The term market contains various meanings (Stanton, et al., 1994). Some define it as a meeting place between sellers and buyers, goods or services offered for sale, and the transfer of ownership. In addition there is also a definition that states that the market is a request made by a group of potential buyers of an item or service.
These notions are still general in nature and are usually viewed from an economic point of view. While a more specific understanding and from the marketing point of view is that the market consists of all potential customers who have certain needs or desires that may be willing and able to involve themselves in the exchange process to satisfy those needs or desires.
Before planning a marketing program, companies need to identify who their target customers are and what their decision process is. although many purchasing decisions involve only one decision maker, other decisions may involve several people, who play the role of initiator, influencer, decider, buyer, and user .
The level of market demand facing a company is not always constant, but there are eight kinds of possible levels of market demand. For certain marketing tasks are needed to manage it
Meanwhile, the organizational market or often also referred to as the intermediate market (producer market) consists of organizations, industrial users, traders, government, and non-profit institutions whose purpose of purchase is to be processed further until it becomes the final product, resale, leased or supplied to other parties, both in the interests of profit or to improve the welfare of its members.
The main characteristics of the business market that distinguish it from the consumer market include:
1. The number of buyers is less than the consumer market.
2. The purchase volume is generally far greater than the consumer market.
3. The relationship between suppliers and customers is closer and closer.
4. Buyers are usually geographically focused, for example in industrial areas, shops in the center of the crowd, and so on.
5. The request is derived request (derived demand).
6. The demand is not elastic (not many are affected by price changes).
7. Demand is volatile, especially for new plants and equipment.
8. Purchases are made professionally by trained purchasing agents.
9. People who influence business market purchasing decisions are generally more numerous than the consumer market.
10. Other features, including purchases are often made directly from factories not infrequently the purchase is reciprocal (meaning suppliers also buy from them), and many industrial buyers make leases on their equipment rather than buying it.
As in the consumer market, there are also various roles that each member of the organization can play in the purchasing decision process.
These roles include (Kotler, et al., 1996; Lamb, et al., 1994).
1. Users (users), namely those who will use goods or services. In many cases, users initiate purchase proposals and help determine product specifications
2. Influencers (influencers), namely people who influence purchasing decisions. They often help in determining product specifications and also provide information for evaluating alternatives. Technical employees are important influencers.
3. Deciders, namely people who decide the product and / or supplier requirements.
4. Approvers, those who authorise the actions proposed by the decision giver or buyer.
5. Buyers, i.e. those who have official authority to choose suppliers and to arrange the terms of purchase. Buyers can help shape product specifications, but they play a major role in selecting suppliers and negotiating. In more complex purchases, the buyer can consist of top managers who participate in the negotiation process.
6. Gatekeepers, those who have the power to prevent sellers or information from reaching out to members of the purchasing center in the organisation. For example, a purchasing agent's receptionist, and telephone operator can prevent the salesperson from dealing with users or decision makers.
Industrial marketers need to know the following aspects: Who are the main actors in making consumer decisions? In what decisions did they influence? What is the relative level of their influence? What evaluation criteria do each actor use? Industrial marketers also need to understand the main influences of environmental factors (level of demand, economic forecasts, capital costs, level of technological change, political and regulatory developments, and competition development), organizations (objectives, policies, procedures, organizational structures, and systems), interpersonal (authority, position, empathy, and persuasion), and individuals (age, income, education, position, personality, attitude to risk, and culture) in the buying process).
The size of a market depends on the number of buyers in the market. Potential buyers have three main characteristics, namely having interest, income, and access. Based on these three characteristics, there are five levels of market definition, namely:
1. Potential market (potential market), namely a group of consumers who have a certain level of interest in certain market offerings. For example, everyone who expressed interest in buying a motorcycle.
2. Available markets, namely a group of consumers who have an interest, income and access to certain market offers in the motorcycle market. In addition, access barriers are also overcome, meaning that the motorcycle is indeed available in the consumer's territory.
3. Qualified available market, which is a group of consumers who have interests, income, access, and qualifications for certain market offerings. For example the government bans the sale of motorbikes to people who are not yet 17 years old. Thus, even though there are consumers who have interests, purchasing power, and market access, they are not yet 17 years old. Thus, even though there are consumers who have interests, purchasing power, and market access, but are not yet 17 years old, then there is not an available market that meets the requirements /
4. Market served (served market or target market), which is part of the qualified available market that the company wants to enter. For example, a motorcycle manufacturer decides to focus its marketing and distribution on the island of Java, so the island of Java is a market that is served.
5. Penetrated market, which is a group of consumers who have actually bought a product. So what is included in the penetration market are those who really have bought the motorcycle manufacturer.
Understanding the level of market definition above is very useful for marketing planning. If a marketer is not satisfied with his current sales, he can take a number of actions. It can try to attract a greater percentage of buyers from the markets it serves. It can expand available markets by opening distribution in other regions or by lowering prices. In addition, he can also try to expand potential markets by advertising products to consumers who were initially not interested.
Every company has three possible views on marketing strategies in serving its market, namely:
1. Mass Marketing (Undifferentiated Marketing)
This strategy is often referred to as market aggregation or undifferentiated marketing strategies. This strategy is based on the mass market philosophy which considers a market as a large market with similar needs, without individual segments. Therefore, in this strategy the company seeks to meet the needs of all buyers by mass production, mass distribution and mass promotion of a product. So there is only one marketing mix that is used to serve all markets.
The mass marketing strategy aims to increase efficiency and economies of scale, so that costs and prices are low and can reach as many potential buyers as possible. But there is also a problem, namely ignoring differences in consumer tastes and the possibility of changing their preferences which can cause a decrease in sales (can even threaten business continuity). This strategy is used by companies that produce standard goods (such as agricultural products, gasoline, salt, sugar) and lean services (for example grass cutting, house painting, electrical equipment repair shops). A mass marketing strategy can also be applied to some products that may not be considered standard by the market, such as beer, coffee, cigarettes, and household cleaning agents.
To support the success of this strategy there are several key requirements that must be met, namely:
a. There must be a large number of people who have the same basic (homogeneous) needs or wants.
b. Consumers feel that the products of each company are no different, or only small.
c. Companies must be able to design a marketing mix that can satisfy all kinds of prospective customers.
A classic example of a company implementing this strategy is Ford with a Model T car product that only manufactures black cars with the "You can have car in any color you want, as long as it’s black" advertising campaign.
In this strategy, the company tries to produce several products that have different characteristics, such as quality, size, model, color, or its characteristics. This strategy emphasizes providing various kinds of products to buyers rather than trying to attract different market segments. The rationale for this strategy is that customers have individual tastes, and those tastes change all the time. Therefore customers need variety and change; the company seeks to offer as many products as possible that can meet all these variations. An example of this strategy application is General Motors with some of its products named Pontiac, Buick, Cadillac, and Oldsmobile. All three brands are actually the same and differ only in certain models and features.
3. Target Marketing
In target marketing, the company segmentes the market, then selects one or more segments that are considered the most potential and profitable, and develops marketing products and programs specifically designed for those selected segments.
There are two types of strategies to choose from, namely concentrating on a single segment (concentrated marketing) and multisegment marketing. If the company chooses a single segment, it is expected that the company can better understand the needs, motivations and satisfaction of each member of the segment. This understanding will be very helpful in developing and implementing
a highly specialized marketing mix. However, big risks are also ready to block the implementation of this strategy. Concentrated marketing does not allow the spread of marketing risk. Therefore, if there is a decrease in the purchasing power of selected market segments, a change in taste, or more competitors enter the industry, the company's profitability will decline. In general, this strategy is more widely used in marketing industrial products. However, there are also many applications in marketing consumer products. Examples of companies that implement this strategy are Harley-Davidson concentrating only on the "big" motorcycle market. Another example is the Porsche manufacturer that concentrates on the high-end (very high-income) automotive market.
Another type is multisegment marketing, where companies choose two or more market segments and compile a separate marketing mix for each of these segments. This strategy can provide several potential benefits, such as sales volume, profits, and greater market share, and economies of scale in manufacturing and marketing. Nevertheless, there are also risks and costs, including product design costs (packaging, labels, product size, product characteristics, etc.), production costs, promotional costs, inventory costs, marketing research costs, handling / management costs (especially time extra management to coordinate), and the possibility of cannibalization. Examples of companies that implement this strategy are several jeans manufacturers such as Lee, Levi’s, and Wrangler who serve several market segments (remember: not all segments) are based on age, gender, and ethnicity)
Kotler, P. (1994), Marketing Management: Analysis, Planning, Implementation, and Control, 8th ed. Englewood Cliffs, N.J. : Prentice-Hall International, Inc