develop the competitiveness of the European markets globally. Product Purchasing
The continued focus on ethical trading over recent years has seen the introduction of a branded logo, encouraged by Euroroc, a federation that believes ‘a common European standpoint is needed. The product needs a face. The consumer has to be sure that he gets real stone, competence in quality, and knowledge about the stone’ (Euroroc, 2012). Due to the current European economic situation, Bonney (cited in the Journal of Commerce, 2012) suggests that ‘trade volumes will remain on the decline as import growth rates are in negative territory and exports have been flat for some time’.
In respect to the stone industry, Hutt & Speh (2008) observe that ‘raw materials are processed only to a level required for economic handling and transport and enter the buying organisations production process in their natural state’. According to Johnson, Whittington & Scholes (2011) ‘the relative importance of product innovation and process innovation changes over time’ indicating that businesses need to remain vigilant of markets and environmental factors affecting the objectives of the marketing strategies. Competitor Analysis
The Confederation of British Industry (2010) assessed the effects of the macro & micro environments in relation to the Natural Stone industry and the challenges faced with regard to entry in to the European Markets; paying specific attention to the affects of competition from Developing Countries. ‘Developing Countries are challenging the margins, due to their competitive prices’ (CBI Report, 2010:8) However in response to this, the UK stone industry offers a good quality product and is ‘dropping prices, assuring high quality, durability & elegant appearance’ (CBI Report, 2010:8)
In contradiction to the CBI report (2010), Bonney (2012) also indicates that markets in developing countries will not pose as big a threat as originally anticipated. External issues relating to trade in the EU Markets, specifically in Developing Countries include ‘health and safety, discrimination, and child labour’ (CBI 2010:10). In a study by the Employment Policy Primer (2008) it is stated that ‘an increase in exports and loss of protection, is forcing firms to attempt to reduce costs by worsening work conditions (for employees) in developing countries’.
The earlier works of Prahalad & Hamel (1990) state that ‘resources, capabilities and competences are critical in acquiring and sustaining competitive advantage’. This theory remains relevant but does not take in to consideration the recent emphasis on technological progression. Marketing Strategy Haliburton & Hunerberg (2004) reviewed the strategic marketing issues facing Europe concentrating primarily on the development of the internet and the ‘Glocal’ phenomena – global versus local marketing. Think globally, act locally.
Halliburton & Hunerberg (as cited in Kaynak and Jallat, 2004) state that ‘a major factor has been the development of the internet as a new business model as well as a communication medium’. In this report, they elaborate on their earlier theories posing the question ‘is Pan European Marketing a question of Myth or Reality’ (1993) but readdress the ‘relevance or irrelevance’ of this strategy (2004). Halliburton et al (2008) propose that companies with the same internal resources ‘can act very differently depending on local market conditions’. This corroborates Halliburton’s earlier study on the Pan European / Glocal marketing theory.
Stuart-Kregor (ND) suggests that the Pan European strategy is ‘not necessarily looking at a single strategy for all; but a necessity and a reality – doing it well is the challenge’. He continues with some ambiguity ‘it is not clear if it is beneficial to European marketing’. According to William Kennard of European Voice (2012), there are currently ‘too many barriers to market entrants, innovation and growth. Matters could be made worse if member states erect new national barriers in response to emerging technologies and business models, such as nanotechnology and cloud computing’.
Earlier works by Root (1966, as cited in Stone & McCall, 2004) identified the expansion of trade in to Europe using a model outlining the strategy planning process. The three stages included ‘identifying market opportunities, developing the export marketing strategy and implementing the strategy’. This basic model has since been developed to a further degree of complexity by various academics, ‘Porter’s Diamond’(1998) as one example (as cited in Johnson, Whittington & Scholes, 2011:270) & ‘The McKinsey 7S Framework’ (c1980) as a second (as cited in The Global Management Journal, 2011).
Methodology The contents of the literature review has covered an extensive range of existing theory, including the views of respected theorists, academic journals and industry professionals. The areas covered include buyer behavior, more specifically industrial consumers (B2B) and marketing strategy. The contents of the methodology identifies the types of research required to carry out the work based project and the methods used to collect data. The limitations of the research including ethical considerations and reliability of the data collected will also be addressed.