Industry Forecasting

Keep in mind that buyer behavior and the buyer decision making process are affected by economic, psychological, and socio-cultural factors. Analyzing and evaluating buyer behavior helps marketing managers better understand the influence of these factors in decision-making situations. Another important topic is ethical behavior in marketing. This certainly influences the perceived integrity of the organization, as a whole. Finally, forecasting influences marketing decisions and is an important part of the marketing process.

Influencing Buyer Behavior

In today’s dynamic and complex business environment, marketing managers are constantly exploring ways to ensure a solid buyer-seller relationship is maintained. Organizations that have developed a dedicated and loyal customer base tend to increase their market share, maintain a competitive advantage, and reduce costs related to finding new customers (Kotler, 2000).  

Newell, Belonax, McCardle, & Plank (2011) conducted research related to the seller’s use of consultative task behaviors and personal relationship behaviors. Consultative task behaviors are collaborative discussions where the seller works with the buyer attempting to satisfy the customer’s unmet need (Liu & Leach, 2001). Personal relationship behaviors involve developing a more personalized and individual relationship beyond the business-related activity (Gremler & Gwinner, 2008). The research results “…confirmed the importance of both the analytical/business problem-solving skills (consultative behaviors) and the more affective/interpersonal communication skills (relationship behaviors) in developing long-lasting business partnerships” (Newell, Belonax, McCardle, & Plank, 2011, p. 314).

The pharmaceutical sales industry is a little different from many other selling situations in that the sales representative does not sell the pharmaceutical product to the ultimate consumer of the product. Sales teams sell the features and benefits of a specific pharmaceutical product to a physician or other health care personnel. The ultimate consumer of the product is the patient. The sales representative must understand the physician’s therapeutic goals, the patient types within the physician’s practice, and then, deliver a balanced presentation including the product’s indications and side effects so that the physician could ultimately decide whether or not the drug would find a place in his or her prescribing armamentarium. By building a personal relationship with the health care provider, the sales representative gains a better understanding of the needs and concerns the physician may have. The sales representative must also develop a high level of expertise regarding medical, technical, and legal issues. The combined expertise and relationship level builds trust that leads to collaborative problem-solving to satisfy the needs of the physician’s patients.

Ethics and Seller/Buyer Behavior

Ethical behavior in the business setting continues to be a hot topic – especially when scandals involving organizations have made headline news throughout the years (Enron, Tyco, etc.). From a marketing perspective, Inks, Avila, and Chapman (2004) conducted an interesting study regarding the ethical perceptions of buyers and sellers. The examined study variables were: confidential information, gift-giving, deceit, and use of power. Not surprisingly, the study results showed that within the buyer/seller relationship, buyers tend to be more aware of unethical behavior and sellers do not realize the extent of impact unethical behaviors have on the buyer/seller relationship.

Market Forecasting

“With globalization, rapid information flows, and seismic economic shocks buffeting their markets, it is essential that marketers learn to adapt to a dramatic increase in the level of uncertainty” (Day, Howland, & Parayre, 2009, p. 13). Market research plays a pivotal role in forecasting the unknown. The more relevant information garnered, the better able marketing managers will be able to determine new opportunities and address possible challenges (Nickels, McHugh, & McHugh, 2012). Marketing departments may use numerous sources to uncover customer needs or determine customer preferences. A few examples are interviews, focus groups, surveys, and observations. There are also more involved techniques using market analysis and quantitative methods.

Bateman and Snell (2012) provide five tips to keep in mind when using forecasts: (1) do not depend on one type of forecast. Use multiple techniques to gain a better understanding of wants, needs, etc.; (2) short-term forecasting tends to be more accurate. Predicting too far into the future lessens the accuracy of the forecast; (3) the GIGO (garbage in, garbage out) axiom applies here. Forecasts are only as good as the collected data; (4) Use the simplest forecasting techniques possible. Gaining useful information does not require complex tools; and (5) Realize that many times forecasting does not take into account unexpected events and occurrences and those will affect the validity of the forecasted information.

References

Bateman, T. S., & Snell, S. A. (2012). Management: Leading and collaborating on a competitive world (9th ed.). New York, NY: McGraw-Hill Irwin.

Day, G. S., Howland, S., Parayre, R. (2009, September/October). Looking into marketing’s future: Marketers should embrace the future, and prepare for its uncertainties. Marketing Management, 12-17.

Gremler, D. D., & Gwinner, K. P. (2000). Customer–employee rapport in service relationships. Journal of Service Research, 3(1), 82–104.

Inks, S., Avila, R., & Chapman, J. (2004, Spring). A comparison of buyers’ and sellers’ perceptions of ethical behaviors within the buyer-seller dyad. Marketing Management Journal, 14(1), 117-128.

Kotler, P. (2000). Marketing management (millennium ed.). Upper Saddle River, NJ: Prentice Hall.

Liu, A. H., &. Leach, M. P. (2001, Spring). Developing loyal customers with a value-adding sales force: Examining customer satisfaction and the perceived credibility of consultative salespeople. Journal of Personal Selling & Sales Management, 21(2), 147–156.

Newell, S. J., Belonax, J. J., McCardle, M. W., & Plank, R. E. (2011, Summer). The effect of personal relationship and consultative task behaviors on buyer perceptions of salesperson trust, expertise, and loyalty. Journal of Marketing Theory and Practice, 19(3), 307-316.

Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2012). Business: Connecting principles to practice. New York, NY: McGraw-Hill Irwin.