to do business profitably. Once up-and-running, the dialogue expands to include a listening mode.
For businesses where the buying cycle is fairly short, sales (e.g. fast moving consumer goods, package holidays, pop concerts etc) are a quick indi- cator as to how well the marketing mix is working. Sales can also be made to build database information that will enable the company to see who is buying, what they are buying, when they buy, and perhaps even enable database marketing to be used to target these customers again.
Research can be carried out via database strategies to discover which customers are not as responsive as the rest and what can be done about it. Where the market place has a long buying cycle (e.g. new cars, indus- trial plant and/or equipment, legal advice etc) then it will be a while before any given marketing mix will have an effect. In cases such as these, where it can take a long time between the customer or prospect (i.e. potential customers) hearing about a product and buying it, the business must monitor how successfully the mix is at moving prospects toward the sale (see the D.A.G.M.A.R model, Chapter 4). This is done via the Customer Information System (CIS) which will comprise an appropriate range of tools (such as customer satisfaction questionnaires, loyalty measures derived from the database etc.) to keep the marketer in the picture about how well the marketing mix is working, and to avoid discovering in a couple of years time that it was not right and as a result the customer has purchased elsewhere. (We cover this in more detail in Chapter 7, Getting the feedback.)
FIGURE 2.3: MASLOW’S HIERARCHY OF NEEDS
As a general synopsis: the proposition is that a person’s motivation (in this case to buy) starts with the most fundamental needs which deter- mine survival. These are the most potent, and only when they are satisfied, can the person start to address the higher order needs.
To explain:
‘Physiological needs’are those which ensure that the person can stay alive: food to eat, water to drink, the right temperature range to live in, enough air to breath etc. Absence of any of these will ensure the person’s demise. Threaten this and the person is motivated to remove that threat, e.g. they work to get money for food, they move to where water can be found, they wrap up well in the cold, they seek shade in the heat of the desert etc.
‘Safety and security’needs are those which emanate from threats, or potential threats from the surroundings, such as theft, assault, attack
Self actualization
Esteem and status
Belonging and love
Safety and security
Physiological needs
by wild animals or people, tornadoes in the plain states of the USA. These threats will motivate people to support their local ‘neighbourhood watch scheme’, ask for more police on the block, fit their homes with locks, stay in their cars when driving through safari parks, not go down town alone and on foot after dark, carry a personal alarm or mobile phone, build tornado shelters in or under their homes etc.
‘Belonging needs’ are to do with the fact that the human race is a gregar- ious species and will normally suffer stress if alone for long periods (solitary confinement is a punishment). Once we are well fed and safe from attack then we seek the company of others for reasons other than safety in numbers. We are motivated to belong to a group: a family group, work group, occupational groups and clubs. Groups abound. In some cultures this drive can be so strong that people define themselves by their groupings, e.g. where they work, what club they belong to, their old school, their nation etc.
The need for ‘esteem and status’is an expression of the fact that people have a need to be needed. Once they belong to a group they must have a role within that group. It is not sufficient to just belong to a family, a person must have a position (in the hierarchy) within that family, e.g.
mother or father, uncle or aunt, eldest or youngest child etc. The more extended the family, the more important becomes the role a person may occupy. The same thing happens with clubs, such positions as club treas- urer, secretary, chairperson, etc. confer status and importance, and are sought out and contested during elections. This is what is referred to by the phrase ‘the pecking order’.
‘Self actualization’is about a person making their own statement, to attempt to leave their mark on the world – in the extreme – to be a great artist, writer, scientist, round the world sailor etc. Most people will get their self-fulfilment from more mundane, but to them still very impor- tant things, such as gardening, DIY, model making, dress making, being an entrepreneur starting and running their own successful business, making lots of money etc (not for the wealth so much as for the state- ment that this will make about them, to themselves).
For any motivation to have sway, all the others lower in the hierarchy must be securely satisfied, in-place, forming a sound foundation on which
to build. If any of the underlying needs are threatened then the super- structure comes tumbling down. It is difficult to imagine Mozart being able to compose Eine Kleine Nachtmusik whilst being pursued alone in winter through the primeval forest by a sabre toothed tiger, his mind will be on survival – not actualization.
Any product can be viewed as satisfying one or more of these motiva- tions, the more of these that are encompassed then the more the product is secure against swings in the economic climate, for example food and clothing will always have a market, albeit that when times are tough these will be more basic than when there is money about. Markets for fine dining, continental holidays etc will almost certainly suffer in a recession.
In business to business markets
In addition to the Maslow motivations*, organizations have buying motives to do with the success of the business. These are part of a company’s hierarchy of objectives so that:
• to make the desired return on capital,
• costs must be shaved from production,
• that requires a more productive machine,
• which in turn means that the customer has to buy that product.
* It is people who do the buying, and a buying motive in a business could be ‘survival’, i.e. keeping one’s job by not buying a risky proposition. The strap line: ‘no one ever got fired for buying IBM’ illustrates this in action.
These business to business needs can be usefully categorized into one of three classifications:
• those that are ‘mission critical’
• those that are ‘cull test’ issues, important but not critical, and
• those that are nice to have, but not important.
‘Mission critical’needs, if not satisfied will lead to the company failing to achieve some critical part of its business strategy.
‘Cull test’needs are about the basic indispensable requirements. A vendor company’s ability to satisfy these needs will enable them to be included (or not) on the short list of possible suppliers, i.e. the invitation to tender goes out to these companies only. Such needs may include the ability to:
• provide access to finance
• provide training for the buyer’s employees
• deliver when required etc.
‘Nice to have’needs are such aspects of the product as colour, style, designer label etc.
As can be seen, the importance of each of these will depend on the circum- stances of the company, e.g. ‘nice to haves’ may be ‘mission critical’ for some and ‘cull test’ for others.
Whichever type of needs are addressed, it should be remembered that the customer buys to satisfy them via the benefits conferred by the product. These benefits derive from the ‘features’ of the product, e.g.
the road holding of a tyre is conferred by the width, tread pattern and construction of that tyre (i.e. cross ply or radial); the ability to run an accounts package on a PC depends on the speed of the chip, the amount of RAM memory, the resolution of the screen and the size of the hard disk.
Sales people often explain their product’s benefits to the customer by means of the acronym FAB, i.e. Features lead to – Advantages which lead to – Benefits. Nowadays good marketers will grab the attention of their audience by mentioning the benefits first, then explain how these are derived from the features and advantages of the product, e.g. ‘live an active old age’ – via the benefits conferred by a daily pill replete with lots of vitamins and minerals and ‘ginkgo bolover’.
Activity No. 2
The following is part one of the exercise for this chapter, we will start it now and complete it after the next section. This can be done for consumer or business to business markets. To do this exercise you will have to think of a typical important customer for your business.
The rows in Figure 2.4 have been labelled to indicate their importance.
For ‘mission critical’
What are the two or three issues which are indispensable if your customer is to derive what they want from your product and thus reach their goal/s?
For ‘cull test’
What are the minimum two or three essentials you need to have for the customer to even look at you?
For ‘nice to haves’
What are the extras which are not critical for the customer to achieve their aims? They probably would not pay more to have them, but like bundled software for a PC, may well increase the customer’s percep- tion of value obtained.
Write these issues in their respective rows before moving on to the next section of this chapter:
FIGURE 2.4: CATEGORIZE YOUR CUSTOMERS’ NEEDS
The main issue of this exercise is to discover how well you know your customers’ needs, particularly for the ‘mission critical’ and ‘cull test’
aspects. Do you really know them? How do you know you know? Is this based on sound information or have you only guessed at them?
Perhaps this will prompt you to do some real investigation into your customers’ motives for buying.