Fundamentals of

marketing
 CONTENTS
CHAPTER 1
INTRODUCTION TO MARKETING
1.1 Marketing, A Complex Social And Economic Concept
1.2. The Evolution Of Marketing – Emergence And Development
1.2.1. Conditions For The Emergence, Development And Promotion Of
Marketing
1.2.2. Stages In The Evolution Of Marketing Theory And Practice
1.3. Marketing Functions
1.4. Marketing Universality; Considerations On Marketing Specialization
1.5. Marketing In Non-Economic Domains
1.6. Marketing Institutions And Bodies
CHAPTER 2
THE COMPANY’S MARKETING ENVIRONMENT
2.1. The Company’s External Environment
2.2. Components Making Up The Company’s External Environment
2.2.1. The Company Micro-Environment
2.2.2. The Company’s Macro-Environment
2.3. Considerations On The Company’s External Environment
CHAPTER 3
ANALYZING COMPANY’S MARKET: SIZE, EVOLUTION AND
INDICATORS
3.1. The Content, Scope And Profile Of The Company’s Market
3.2. The Size And Evolution Factors Of The Company’s Market
3.3. The Company’s Relationships With The Outside Environment
3.3.1. The Company’s Market Relationships
3.4. Means Of Company Market Expansion
CHAPTER 4
MANAGING THE MARKETING INFORMATION SYSTEM
4.1. The Marketing Information System
4.1.1. Concept And Components Of A Marketing Information System
4.1.2. Information – Key Resource In The Current Business Environment
4.2 Sources Of Data In Marketing
4.2.1. The Concept Of Source Of Data
4.2.2. Classification Criteria Of The Sources Of Data
CHAPTER 5
CONSUMER BEHAVIOR
5.1 Defining Consumer Behavior
5.2. Factors Which Influence The Consumer’s Behavior
5.2.1.Personal Factors
5.2.2. Social Factors

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 5.2.3. Cultural Factors
5.2.4. Psychological Factors
5.3. Stages Of The Purchase Process
5.4. Global Models Regarding Consumer’s Behavior
5.5. Organizational Purchase Behavior

BIBLIOGRAPHY

3
 CHAPTER 1

INTRODUCTION TO MARKETING

1.1. Marketing, a complex social and economic concept

A short trip in the history of marketing shoes that a series of actions have
appeared and started to be used in practice long before the existence of the
denomination that comprises them nowadays. Important theoretical concerns do
not appear earlier than the second half of the 20th century, yet significantly
develop in terms of intensity and field of study.
The concept of marketing is the result of a long process of summarizing,
delimiting and clarifying marketing principles and functions, its very place in the
life of companies and society.
The term “marketing”, of an Anglo-Saxon origin (from the verb “to market”
= to make market transactions, to buy and sell), first appeared in 1902 in the
University of Michigan Newsletter, where the following phrasing is used in order
to describe the subject of a university course on product distribution: “... various
methods of product marketing”. 1
Other designations can also be currently encountered, among which:
• The Anglo-American market-marketer, designating a broker-dealer,
constantly buying and selling share and thus creating a market for them.
• The term “merchandising” mostly refers to sales and includes here all
activities likely to boost sales in retail outlets. 2
Theoretical concerns have so far be geared towards establishing and
explaining the sense of the concept, as well as towards improving the theoretical
and methodological foundation underlying the marketing practice.
The concept of marketing has received a significant number of definitions,
due to the various meanings the term has been assigned throughout the fast
evolution of this field of activity.
It is worth mentioning that all marketing definitions are an outcome of
market practices development, but also their reflection on the plane of ideas; this
is since they can serve as guideline in the study of marketing theory whose
process is fully developing as we speak.
It is deemed that definitions dating back to the early 20th century
characterize the “old” concept of; a serious revision of the concept occurs in the
second half of the century, giving way to a whole range of new definitions of the
“new” marketing concept.
The first definition of the marketing concept was formulated by the

1
Pop N.Al. – Marketing, Editura Didactică şi Pedagogică, Bucureşti, 1996, p. 6.
2
Bussines Club, 1998, p. 118.

4
American Marketing Association (established in 1937): “performing an economic
activity directing the flow of goods and services from the manufacturer to the
consumer or user”.
According to this definition, marketing is deemed an economic concept,
involving a certain approach to economic processes and the respective concept is
an outcome of practical activity, of economic reality.
Subsequently, this definition has been corrected and amended by renowned
academics, such as Philip Kotler, W.J. Stanton, A. Denner, E. Kelly. Thus, W.J.
Stanton defines marketing as “a whole system of economic activities pertaining to
programming, pricing, promoting and distributing goods and services aimed at
meeting the requirements of existing and potential consumers”.
A. Denner believes that marketing “comprises the ongoing analysis of
demand, on the one hand, and on the other, establishing an setting in motion the
means to satisfy it, while securing the best profit”.
In Robert Bartels’ view, marketing “is the process whereby society, in order
to meet its consumption needs, sets up distribution systems made up of
participants who, interacting free of technical (economic) and ethical (social)
constraints, perform transactions or flows triggering market division, leading to
exchanges and consumption”.
Yet one of the definitions marketers often use is given by Philip Kotler:
“Marketing is the set of human activities directed at facilitating and
consummating exchanges”.
The definition given by Ph. Kotler comprises the following basic concepts:
needs, wants and demands, products, value, cost and satisfaction, exchanges,
transactions and relations, markets. 1

Needs, wants,
demands

Market Products

Exchanges, Value and

transactions, satisfaction
relations

Graph. 1.1. Basic concepts in Ph. Kotler’s marketing definition

Source: Ph. Kotler – Managementul marketingului, Teora publishing House, Bucharest, 1997, p. 35

The interpretation of these concepts leads to the following explanations:

1
Kotler Ph. – Managementul marketingului, Editura Teora, Bucureşti, 1997, p. 35.

5
 Needs. According to this definition, the marketing relies on people’s needs
and wants. They need food, water, air, clothing and shelter in order to survive.
Moreover, they want to enjoy themselves, learn, while having well-defined
preference for certain brands or services. Human Need represents being aware of a
feeling of lacking.
In enumerating basic components, Ph. Kotler takes as his starting point
human needs as seen by Abraham Maslow, who suggest that every individual is
motivated by a series of needs varying from fundamental needs, applying to
everyone, to specific needs for each individual. 1
People need to satisfy their needs one by one, starting with basic ones. Thus,
in subsistence economies, a large part of the population will attempt to satisfy
their basic needs – food, water, shelter, heating, then universal needs, easy to
identify and anticipate, yet it is more difficult to do the same with complex human
needs.
Wants represent the form of human needs manifestation as they are shaped
by the individual’s culture and personality. Although needs are few, an
individual’s wants are numerous and constantly shaped by social forces and
institutions, such as family, school, church and others.
Demand represents the desire to have a certain product, doubled by the
capacity to pay for it and by the purchase power. Wants turn into demands when
they supported by purchase power. Companies need to know not only how many
people want their products but especially how many people are willing and able to
buy them.
Product is defined as any item (good) that van be offered on the market in
order to meet a need or want. The importance of material goods resides not only
in merely possessing them but, more significantly, in the services they provide. A
marketer’s task comprises more than merely presenting the physical characteristic
of a product, it also goes as far as selling the advantages or services that the
respective product entails. Those focusing on the material good at the expense of
customer needs are said to suffer from “marketing short-sightedness”. 2
Value is the best advantage a product offers in relation with the paid price.
Exchange refers to the act of obtaining a wanted item from someone, by
offering another item in its stead. Marketing is born when people decide to satisfy
needs and wants through exchanges.
Transaction resides in the exchange of value between two parties. If the
exchange is a fundamental concept of marketing, then transaction is its measure unit.
Relationship marketing represents setting up long-lasting relationships by
marketers with customers, distributors, intermediaries and valuable suppliers.
Marketing focus thus changes from maximizing profit per each individual

1
Kotler Ph. – Managementul marketingului, Editura Teora; Bucureşti, 1997, p. 37.
2
Kotler Ph. – Managementul marketingului, Editura Teora, Bucureşti, 1997, p. 47.

6
transaction to maximizing the mutually-beneficial relation with consumers and
other parties.
The concept of transaction immediately leads to the concept of market, The
market is the overall set of actual and potential buyers of a product.
The Romanian school of marketing has its own perspective on the concept
of marketing, with a focus on the following:
Marketing represents a coherent set of methods and techniques aiming at
gaining knowledge about the economic and social requirements of the society, the
organization and course of the economic and social processes, with a view to
meeting them in a timely manner and with a maximum of efficiency. 1
The Romanian Marketing Association (founded in 1971) provided an
adequate definition, according to which “marketing is a complex, cybernetic
system of activities and actions which, based on a set of specific techniques and
methods taken over from other sciences or devised on its own, aims at creating
the best balance between the economic resources and the market demands over a
certain period of time”.
Therefore, marketing represents a new perspective, a new conception on the
orientation, organization and development of the economic and social activities.
According to this conception, all activities must be aimed at meeting the actual
and the potential requirements of the society.
Considering the multiple definitions of marketing, author Keith Croiser,
quoted by Baker M.J., grouped them into three main categories:
• Definitions which consider marketing to be a process taking place
through the marketing channel and which connects the producing
company to the related market
The very notion of concentrated marketing refers to the concentration of all
efforts for the study and the gaining of a portion of one or more of the essential
market segments.
• Definitions which consider marketing to be a concept or a commercial
philosophy, namely that “marketing is a social exchange process which
presupposes the existence of a series of0 willing consumers and
producers”
• Definitions according to which marketing is an orientation “present, to a
certain extent, both in the consumer and in the producer: the phenomenon
makes the concept and the process possible”. 2
When approaching this matter, market survey specialists also use the term
“target-marketing” whereby the seller identifies the main market segments,
chooses one of more such segments and creates products and programs in
accordance with each of them In general, there is a risk that these micro-markets

1
Smedescu I. – Marketing – course notes, Romanian- American University, Bucharest, 1993.
2
Baker, M.J. – Marketing, Editura Societatea „Ştiinţă şi Tehnică”, Bucharest, 1997, p. 17-18.

7
might integrate.
This marketing orientation of the economic activity highlights a few
characteristic features of the researcher, namely:
• openness towards the market and the society’s requirements;
• a rigorous knowledge of these requirements, their systematic monitoring
and even their anticipation – a process which presupposes adopting a scientific
approach to the social and the economic environment;
• the use of an adequate set of tools;
• the high capacity to adapt his activity to the evolution of consumption
requirements and to the market dynamic;
• inventiveness, creative spirit, permanent interest in the renewal and
modernization of products and services, the forms of distribution, the promotion
methods and of the relationship between the company and the market;
• a unitary vision on the whole sequence of activities which make up the
economic cycle of goods and services.
It can be systematically proven that the definitions of marketing focus on
three elements based on which they can be categorized (according to Rodger,
L.W., 1971, Levitt, T., 1960, quoted by Jugănaru Mariana, 2000) 1: definitions
according to which marketing is a process the rules of which are set through the
marketing channel which connects the producing company to the related market;
definitions which consider marketing to be a concept or a commercial philosophy;
definitions which regard marketing as an “orientation” which both the consumer
and the producer exhibit, to a certain extent.

1.2. The Evolution of Marketing – Emergence, Development

Marketing has a relatively short history, the first practical activities of this
kind dating back to the beginning of the XXth century. Up to the middle of the
past century, marketing spread quite slowly. Beginning with the '50s, there was a
booming expansion of marketing and companies and economies with different
structures and levels of development took an interest in it.

1.2.1. Conditions for the development and promotion of marketing

It is considered that the beginnings of marketing coincide with the first
theoretical and practical activities of this kind that occurred in the XXth century.
The fact that marketing, as practice and theory, appeared in countries with well
developed economic, has determined a series of authors to look for the genesis of
this phenomenon in the abundance of products and services on the market and in
the interest in solving the specific problems of consumer societies.
One of the most significant factors which favored the appearance and
1
Jugănaru M. – Marketing, Expert Publishing House, Bucharest, 2000, p. 17.

8
promotion of marketing was the industrial revolution, which started once with the
propagation of the large- scale use of machinery, which came to replace manual
work, therefore allowing people to renounce the old production system and to
rapidly develop mass production at more accessible prices for the buyers at large. 1
The appearance and spread of marketing as well as its practical promotions
must be put down to the economic and social dynamics, rather than to the
abundance of goods and services. Abundance is a relative notion, which fails to
represent an accurate dimension of offer, but a price- mediated relationship
between offer and demand, so that when set against demands of different sizes the
same offer will sometimes be insufficient, while at other times it is over abundant.
The conditions under which marketing appeared and was promoted are
more profound, as they are associated to the social and economic dynamism
specific for our age, and, mores specifically, to the features of the post WW II age.
This economic and social dynamism materialized under the following
forms:
• Development of production forces;
• Specialization of production;
• Demographic changes;
• Change in labor and living conditions.
All of these elements had a direct or an indirect influence on the market and
on the relationship between the economic agents and the market. However, there
was a whole series of other influencing factors, such as:
• Development of international economic relationships;
• International labor division;
• Some states gained their independence, which gave rise to possibilities for
them to use human, material and financial resources more efficiently.
The economic and social dynamism results in the accentuation of the
separation between production and consumption, the amplification of their
tendency to evolve relatively independently.
The industrial revolution brought about the replacement of manual work,
which allowed abandoning the old production system and rapidly developing
mass production, at prices more convenient for the majority of buyers, which
constituted one of the main factors in the appearance and promotion of
marketing. 2
Marketing appeared precisely as a reaction to the economic process of the
more and more radical separation of production and o consumption.
Given that the first practical and coherent marketing activities as well as the
first theories thereupon appeared in the USA, it is possible to assert that this is the
place of origin of the marketing concept. Such appearance was due to the specific

1
Baker M. – Marketing (translation), Societatea Ştiinţă şi Tehnică, Bucharest, 1997, p. 4.
2
Balaure V., (coordinator), − Marketing, Uranus Publishing House, Bucharest, 2000, p. 11.

9
nature of the development of the American economy and society and to the
dynamism of that society. 1
Hence, given the strong social and economic dynamics of today’s world,
modern companies can no longer take the risk of a purposes activity, which does
not have an efficient result.

1.2.2. Stages in the evolution of marketing practice and theory

Given the growing dynamism of the economic and of the social
environment, marketing has become more salient in the life of companies. This
process was stimulated by the market relationships between the companies,
which, competing against one another, turned out to be the best and most efficient
if they based their activities on marketing methods and techniques.
When referring to the evolution of marketing, David Gilbert and Nick
Bailey, quoted by Baket M.J. (2000), adopt the view that the practice of modern
trade developed through three stages which focus on production (offer increase/
price decrease), sales (selling what can be produced), marketing (producing what
can be sold).
Marketing was first promoted extensively, in the sense that more and more
companies and business domains adopted its perspective, its specific activities and
its tools, starting from the production domain, especially that of commodities, and
gradually covering all economic domains. This extensive development of
marketing was the natural result of the companies’ management structures
becoming more sensitive to the positive experience of those who used marketing,
as well as that of the publishing of specialized marketing books. Once experience
was acquired, there followed an intensive development, which consisted of the
consolidation, improvement and maturing of marketing in the industry branches
and companies that adopted it. Therefore, there was a passage from a limited to an
integrating marketing vision, from simple to more complex methods and
techniques, from isolated marketing actions to coordinated actions within complex
projects, intended to lead to the attainment of the objectives set. 2
I. One of the first to describe the stages of this process was Robert King,
who believed the first was a production- oriented stage (1900-1930), then a sales-
oriented stage (from 1930 to 1950), followed by a marketing- oriented stage
(beginning with 1950). Later on, there appeared five concepts corresponding to
five approaches to the marketing activities, based on the strategic positioning of
the company, namely: orientation towards production, the product, sales,
marketing and corporate marketing.
Orientation towards production is the method of managing a company’s
resources with a view to optimizing the use of the production factors within the

1
Balaure V., (coordinator), – Marketing, Uranus Publishing House, Bucharest, 2000, p. 12.
2
Idem p. 40.

10
company to obtain a maximum of economic results subject to an established level
of total costs. 1
This perspective, which is characteristic for the first half of the XXth
century developed against the background of a seller’s market, where buyers had
just a few possibilities of choosing the goods to satisfy their needs and wishes.
The economic agent almost exclusively concentrated its efforts on the
improvement of the manufacturing process and of the simplification of the sale.
Generally, orientation towards production may be a short- term solution in the
following situations: 2
• Penury: if demand from consumers exceeds what the market can offer, in
which case prices will rise artificially and competitors will be attracted by the
profit they may make. If the company wishes to outdo its competitors, it can
increase production in such a way as to leave the smallest number of customers
for its potential competitors. Whoever might wish to enter the market will
therefore be forced to reduce profit only to gain a segment.
• High costs per unit: if a product’s manufacturing price is considerably
higher than what the consumer is willing to pay for that good, sales can slow
down or even decrease significantly. Productivity improvement and cost per unit
reduction can be attained though an increase in production, which might also lead
to an extension of the product’s market.
Orientation towards the product represents the method of managing the
company’s resources through the concentration of efforts on the continuous
improvement of the product’s performance and features. This orientation leads to
the so- called “marketing short-sightedness” 3, that is a focus on the product rather
than on the buyer’s needs.
Orientation towards sales represents the method of managing a company’s
resources by concentrating the company’s efforts on the methods and techniques
of stimulating retail sales, by emphasizing the qualitative advantages of one’s own
offer as against the competitors’.
Given the overall economic development, the market is more dominate by
the buyer and there is a higher pressure of offer on demand, and the balance
between the two essential market components is lost in favor of offer. Within this
reference framework, there appears and develops a new economic perspective:
orientation towards marketing, according to which the economic agent no longer
aims to optimize production or sales, but to study customers’ needs tastes and
preferences in order to base the structure and qualitative level if manufacturing
and of production on the requirements expressed on the market.
The market is no longer regarded as an amorphous mass of consumers and
demand bearers are grouped into market segments, which differ based on the forms
1
Pop N. Al. – Marketing, Editura Didactică şi Pedagogică, Bucureşti, 1996, p. 9.
2
Hill E, Terry O'Sullivan – Marketing, Editura Antet, Bucureşti, 1997, p. 19.
3
Kotler Ph. – Marketing Management, Teora Publishing House, Bucharest, 1997, p. 47.

11
of manifestation of the demand intended to meet a specific need.
Philip Kotler distinguishes between the concept of selling and that of
marketing and he analyzes the four elements which contribute to an enhanced
efficiency of marketing activities: target market, consumer needs, coordinated
marketing and profitability.

Table 1.1. − Marketing Activity Orientation

Elements Sale-oriented Marketing- oriented

Starting point → Plant Target market
Focus → products Consumer needs
Means → sale and promotion Coordinated marketing
Final objectives → profit by sales volume Profit from customer
satisfaction
Source: adapted from Kotler Ph. – Marketing Management, Teora Publishing House,
Bucharest, 1997, p. 50.

Orientation towards social marketing represents the method of using

companies’ resources mainly aimed at studying the needs and wishes of a specific
market with respect to the competition but in such a way that both the consumer
and his environment are protected.
Ph. Kotler defined corporate societal marketing as “an orientation of the
company’s management, which recognizes that its most important task is to study
the needs and wishes of the market and to meet them not only more efficiently
than the competition, but also in such a way as to maintain or improve
consumers’ or the community’s welfare”.
The specialized literature (Evans J.R. ş.a. 1984 quoted by Zaharia R., 2001) 1
distinguishes between social and classic marketing.
The table below presents such distinctions.

Table 1.2. − Differences between social and classic marketing

Item Social Marketing Classic Marketing

no.
1 Applies to organizations, persons, places,
ideas, goods and services
2 Exchanges are not usually of a financial
nature
3 The purpose of the activity is more
complex and its success or failure cannot
be strictly measured in financial terms
Applies to goods and services but
only to a small extent to ideas
Exchanges are of a financial nature
The purpose of the activity is
generally represented by an increase
of profits and o sales

1
Zaharia, R. – Socio-Political Marketing, Uranus Publishing House, Bucharest, 2001, p. 17, 27.

12
 Item Social Marketing Classic Marketing
no.
4 The benefits of the target groups are very Benefits are consistent with the
often correlated with the payments made payments made by the consumer
by such groups
5 Most of the times, social organizations Companies only address profitable
address target groups that have allow market segments
purchase power and which are inefficient
from the economic point of view

6 Generally, the social organizations’ market The company’s market has only one
ahs two components: the relationships with component: the relationship with the
the target groups and the relationships with customer.
the subscribers

II. As regards the modern perspective on marketing, the situation is somewhat

clearer. Robert Bartels divided marketing history into several periods, namely: 1 the
first decade is the marketing “discovery” decade ; during the next decade marketing
“conceptualization” takes place; the 20s are characterized in that marketing is
“integrated” into the life of companies; the 30s represent a period of marketing
development; during the fifth decade there is a re- assessment of marketing; the
following decade brings about a “re-conceptualization” of marketing still valid to
nowadays.
III. The German professor Manfred Bruhn also points out the existence of
several marketing development stages, which mark different points of view in the
treatment of retail markets, namely: 2
• Product- oriented stage (the 50s) – after the Second World War, the focus
was mainly on the development of production so as to meet the demand in excess;
• Sales-oriented stage (the 60s) – at a time when there was growing
competition among producers, the main issue was no longer production, but trade,
which had to deal with a diversified offer;
• Market-oriented stage (the 70s) – due to an excessive offer of goods, the
focus shifted to the end consumers;
• Competition-oriented stage (the 80s) – given that marketing efforts were
all oriented in the same direction and on the rise, it became more and more
difficult for each company to gain advantages over the competition;
• Environment- oriented stage ( the 90s) – during the stage, emphasis is laid
on the various environment- related factors (ecologic factors, politic
developments, technological trends, social changes, etc.).
1
Florescu C. (coordonator) – Marketing, Marketer Publishing House – Academic Group of
Marketing and Management, Bucharest, 1992, p. 35.
2
Bruhn M. – Marketing (translation), Editura Economică, Bucharest, 1999, p. 13.

13
 1.3. Marketing functions
The clear understanding of the scope of a science is directly connected to
the identification of such science’s functions. In this way, its domains of
application and the area it covers are correctly identified.
Ph. Kotler 1 considers that the functions of contemporary marketing play the
essential role of guiding the company on the market because: it provides a
guideline, namely that of focusing on meeting the needs of the most important
categories of consumers; to this end, the necessary input data is provided so that
the favorable circumstantial opportunities are identified and the company’s
possibilities to turn them to good account are assessed; it provides the strategies
needed to attain the objectives of its various operating units based on their potential.
According to the first attempts to identify the functions of marketing, it was
intended to designate the activities performed in the transfer of the goods from the
producer to the end user. Thus, the specialized literature mentions: functions
counting in the transfer or property (sale, purchase); functions concerning the
physical movement of goods (handling, transportation, storage, etc.); functions
intended to support the distribution process (dosage, packaging, financing,
insurance, etc.).
Based on the analysis of the means of intervening and of the possibilities of
performing actual marketing activities it is possible to discern a series of
significant differences depending on the domain marketing applies to (industry,
trade, services, etc.), the nature of the markets, the specific nature of companies.
Irrespective of the particularities arising from its scope of application, the
role of marketing comes down to a set of common, general functions: 2
a) Market survey, research into consumption needs, these are the starting
point of the entire marketing activity. The performance of this function is aimed at
gathering information concerning present and potential markets, all of the
consumption needs, consumers’ behavior. The need for and performance of this
function concerning consumer behavior must be covered through a systematic
flow of information on the economic apparatus, all of the environment elements
the company takes into account (with reference to the main factors whose action
is extended up to the market spheres). At the same time, the investigation also
covers the other elements of the environment the company takes into account
(demographic, economic, social, politic etc. environment). Hence, unless there is
an adequate data base, acquired through this functions, the marketing activity
cannot prove to be efficient.
b) The dynamic connection of the company to the economic and social
environment represents another marketing function. This function requires that

1
Idem, p. 30.
2
Florescu C. (coordonator) – Marketing, Marketer Edition – Academic Group of Marketing and
Management, Bucharest, 1992, p. 26.

14
the company should have appositive attitude, that it should adapt to the
circumstances of its environment, that it should take advantage of opportunities
and even influence consumption in the case of specific products or services.
The performance of this functions presupposes promoting an innovative
spirit throughout the company’s activity so that the offer is renewed frequently,
the forms of distribution are improved, promotional activities are diversified, etc.
c) Meeting consumption needs under superior conditions is the purpose
of any company interested in performing an economic, social and profitable
marketing activity. In fact, this function consists of a set of actions aimed at
limiting production to those products (services) that are necessary for
consumption, distributing them under the best of conditions, ensuring a wide
range of choices based on consumers’ tastes and preferences, expanding the range
of services, educating consumers’ tastes.
d) Maximizing profit presupposes the judicious distribution and use of the
material, human and financial resources the company has, optimizing the structure
of production and of the other economic processes (transport, storage, sale etc.)
that are part of the complete product and service production- consumption.
All of the four functions presented herein above have specific forms and
variable intensities in the marketing practice, irrespective of the domains, level or
scale of its application. At the same time, these functions are organically
integrated and the accomplishment of the company’s functions even depend on
them (research- development, production, trade, finance- accounting, human resources).
In this way, marketing becomes more influential, which is why the
specialized literature states that “marketing is so important that it cannot be
treated as a separate function” 1.

1.4. Marketing Universality; Considerations on marketing

specialization
Two aspects of marketing development must be kept in mind: universality
and specialization.
Universality refers to the fact that marketing is present in economies having
reached different development stages and with different forms of organization. 2
Marketing specialization, considered as one of the most prominent specific
traits of contemporary marketing, refers to its variation depending in the economic
domain, location and level of organization of the economic activity. It can be
shown that marketing has risen once with the accumulation of experience, with
the growing need to find the most efficient solutions to apply it to the specific
issues of various companies.
Authors Manfred Bruhn and Jörg Tilmes (quoted by Zaharia R, 2001) 3

1
Balaure V., (coordinator), op.cit., 2000, p. 34, 35.
2
Jugănaru M. 2000, p. 30-31.
3
Zaharia R, op.cit., p. 17, 27

15
define social marketing as covering the functions of planning, organizing,
implementing and controlling the companies’ marketing strategies and activities
directly or indirectly aimed at solving a series of social problems.
Thus, the differences in the application of marketing depend on the
following main criteria: specific nature of the economic activity, location, level of
economic and social organization.
a) The specific nature of the economic and social activity represents the
criterion having generated differences in the marketing application method:
• Means of production marketing – intended for the production and
circulation of material goods for productive consumption.
• Consumer good marketing– this is where marketing reaches its widest
span and it also represents a reference point with respect to which the specificities
of the other specialized domains are identified.
• Agricultural marketing (agro-marketing) – with extremely specific
applications in point of the knowledge concerning the demand for and offer of
agricultural products.
• Services marketing – the most dynamic specialized domain, motivated by
the more rapid evolution of the tertiary sector of a modern economy with respect
to its primary and secondary sectors.
The main particularities of the services (their intangibility, the impossibility
of storing them, their consumption on the production site, etc.) have attributed a
series of specific features to the marketing research covering this domain.
There is an enhanced specialization in the services domain, which leads to
the creation of distinct scopes of business: tourist marketing, transport marketing,
finance- banking marketing, etc.
b) Location is another criterion based on which marketing specialization
occurred:
• Domestic marketing refers to the marketing activity covering the local and
national market;
• International marketing refers to the marketing activity performed outside
the borders of a country, as a consequence of the increased dynamism of global
trade in the past decades, global production, the general amplification of
international exchanges of goods and of services. 1
The specific nature and particular aspects of international marketing results
less from the change in the tasks it deals with respect to domestic marketing, and
more from its higher complexity. Such complexity (according to Pop Al.I.,
2001) 2, is assessed by comparison with the domestic company which faces a
market environment and political and legal framework that evolve gradually due
to the existence of a certain constant in the action of market factors.

1
Balaure V. (coordonator) – Marketing, Uranus Publishing House, Bucharest, 2000, p. 58.
2
Pop Al.I., 2001, op.cit. p. 46-47.

16
 c) The level of economic organization at which marketing intervenes
represents the third main criterion based on which specialization occurs. Hence,
the following forms of marketing can be identified:
• Macro-marketing, which refers to the fact that marketing covers the
organization and operation of companies within the framework of
economy;
• Micro-marketing, which refers to the situation in which the company
uses marketing at the level of national economy, through its specific
forms of organization, in order to set directions for the economic activity
(different from one country to the other).
d) The task criterion, which considers marketing objectives depending on
the status of demand:
• Stimulating marketing– applied to generate demand where it does not
exist;
• Conversional marketing– used to modify demand;
• Development marketing– used for the development of demand when it is latent;
• Revitalization marketing – applied in case of hesitant and dropping demand;
• De-marketing – demand reduction instrument;
• Anti-marketing – resorted to in order to halt or destroy demand.

1.5. Marketing in non-economic domains

As marketing evolved, it also penetrated into domains outside the scope of
the economic activity proper; specialized literature refers, for instance to social
marketing social.
The concept of social marketing was introduced in the specialized literature
by the American professors Ph. Kotler and G. Zaltman in 1971 and it was defined
as “[…] the elaboration, application and control of programs aimed at enhancing
adherence to an idea, a cause or social behavior, within one or more targeted
groups”.
This is how a multitude of marketing conceptual derivates appeared. For
instance civilization marketing, created by Matricon Claude (quoted by Zaharia
R., 2001) 1 and characterized in that it strays from traditional marketing due to its
vision that is quite difficult to attain, if not utterly utopian.
On the same model, there appeared educational marketing, aimed at
maximizing the effects of a particular training process, cultural marketing,
sanitary marketing, which aims not only to reduce the number of people affected
by illness, but also to promote medicine.
It should be noted that marketing poses a series of special issues in the

1
Zaharia, R. – Socio- Political Marketing, Uranus Publishing House, Bucharest, 2001, p. 18-19.

17
cultural domain (according to Moldoveanu Maria, ş.a., 1997) 1, namely:
assimilating significant marketing concepts into cultural theory and practice;
creating new concepts and improving the already existing ones by adding new
meanings born from practical situations; experimenting new methods of
investigating cultural consumption and consumer behavior; creating efficient tools
to be used in the forecasting of cultural phenomena.
The series continues with institutional marketing, the marketing of
legal/religious services, etc., each with its particularities and characteristic traits. 2
Among these, ecologic or green marketing has been very dynamic.
According to this concept, which appeared as a consequence of the public
growing sensitive to issues concerning the natural environment, the company’s
products are to be adapted to the environment protection requirements and then
their performance is to be enhanced so that more and more consumers come to use
ecologic products.
Sports marketing and ecclesiastic marketing have undergone a surprising
development. Marketing literature provides several definitions of sports
marketing. Sports marketing means “all of the activities intended to meet sports
consumers’ needs and wishes through exchange processes”(Mullin B.J.,1993,
quoted by Oprişan Virginia, 2002) 3.
Political marketing has a special position and there has been no real
consensus on its definition. Philip Kotler defines political marketing 4 “[…] as
the interaction between two social units, one of which (the candidate) seeks to
obtain the desired answer from the other social unit (mandatory), an answer which
is free, but likely to be influenced by certain benefits which can be offered by the
candidate”.
Political marketing and social marketing are two distinct components of
non-profit marketing, which includes the following specialties: electoral
marketing, which refers to the running of an electoral campaign, which requires
carefully studying the electorate, knowing the characteristic features of the
electorate’s behavior and identifying the electorate’s sensitive issues concerning
the various domain of social and of political life; the marketing of public and
administrative power (practiced in ministries, city councils, etc. with a view to
ensuring a permanent dialogue with the citizens), international political marketing
(instated and practiced by the public or collegiate bodies of a certain country with
a view to promoting the respective country’s image abroad).

1
Moldoveanu, M., Ioan Fran V. – Culture Marketing, Expert Publishing House, Bucharest, 1997,
p. 21-22.
2
Smedescu I. Note de curs, 1993.
1
Oprişan V. – Marketing and Communication in Sports, Uranus Publishing House, Bucharest,
2002, p. 38-39.
4
Zaharia, R. – Socol- Political Marketing, Uranus Publishing House, Bucharest, 2001, p. 36, 37,
41.

18
 It is clear that each of the situations in which non- profit marketing applies
should take into account the specific traits of the domain, without however
affecting the concept of marketing by striving for success at all costs in the case at matter.1

1.6. Marketing institutions and bodies

An important role in the promotion of marketing theory and practices was
that of the national marketing agencies, federations, etc.. Their activity mainly
focused on the organization of a series of scientific events aiming at promoting
marketing, the publishing of reviews and books, the advocacy of the concepts,
techniques and successful practical actions connected to the marketing domain.
The oldest body is the American Marketing Association (AMA), founded in
1937, which became the flagship of all of the communities interested in marketing
promotion and progress. Among the most important AMA publications there are:
“Journal of Marketing”, “Marketing Management”, “Marketing News”, “Journal
of Marketing Research”, “Journal of International Marketing”, “Marketing Health
Services” etc.
Later on, national marketing associations were founded in a series of
developed countries in Europe (France, Great Britain, Switzerland, Germany). For
instance, the French marketing association is called ADETEM (Association
française pour le développement des techniques de marketing), and it is the editor
of the “Revue Française du Marketing”. 2
In Romania, the first marketing association was founded in March 1971,
under the name of Romanian Marketing Association (AROMAR), editor of the
“Management – Marketing” review.
Romania became an affiliate of the International Advertising Association,
which includes more than 3,000 members from 90 countries.
The growing interest in the science of marketing has led to the appearance
of a series of international associations, initiators of prestigious events
(congresses, seminars etc.). The most important associations of this type are the
following: ESOMAR (European Society for Opinion and Marketing Research),
ISMD (International Society for Marketing and Development), International
Marketing Federation, WAPOR (World Association for Public Opinion Research.
A sign of the growing spread of the exchange of ideas in the academic
world and of research in the specialized higher education, as well as of the
growing interest in our country was the fact that in the summer of 1997, the sixth
International Conference on Marketing and Development, which approached the
subject of the “Challenges of Transition Economies”, was organized in Mangalia,
under the patronage of the International Society for Marketing and Development.

1
Pop N. Al. Op.cit., p. 22-23.
2
Balaure V. (coordinator) – Marketing, Uranus Publishing House, Bucharest, 2000, p. 49-50.

19
 CHAPTER 2

THE COMPANY’S MARKETING ENVIRONMENT

2.1. The Company’s External Environment

By and large, the environment within which companies operate comprises a
range of factors making up a complex structure; they are economic, social, cultural,
legal, political, demographic, ecologic factors. In a macroeconomic vision, companies
are part of this environment, firstly of its economic component. The environment is
made up of an exogenous variable network to which the company opposes its own
resources – human, material and financial – respectively, a set of endogenous
variables. Thus a system of relations is drawn up between the company and the
outside environment, which obviously puts its mark on its entire marketing activity.
The company faces an ongoing changing environment, since its components
do not evolve at the same pace. Function of the way these components modify, the
nature of the economic order, the relations between them and the effects therein
issuing, the outside environment can take three shapes:
a) a stable environment – typically characteristic of “quiet” times when the
evolution of various phenomena is slow and easily predictable;
b) an instable environment - characterized by frequent changes in most of
its components, oftentimes these changes being difficult to predict; such an
environment forces companies into an ongoing effort to research and adapt to the
changes taking place or predicted to take place in the environment;
c) a troubled environment – such an environment is relatively « hostile » to
companies, posing difficult adaptation and even survival issues.
The environment characterizing our country is a troubled one, this trait
being given by the economic, social and political situation of Romania, where
reforms stall, with most companies experiencing difficulties in adapting
themselves to the evolution of this environment (Florescu C. - coord., 1992, 50).

2.2. Components Making up the Company’s External Environment

The company external environment is made up of a micro-environment and
of a macro-environment. The micro-environment comprises those factors that
directly influence the company activity in its relations with suppliers and
customers. These factors are: the company itself, merchandise suppliers, service
providers, labor force suppliers, clients, competitors and public bodies. The
macro-environment is made up of a range of social factors acting on the

20
company’s micro-environment. These are demographics, economic,
technological, cultural, political and legal factors.

2.2.1. The Company Micro-environment

The company micro-environment is made up of the range of relationships
developed by the economic actor with its suppliers and beneficiaries, relationships
usually involving other participants, as well (intermediaries, competitors, public).
The main components of the micro-environment are:
a) The merchandise suppliers are those companies or persons providing the
company with the necessary resources to manufacture its own goods or services.
These supply the equipments, raw materials and materials or the machinery
necessary to manufacture its own products, raw materials or components
comprised in the product or even the packaging or other components allowing for
the product to be effectively and securely delivered to the final user (Hill E. &
O'Sullivan T., 1997, 47).
b) The service providers are represented by companies or private persons
providing a wide range of services necessary to ensure the normal operation of the
company’s activities. We underline among them:
- trade companies (traders) that assist the company in finding clients or in
trading its products;
- physical distribution companies assisting the company in storing and
transferring its goods from the points of origin to the destination;
- marketing service providers are research companies, advertising agents,
mass-media relation companies and marketing consultancy companies assisting
the company in selecting and promoting suitable products for each market
individually;
- financial intermediaries are represented by banks, credit companies,
insurance companies and other companies contributing to the company’s
financing or its protection against risks related to products purchase and sale
(Kotler Ph., 1998, 180).
c) The labor force suppliers provide the human resources necessary o the
adequate operating of the company, comprising education units, labor pool
offices, persons looking for employment.
d) Clients are companies, institutions or individuals that the companies
addresses its goods or services to. In professional literature, the most encountered
client grouping is as follows:
- consumers are private persons and households purchasing goods and
services for their own use;
- industrial users purchase goods and services in order to process them in the
manufacturing process;
- traders purchase goods and services in order to sell them at a higher price;
- institutions are represented by schools, hospitals and other organizations
21
providing necessary goods and services to the persons they cater to;
- governmental markets are made up of state agencies purchasing goods and
services in order to provide public services or to place them at the disposal of
those in need of them;
- international markets are made up of buyers from other countries
(Smedescu I., 1993, 63)
e) Competitors are similar organizations attempting to cater to the same
customer needs and which are perceived by consumers as alternatives to need
satisfaction. Several categories of competitors are underlined:
- direct competitors are organizations which offer the same type of products
of services in order to cater to the same needs;
- indirect competitors are companies providing clients with a similar product
yet having other characteristics, catering to other preferences or needs;
- replacements can have products that are extremely different in shape but
that cater to the same need;
- new-comers are represented by companies already catering to a certain
consumer group and deciding to extend the range of products offered (Hill E. &
O'Sullivan T., 1997, 43-46).
f) Public bodies become a part of the micro-environment when they can
influence the company in reaching its objectives. Kotler identifies seven
categories of such bodies: financial bodies, mass media, state bodies, citizen
bodies, local public bodies, the large public, its own staff.

2.2.2. The Company’s Macro-environment

A company’s macro-environment represents the whole range of external
factors exercising an influence on its status and evolution and over which the
company has no direct control or influence. The macro-environment equally acts
both on the respective company and on the others.
a) The demographic environment comprises the population situated in a
company’s operation area. It is characterized by the population number of an area,
the population density, its geographical location, structuring per groups of age,
gender, race, occupation etc.( Stăncioiu A.F., 2000, 36). By analyzing the models
and trends in the population structure it is possible to anticipate consumer
behavior on a certain market, to the extent that their great number of needs and
wants are expressed by the demographics mentioned.
b) The economic environment is made up of a whole range of elements that
make up the economic life of the space the company operates in. In its
characterization, the branch structure of the economic activity, the overall and
branch development level, the degree of labor force occupancy, the financial-
currency situation are all to be taken into account.
The economy influences the total amount of income available to consumers
and organizations in order to make purchases. It also affects the income level that
22
consumers put aside in order to spend for themselves and the income level
generated by a company, thus influencing individuals’ and companies’ capacity
and wish to make transactions in order to obtain the goods and services desired.
There is a series of important economic variables that marketing specialists must
carefully observe in order to be able to take the right decision at the right time:
- income distribution: it has been noted that, as income increases, the
percentage of money spent on food decreases, while the amount of money spent
on luxury items increases;
- recession: reduces the total amount of income and expenditure in an
economy. Potential buyers cut down on their expenses and limit themselves to
essential goods, either because of unemployment per se or just out of fear of
losing employment;
- taxation: is the process whereby governments transfer money from the
private to the public sector. Direct taxes, such as income taxes, determine the
amount of money available for goods and services of their own choice, while
indirect taxes, such as VAT, increase the price of goods for the consumer;
- interest rates: can have a major impact on consumer availability to make
non-essential purchase. High interest rates not only limit current expenditures but
also prevent people from making other loans, which entails further decreasing in
the amount of expenditures for luxury and non-essential items.
- inflation: can appear if a growing demand in the economy allows
companies to increase prices without affecting their sales. The main problem that
inflation poses from the point of view of marketing is that it endangers foreign
markets. If a product becomes too expensive, it is possible to register a decrease in
sales in countries that do not face inflation pressures, consumers in these countries
redirecting to cheaper suppliers.
- exchange rate: is another economic variable affecting international
exchanges. Is a country’s currency grows as opposed to other currencies, products
become more expensive on the respective markets, yet if the currency depreciates,
export prices also fall and it is likely that demand should rise.
- the “feel-good” factor: known under this name from the British press after
the recession at the beginning of the 1990s, the factor refers to the consumer trust
in the state of the economy, that might or might not be reflected by economic
indicators.
c) the technological environment is made up of components actually
explaining “how” products that the company uses at a certain point are obtained
(Hill E. & O'Sullivan T., 1997, 36). Technology is a leading force of changes
occurring in a society and it is important to the marketing specialist for the
following reasons:
- it comes up with new ways of costumer satisfaction;
- it can identify latent needs;
- it can assist in discovering new consumers;
- it modifies demand patterns;

23
 - it can modify the nature of competition in an industry;
- it can increase marketing activities efficiency.
In Kotler’s view, the “market agent” should pay attention to the following
trends visible at a technological level: the high pace of technical progress, the
increase in R&D expenditures, the increase in the number of products evincing
minor improvement, stricter regulations aiming at increasing consume security for
increasingly complex products.
d) The cultural environment is made up of the whole array of elements
concerning the value system, customs, traditions, beliefs and regulations
governing people’s status in society. Kotler defines the main categories of cultural
factors influencing decision making in marketing. These factors are: the
continuity of cultural values, changes occurring in secondary cultural values, self-
assessment, opinions concerning others, view concerning organizations, the
society, nature and the universe. Marketing operators must be aware of these
factors, as well as of differences in their manifestations at the level of
communities making up the company’s market.
e) The political environment is made up of the society structures, social
classes and the part they play in society, political forces and the relations existing
between them, as well as the degree of stability of the domestic political element,
etc.
f) The institutional (legal) environment is made up of the whole range of
laws, governmental bodies and pressure groups influencing and limiting the
freedom of action for organization and individuals in a certain society. Ph. Kotler
states that factors making up the institutional environment are trade legislation,
the increased number of public interest groups and a higher importance granted to
ethics and social responsibility.
g) The natural environment is made up of the natural resources necessary
for market operators to develop their activities or that are influenced by marketing
activities. As far as the influence of this environment on marketing, the following
trends characterizing the current situation of the natural environment are to be
known: the raw material crisis, the increased power costs, the increasing pollution,
the state intervention in natural resources management (Smedescu I, 1993, 63).

2.3. Considerations On the Company’s External Environment

Changes occurring both in the micro- and the macro-environment of a
company can have positive or negative effects. They can create opportunities for
new deals with existing customers or can attract others. At the same time, that can
seriously hamper a company’s capacity to cater to its clients, thus causing a
mismatch between their demands and the company’s product. This is why it is
very important for marketing specialists to adopt a systematic process of

24
identification of significant changes in the environment, by analyzing their
relevance and forecasting the impact on the company.
Step 1: Observing. This calls for ongoing research of all environment aspects
so that changes could be identified at an early stage. Thus measures can be taken
before changes become menacing, being ahead of competitors.
Step 2: Monitoring. Once a change has been detected, information
regarding the nature of early stage trends and their forms must be collected, so
that an image that would be as clearly as possible could be obtained. Some
changes might prove temporary and insignificant, while others might develop to
the stage when they turn into either opportunity or threat.
Step 3: Forecasting. Once monitoring has spotted a relevant change,
forecasting is used in order to delineate the area, the speed and the intensity of
change. Project techniques can be employed in order to draw up possible future
action scenarios.
Step 4: Analysis. In the end, one must perform the analysis of the potential
effect of change on the company capacity to cater to its clients. Four categories of
impact can be identified, function of the probability that change should take place
and of its probable impact on the organization.

25
 CHAPTER 3
ANALYZING COMPANY’S MARKET: SIZE, EVOLUTION AND INDICATORS

3.1. The Content, Scope and Profile of the Company’s Market

The market can have various significances, one of which is given by the
place or space where exchanges or relationships between economic actors selling
and purchasing take place; another meaning refers to the market as the meeting
or confrontation place between the supply and demand of various goods,
regardless of the place where these occur, with the purpose of performing
exchanges at prices that are settled through negotiation (Smedescu I. −
Marketing, 1993, 21).
The market makes up both the premise and the finality of marketing
activities, and is to be found in the area of permanent contact between production,
on the one hand, and consume, respectively consumers and their behavior, on the
other hand. Manufacturers and consumers meet on the market and accomplish
their goals through transactions. The purpose of marketing being that to of
catering to the consumers’ needs and wants, it is clear that both the concept, the
attitude and the marketing solutions are related to the market (Danciu V., 1993, 36).
In this respect, we can define the market as being the sphere of
manifestation and confrontation between supply and demand, of accomplishing
them through selling-purchasing activities.
Taking into account such a starting point, the marketing approach of the
market cannot remain within the limits of general theoretical coordinates; it will
be, above all, a practical approach, with the information related to the market
having to serve precise actions.

The distribution
intermediaries market The public
institutions and bodies
The industrial
users market
The company
The individual The international
consumer market market

Fig. 3.1. − Main types of market that the company addresses its own offer

In this context we must underline the fact that, with reference to the nature

26
of the economy where it operates, one can speak of liberal market and
controlled market. In a marketing approach, the market can be effective,
speaking here of the size the market reaches at a certain point, respectively the
market transactions actually taking place, and potential, expressing the possible
market size, the broadest limits within which the confrontation between supply
and demand is to take place. (Florescu C. (coord.), 1992, 65).
In this respect one may reason that the actual or potential consume or use
penetration potential of the products or services of a company that
specializes in producing or selling them, defines the company’s market.
Function of the nature (profile) of the activity performed, there are:
a) goods producers markets;
b) service providers markets;
c) goods distribution companies markets and
d) non-commercial organization markets.
Starting from the consumers and non-consumers of a product one can reach
the company customers of that respective product.
A company’s market sphere is not limited to the share it has on the global
market (made up, function of the object of transactions, of the service market and
material goods market) but it also takes into account the geographical area
covered by its own sales, as well as the number and categories of consumers that
its supply addresses.

3.2. The Size and Evolution Factors of the Company’s Market

Knowing the dimensions of a company’s market allows its marketing
professionals to determine the place it occupies on the global market (of the
products that are manufactured or of the branch it is part of). These dimensions
refer to (Pop N.Al., 1993, 38):
a) The Company’s market capacity is a synthetic dimension reflecting
simultaneously: the volume of demand, the volume of supply, the number of
clients, etc. In most of the cases, a market’s capacity is assessed through the
demand (especially the actual demand), the meaning thus assigned being very
close to that of the concepts of outlet or market absorption power . b) The degree
of coverage of the company’s market is the expression of the sales volume and
demand volume ratio (by products, types, type-dimensions, etc.). The difference
between the (potential) market capacity and actual demand represents a
company’s extensible market. When this difference is null, the market is not
extensible.
c) The growth rate or the market extension rate is expressed through the
growth pace of sales (or of any indicator expressing market capacity).
d) The market share of a company is the part held by the respective
company on the product market that it manufactures (usually calculated as a ratio

27
between the company’s sales volume and the total volume of sales of the good or
goods making up its production profile).

CMi
= MSi
OMi

MSi – a company’s market share for product i;

CMi – a company’s market for product i;
OMi – overall market of product i;
Calculating the ratio between a company’s market share and the market
share held by the strongest competitor, one reaches an indicator called relative
(comparative) market share, function of which the respective company ranks as:
- sole leader, when respective relative market share is more or equal to 2;
- co-leader, when its size is close to 1;
- challenger, when, function of the size of the relative market share, the
company ranks second on the product market;
- specialist, when, even if the size of the relative market share is not
significant, the company holds a firm position due to its products specifics (that
outline it very well);
- petty competitor, when the size of its relative market share is insignificant,
its product not evincing any visible difference from one another.
The relative market share can also be determined by relating the company’s
market to the strongest competitor’s market.
The main market dimensions that we have made reference to are set based
on statistics regarding previous periods and forecast studies.
e) The market area represents the space dimension of a company. The
reference market evinces significant differences in most cases from one
geographical area to another, determined by some territorial particulars such as:
area specialization of market transactions, different geographical density, different
urbanization level, the density of the trade network, the level of economic
development, etc.
f) the market structure inscribes the company’s market, function of its
profile, size and operation area, in certain categories of the global market,
representing a subsection of the latter. At the same time, the company’s market is
made up of various segments, delimited according to certain criteria. Therefore, it
is not homogeneous, even in case of companies with a relatively limited activity
range.
The most important criterion operating differences in the market structure is
the object of transactions. Based on this criterion, the market divides itself in to
great components: commodities market and service market, each with its
particulars and specific trends. Moreover, function of the (manufacturing or non-
manufacturing) destination of goods or services, the two market components

28
divide, in their turn, each into two great subsections: the production means
market and commodities market, respectively, the production services market and
consume services market.
Detecting the factors that a company’s market size depends on and
measuring the intensity of their influence allows for the identification of the main
extension directions of its market activity. These factors are grouped in two
categories: endogenous factors intrinsically dependant on the company’s
economic strength, and exogenous factors represented by the action of
components in the company’s outside environment.
1. endogenous factors are represented by:
a) human potential – given by the number and qualification level of the
staff, their seniority in the company, intellectual skills and efficiency traits of the
employees;
b) material potential – represented by the material base of the company, its
age, the quality of technologies employed, the extension of mechanization,
automatization and IT used in labor processes;
c) financial potential – reflected in the results comprised in the company’s
financial-accounting records, finance availability in accounts, the amount of
liabilities and debt settling dates;
2. exogenous factors are represented by:
a) the nature of commodities that make up the object of activity of the
company and the category of needs it caters to;
b) the intensity of consume of goods and services provided by the company
also influences the size of its market;
c) population size and structure (by age, gender, urbanization level) is
another important exogenous factor, in the case of companies producing and/or
trading in commodities or the number of potential buyers among economic actors,
in the case of companies manufacturing and selling industrial equipment or raw
materials;
d) the population purchase strength expressed through its overall income,
through the average wage per employee, through the average pension per retired
person, etc. represents the degree of market solvency that the company addresses.
It is not without interest to know the structure of consume expenditure for the
population in the area where the company operates, when a company
manufacturing commodities assesses its success chances on a certain market;
e) sociological factors – determine human behavior as a product of the
environment the individual lives in – status, role, social prestige, mobility, peer
pressure, etc. – and psychological factors yielding the character basics and
shaping up the human personality – temper, state of mind, habits, expectations,
self-assessment, etc.
f) circumstantial factors – seasonal such as the climate, certain special
events (floods, earthquakes, epidemics, armed conflicts) complete the list of

29
exogenous elements that influence a company’s market dimensions (Pop N.Al.,
1993, 41-42).
If we disregard the company on whose behalf a product appears on the
market, we can state that it outlines its own market, a product market, as
subsection of the overall market, defined by the product’s degree of penetration in
consume, of consumer request, by current and future sale opportunities for the
product.

3.3. The Company’s Relationships with the Outside Environment

As component of the environment, the company is in permanent contact with
the other components. In practice, the company engages a whole array of relations
through which it directs and finalizes its economic activity.

3.3.1. The Company’s Market Relationships

With reference to the company operating in a market economy, it engages in
a range of relationships through which it directs and finalizes its economic
activity. Such relationships with actors of its outside environment make up a
company’s market relations. The most important relationships of the company
with its outside environment, by extension and complexity, are those having as
object the sale and purchase of goods, capital loan and staff hiring. The
dimensions and the looks of the company’s market relations depend on a series of
general and specific factors, objective and subjective, inside or outside the
company.
The criteria structuring a company’s market relations are:
a) the object of the relationships, according to this criterion these can be of
purchase and sale (delivery and acquisition of goods, service providing, renting,
loan, intermediary relationships, etc.) and message and information conveyance
aiming at creating a favorable attitude towards the company and its products,
accomplished through specific instruments, such as: advertising, brand, public
relations and other promotion techniques.
b) the market actors’ profile outlines the following types of relationships:
with suppliers and service providers, with beneficiaries, state institutions and
bodies.
c) based on their frequency, a company’s market relationships can be:
permanent, periodical or sporadic.
d) according to the degree of concentration, the relationships can be : dense
or loose (Florescu C. (coord.), 1992, 59).

3.4. Means of Company Market Expansion

30
 Any enterprise is interested in consolidating its position on the market, in
enhancing the volume of sales and eventually, its market share. In this respect, its
concerns will aim at (fully or partially) covering the gap between actual and
potential market. Developing a company’s market activity can be essentially
achieved in two ways:
a) the extensive way presupposes attracting new buyers of the company’s
products, either among relative non-consumers, or among the customers of
competitive companies. It is one of the most often encountered ways in
accompany activity, its boundaries being extremely broad. On the domestic
market, the extensive way takes shape especially in approaching new segments of
consumers, while on the foreign market it manifests itself by approaching new
geographical areas, new foreign markets.
b) the intensive way consists of increasing the average number of purchases
performed by a consume unit – individual, family, user company. Such a situation
can a owe significantly to an increase in the quantities consumed by them of taking
out of the market goods that are destined to extended use.
The intensive way posits a lot of limits, determined by the nature of
products making the object of sale and purchase acts. Thus, in the case of food
commodities, this way theoretically presupposes increasing consume to the upper
limit of physiological limits; in the case of non-food commodities and especially a
great deal of the services provided for the population, such limits are difficult to
set, so that the possibilities of extending the market are still greater. In the case off
goods with a productive use, the intensive method can be significantly employed
in launching on the market higher performance products, which results in
accelerating “moral wear” and taking outdated products out of use (Florescu C.
(coord.), 1992, 79).

31
 CHAPTER 4

MANAGING THE MARKETING INFORMATION SYSTEM

4.1. The Marketing Information System

4.1.1. Concept and Components of a Marketing Information System

An informational marketing system (IMS) represents the framework for the
management and structuring of information obtained regularly from external and
internal sources of the organization. Ph Kotler defines the informational system of
marketing as “an ensemble formed by specialists, equipment and procedures of
collecting, sorting, analyzing, evaluating and distributing correctly and on time,
information that is needed by the decisional agents in the marketing area 1. This
concept is presented in fig 4.1.

Fig. 4.1. – Informational marketing system

Source: Ph. Kotler, „Marketing management”, Teora Publishing, 2000, page 147.

IMS data can be obtained from the following sources: internal evidence,
supervision of the market, marketing research and support systems for analysis of
marketing decisions.
Internal evidence refers to the sales reports, prices, demands, stocks, etc.

1
Kotler Ph.. – Marketing management (tanslation), Edition II, Teora Publishing, Bucharest, 2000,
p. 146.

32
The internal flux of marketing information should regard at least the following
aspects 1:
1. Sales levels;
2. Income, costs and profits;
3. Comparative study between income, costs and the provisioned budget;
4. Quarterly clues of sales;
5. Stock levels and distribution on primary clients;
6. Cashing in product guarantees;
7. Analysis of costumers’ complaints;
8. Situation regarding costs of marketing and advertisement.
Supervision of the market represents the monitoring of the marketing
environment. This way, marketing managers can obtain very valuable information
from sales agents, intermediaries, companies specialized in market study.
An informational system lacks efficiency and scientific support without
including market research 2.
Market researches are various and can regard companies, market studies, the
influence of some components of the external environment over company
activities, the wants and needs of customers and users, study of the buying and
consuming behavior of clients, study of preferences regarding a product, etc.
Supports systems for marketing decisions’ analysis consist in statistical
instruments, optimizing models and procedures used by marketing managers in
adopting the right marketing decision.

Fig. 4.2. − Components of the Informational marketing system.

Xavier Gilbert classifies the informational system of marketing in

operational information systems and competitive information systems 3.
Operational information systems are projected to fulfill specialized tasks and they

1
Michael J. Thomas – Marketing Guide, CODECS Publishing, 1998, p. 41.
2
Olteanu V, −Management – Marketing, Ecomar Publishing, 2002, p. 19.
3
IMD Internaţional – Cum să stăpâneşti managementul la perfecţie, Editura Rentrop & Straton,
Bucureşti, 2000, pag. 315.

33
don’t allow the common use of information.
With the help of the telephone and the internet, clients can follow their
packages and can receive an immediate answer regarding the delivery. The
company website offers valuable information about clients and permits them to
express their opinions about the services of the company.
The continuous development of telecommunications and computerized
technologies allows informational marketing systems to cultivate one to one
relations with the clients
The informational marketing system has the following components:
collecting, sorting and analysis of information, data bases, computerized
technologies and marketing specialists. (see fig. 4.2.)

4.1.2. Information – Key Resource in the Current Business Environment

Knowledge of competition and of clients defines the success of an
organization, at present, when more than never, information represents power and value.
In the business world, these changes need a dramatic change of mentality, of
market, of research and the development of the product. Companies can no more base
decisions regarding products, on what people need. Firms have to find out, through
marketing research what consumers want or they should imagine ways to make
people want the products they sell. This method of capturing and stocking
information about the wants of the costumers leads to the use of information
technology in order to realize data bases. These data bases include valuable
information about the wants and wishes of the consumers.
What is information?
We can’t touch it, so it’s intangible, and its value is very difficult to be
measured. But it has been previously observed that information is vital to the
actual business environment. For understanding the nature of the information and
its meaning, we have to analyze another term – the “data”.
Data represent any primary facts or observations which describe a certain
phenomenon. For example, temperature, the cost of a piece, and age of an
individual represent data.
Information is a simple data but that has a particular meaning within a
specific context. For example, if you are trying to decide what to wear, outside
temperature represents information, because it helps you make a decision, while the
cost of a piece is not (it is a simple data). Information is data that has been
processed in a certain way or is presented in a specific way. In business, for
example, the cost of a piece can be information for the salesman, but it represents
only a data for the accountant responsible in calculating the current value of the
stock for that piece. The actual value of the stock represents information which the
accountant has obtained using two data.
What makes some information very valuable and another completely
useless? Unfortunately, sometimes, it’s impossible to quantify the exact value of
34
information. What we can do is define exactly what our needs are regarding the 3
dimensions of information: time, content and form.
Using these three dimensions, we can define the characteristics that give the
value of information.

a) The time dimensions of information

When we offer our clients details about products and services or when we
use information to take a decision, the temporary dimension of information is
critical. This dimension refers to the “when” aspect. Temporary characteristics
include:
♦ Availability: Information when we need it.
♦ Actuality: updated information

b) The content dimension of information

The content is frequently considered critical for information. This involves
the “what” aspect of information and the characteristics include:
♦ Accuracy: mistake-free information
♦ Relevance: information according to the objectives.
♦ Exhaustibility: complete information.
The accuracy characteristic specifies the fact that the received information is
correctly processed. Knowing the total sales from the previous day is useless, if
this number isn’t correct. The relevance and exhaustibly characteristic are very
similar. Nevertheless, it is expected that the information relevant to its objective
be also the information needed.
When complete information is obtained, in fact what is obtained is all the
information we need to realize a task or take a decision. For example, last month’s
costs report, is this a complete information? It depends on the need of that
information. If attempting to make a budget, a comparison of these costs to those
of the same month of the previous year becomes necessary.

c) The form dimension of information.

The last dimension of information is form, which involves the “how” aspect
of information. The characteristics of this dimension are:
♦ Details: thoroughly detailed information.
♦ Presentation: Information is offered in the most appropriate form:
Narration, graphics, color, publishing, video, sound, etc.
The detail characteristic of information refers to obtaining information that
can be synthesized or detailed according to the needed level. For example, a sales
director will want to know what sales figure is realized by each sales person. On
the other hand, a financial analyst from a corporation would like to obtain the
figures that show the sales accomplished by each store and not by the sales

35
people.
This aspect of detail is called “granulation of information”1
Information that has a fine granulation is detailed to the highest level, while
information with “rough” granulation synthesizes information to the highest level.
It is crucial to have the right information (content) when we need it (time)
and in the form that we need (form).

4.2. Sources Of Data In Marketing

4.2.1. The Concept of Source of Data

The modern enterprise, concerned to play a more active role within the
market, grounds the decision system on correct and adequate information
regarding the economic-social phenomena and processes in the environment they
operate in. The extension and frequency of such information are strictly dependent
on the complexity of the activity in development, the dynamism of the
environment that is about to join and, implicitly, the harsh competition, specific to
the beginning of this century and millennium.
Therefore, for the efficient orientation of its activities, it becomes more
necessary and urgent the need for some information which to be obtained,
modified and analyzed within a unitary system called marketing information
system (MIS).
Note: – The need for information has been increasing very much for the past years due to
the influences exerted by more and more numerous and complex factors.
The information offer has also been increasing considerably, moving easily from an
industrial economy to one based on information.
A great percentage, almost 70%, of the workforce in USA is engaged at present in
providing and modifying information. An impressing number of companies is analyzing at present
the manager’s need for information, they are gathering, modifying and designing information
systems which to meet these needs.

The information process of the enterprise starts from knowing its internal
resources – human, material, financial – of the objectives, strategies and
development policies, of the capacity of adaptation and mobilization of the
resources at the objectives aimed at.
In the above context, it is obvious that, increasing the area, frequency and
depth of the market investigation constitutes the base of the enterprise marketing policy.
The market investigation essentially means knowing the requirements of
the environment in which the enterprise carries on its activity by means of
different sources of data. In the marketing ideology the sources of data are those
sources which provide data about the market needed to make decisions in the
managerial activity of the firms or at the macroeconomic level.

36
 The source of information can be a person who talks, writes, or gestures, a
firm, an organization or a group of persons who send forth a message in the form
of a written note, of a gesture, of a radio or television broadcast or of any signal
which can be intercepted correctly 1.
In general, the categories of information needed in marketing research
should permit the description of some aspects such as 2:
 socio-demographic and economic characteristics of the consumers and
the environment that they live and function in;
 their past, present and future behavior;
 the motivation of buying or non-buying;
 the consumers’ attitudes towards goods and services.
Therefore, the plurality of the environment the enterprise operates in
determines the coordinates and objectives of its communication system which can
be: drawing the potential buyer’s attention, becoming acquainted with the product
and its features, developing a favorable attitude and, finally, materializing these
efforts in the sales of the product.
As a result, in the context of the economic and market globalization, the
communication problems with the internal consumers (users) or with the external
partners become more and more complex, requiring efforts of mutual information
much more important and varied. In this context “the marketing information
becomes a vital need” as Philip Kotler affirmed in Marketing Management.

4.2.2 Classification Criteria of the Sources of Data

The multitude and variety of theoretical data and practical knowledge
existing today, as a result of the contemporary economic and social dynamism, as
well as the importance of knowledge and acquiring it in order to improve the
economic activity determined, in time, the development of a complex
methodology to delimit these according to criteria which can be easily
emphasized in the research activity.
Although specialists propose, in most cases, the use of a fundamental
criteria of classification of the information necessary to the market investigation
such as the source of origin (desk data – secondary and field data – primary) we
still consider that the starting point in delimiting these is the method of obtaining
data according to which the data necessary for the managerial process derive from3:
 the firm’s internal records;
 the data resulted from market surveillance;

1
Danciu V – Marketing internaţional, Bucharest: Economică, 1998, p. 12.
2
Balaure V, and the others – Marketing, Bucharest: Uranus, 2000, p. 238.
3
Kotler Ph, Amstrong G, Saunders J, Wong V, – Teora: Principiile marketingului, Bucharest,
1997, p. 373.

37
  the results of the marketing research.
All the three information categories constitute separate subsystems of the
marketing information system which will be extensively discussed in the
following subchapter.
Another general criterion of the classification of the information data takes
into account the contents of data according to which these can be:
 quantitative data;
 qualitative data.
The quantitative information is obtained answering the questions “how?”
“How much?”, “where?”, “who?” which can be considered relatively objective
and controllable. They take into account the observation of the buyers’ general
behavior on the market, regarding the quantities that are bought, the buying
places, the categories of consumer that are interested.
The qualitative information refers to individual’s behavior in the informing and
buying process, being obtained as a rule, with questions such as: “why?”, “how?”
This information has a strong subjective character, mentioning here motivations,
perceptions, opinions, attitudes, preferences.
Taking into account the three main criteria of classification of the source of
data, previously described, we can draw up a general diagram to delimit these
according to their origin, as can be seen on Diagram 4.1..
Further using relevant sub criteria in delimiting the sources of data within
the two great categories obtained (secondary and primary) the following
classifications can be obtained:

A. Secondary data sources (desk research).

1. According to the information bearer, these can result from:

♦the investigated economic body: technical – operational record, balance
sheet, statistical;
♦ domestic governmental bodies: National Institute of Statistics, The
Ministry of Finance, the economic ministries etc.;
♦ research institutes: National Institute of Economic Research, The
Institute of World Economy, The Institute for Life Quality Research etc.;
♦ libraries: National Library of Romania, the Central University Library,
the libraries of the higher education institutions etc.;
♦ publishing houses: Editura Economică, Editura Teora etc.;
♦ banks: National Bank of Romania, commercial banks;
♦ the chamber of commerce: Chamber of Commerce and Industry of
Romania, the local chambers of commerce;
♦ business commercial organizations: for small and medium-sized
businesses, for rural tourism, for unfavoured zones etc.;

38
 ♦ non-governmental organizations: for consumers’ protection, ecological;
♦ international organizations: UNO (International Trade Statistic
Yearbook, Demographic Yearbook), European Union (Eurostat), MIF (Balance of
Payment Yearbook, International Financial Statistics), The Organization for
Economic Cooperation and Development – OECD (Statistics of Foreign Trade),
United Nations Conference on Trade and Development – UNCTAD, The
Organization for Food and Agriculture (Production Yearbook, Trade Yearbook),
World Bank, International Bank for Reconstruction and Development – IBRD
(World Bank Atlas).

Sources of data

Secondary Primary

Internal External information

information

- Governmental - Investigation
- Technical-operational programs Statistical - Observation
records documents of synthesis - Experiment
- Balance sheet - Normative act - Simulation
- Statistical records - Specialized literature
- Other information - Studies, monographies
- Periodicals
- Other information.

Diagram no. 4.1. – The sources of data in marketing research.

Source: M. Papuc – Era: Marketing , Bucharest, 1999.

2. According to the location of information, the sources can be:

♦ internal: they have as origin the firm, they existed before the research,
they are of quantitative nature, and they express the global activity and the
evolution of the main indicators of the firm;
♦ external: they are found outside the firm, they have the role to describe
the economic and social environment in which the firm’s activity is carried out,
aiming at consumers, competition, the competition’s products, and the firms’

39
hierarchy. The external data are, some public which means they are freely
accessible at minimum costs, and some are commercial, offered against payment
by marketing services.

3. According to the contents of the stated economic phenomenon, the

sources of data take into account:
♦ the demand for goods and services: statistical accounts, market surveys,
reported notes;
♦ the offer of goods and services: Statistical Annuary of Romania, statistics
of the ministries and producing economic agents, information bulletins, accounts, notes;
♦ consumer needs: specialized papers on consumerism, the statistics of
family budgets, market surveys.

4. According to the frequency of the information, these can be:

♦ permanent – operational records of the economic body;
♦ periodical – statistical records;
♦ occasional – notes, reports, conjectural information.

5. According to the form of expression:

♦ in physical, natural expression;
♦ in value expression,
♦ in words.

6. According to the level of structuring and assembling:

♦ on a macroeconomic level;
♦ on a microeconomic level.

B. Primary data (field research) is classified according to the following

criteria:

1. According to the place where data is obtained:

♦ from the consumers’ residence (head office);
♦ from the street;
♦ from shops;
♦ from trade fairs and exhibitions etc.

2. According to the period of time they refer to:

♦ permanent: family budget, panels;
♦ periodical: surveys on annual trade fairs;
♦ occasional: one-time statistical survey.

40
 3. According to the observation unit:
♦ person;
♦ family;
♦ household;
♦ enterprise, institutions, shops collectivities etc.
4. According to the procedure of data gathering:
♦ recording by means of the interview operator;
♦ self-recording;
♦ combined recording;
♦ by mail, telephone;
♦ telematics survey.

5. According to the researched collectivity:

♦ full research (in a body, complete);
♦ selective research (on a sample).

6. According to the form of expression:

♦ in physical, natural expression;
♦ in value expression,
♦ in words.

7. According to the level of structuring and assembling:

♦ on a macroeconomic level;
♦ on a microeconomic level.

As a result the marketing information systems are absolutely vital for the
coordination of business in the context of global economy in a fast changing.
They enable the faster access to a greater volume of information, but, mainly,
facilitate their analysis, evaluation and fast communication to decision-making
factors in the economic and social field.

41
 CHAPTER 5

CONSUMER BEHAVIOR

5.1 Defining Consumer Behavior

The consumer’s behavior can be defined by means of a general approach, as
representing all the decisional acts carried out upon individual or group level,
directly related to obtaining and using goods and services, in order to fulfill
present and future needs, including the decisional processes which precede and
entail such acts 1.
The American Marketing Association A.M.A. has described the consumer
as “a dynamic interaction related to impression and perception, behavior and
ordinary natural events by means of which the human beings conduct the changes
occurred in their lives”.
Starting from this definition, Jim Blythe, in his book – the Consumer’s
behavior, has synthesized a few guidelines:
• The consumer’s behavior is dynamic – in permanent change and evolution.
• The consumer’s behavior entails interactions – it is necessary to be known
what the consumers think, feel and do; which are the things and the places
influencing them, etc.
• The consumer’s behavior entails changes between the human beings. The
trade can take place only when, subsequently a transaction, both operators (seller
and buyer) mutually satisfy their interests.

5.2. Factors which influence the consumer’s behavior

The starting point grounding the knowledge about the consumer’s behavior
is the marketing and environment stimuli reaction pattern.

Psychological
Personal factors Social factors Cultural factors
factors
- material - reference - culture - motivation
situation groups - secondary - perception
- age and life - family culture - learning
stage - social role and - social class - beliefs and

1
I. Cătoiu, N. Teodorescu – Comportamentul consumatorului, Editura Economică, Bucureşti,
1997, p. 15.

42
 - profession position - personality and attitudes
- lifestyle self-
- personality and comprehension
self-
comprehension

Fig. 5.1 – Factors influencing the consumer’s behavior

Source: Ph. Kotler – Managementul marketingului, Editura Teora, 2000, p. 223.

The consumer’s characteristics and the decisional process entail certain

shopping decisions. The marketing’ role is to understand:
• what happens in the consumer’s mind between the action of the external
stimuli and the shopping decision;
• how do the consumer’s characteristics (cultural, social, personal and
psychological) influence the shopping behavior?
• how does the buyer make the shopping decisions?

5.2.1.Personal factors
The buyers’ decisions are influenced by personal characteristics such as:
material situation, age and life stage, profession, lifestyle, personality and self-
comprehension.

Material situation
A person’s material situation will influence the product choice. This choice
is influenced by the income that can be spent (size, stability, duration), the savings
and the owned assets, the debts, the lending power and the saving or spending
nature. If the economical pointers predict a recession period, the marketers can
take steps regarding the products’ price redesign, repositioning and adjustment in
order to maintain the value of the goods offered to the envisaged consumers.

Age and life stage

People change products and services throughout their entire lifespan. Their
preferences are influenced by their age. The consumption is also shaped by the
family’s life stage. The table below displays the nine stages of this cycle together
with the financial elements and the shopping patterns characteristic for each
group.

Table 5.1 − The family’s life cycle

Stage of the family’s cycle Shopping patterns

43
 Stage of the family’s cycle Shopping patterns
1. Singles: unmarried young Minimal economical means, fashion trend
people, who do not live setters, focused towards leisure. They buy
with their parents only the essential cleaning products,
furniture, cars.

2. Recently married couples: Economical situation better than that from the
young people without near future, high level of purchasing long term
children goods. They buy: cars, refrigerators, cookers,
life insurances, holidays.

3. Complete family I: the The shopping for the house reaches a

youngest child below six maximal level, dissatisfaction regarding the
years old financial situation and the savings achieved,
they rely on the credit system. They buy:
washing machines, food and child ware,
vitamins, toys.

4. Complete family II: the Better economical situation, some wives

youngest child is six years resume their work; children dominate
old or elder shopping. They buy: many and various food
products, music lessons, sports equipment.
5. Complete family III: elder Good economical situation. Many wives work,
married couples, having school and exams dominate, some children get
children under care their first job. They buy: new stylish furniture,
holidays, unnecessary home ware, boats, etc.

6. Incomplete family I: elder Maximal rate for owning houses. They are
married couples, with satisfied by their financial situation and their
children who do not live savings. They are interested in trips, leisure.
with them, the family’s They make gifts and donations. They are not
leader works interested in new products. They buy: trips,
luxury objects, modern products for their
homes.
7. Incomplete family II: old Significant income decrease. They buy:
married couples, the medical equipment, health care products.
family’s leader is retired
8. Single survivor, who works High income, high probability of selling their

44
 Stage of the family’s cycle Shopping patterns
house in order to buy a smaller one. They are
concerned with their saving and pension
level. They buy: holidays, hobby products.
9. Solitary survivor, retired Significant income decrease. Additional
medical needs, special need for attention, love
and safety.
Source: A.R. Morden – Elements of marketing, The Guernsey Press Co. Ltd, London, 1994, p. 73.

Profession
A person’s profession entails the purchase of certain goods and services.
Workers tend to buy more working clothes while clerks buy more ties and suits.
Marketers must identify the professional groups which are the most interested in
their products and services. A company can specialize in making the products
needed by a certain professional group.

Lifestyle
A person’s lifestyle is their way of living expressed by means of their
activities, interests and opinions. A person’s lifestyle expresses a bit more than the
social class or the individual personality. It reflects the general behavioral pattern
on society level.
The technique for assessing lifestyles is called psychography. It is a
quantitative lifestyle study drafted in order to determine the influence they have in
the purchase process. For instance, it is expected from a person having ecological
beliefs to have a lifestyle close to nature, which means the respective person will
buy a bicycle instead of a car, will be vegetarian, etc. Assessing lifestyles can help
making accurate previsions about the consumer’s behavior and the subject’s
preferences related to services and products.
A few research companies have drafted lifestyle classifications. The most
used is the typology of life values and styles (the VALS pattern, program drafted
in 1978 by the Research Institute from Stanford, the name representing an
abbreviation of “Values of lifestyles”). The chart describes nine different lifestyles
identified in the USA, according to their orientation. The lifestyle classification is
not universal as it may vary from one country to another.

Personality and self-awareness

Personality is a sum of individual features which bestow uniqueness upon
the subject and control its reactions and relations with the external environment.
The elements composing the personality are called features. The connection
between the personality’s individual features and the consumer’s behavior has
45
needed a significant research effort, having but a limited success. All this despite
an ordinary logic according to which people should buy those products which best
represent their individual features. It is obvious that the personality, as an entirety,
controls the consumer’s behavior rather than each individual feature, therefore:
• it is integrated: all its components act interdependently to form a whole;
• it is autonomous: its characteristics allow the needs’ fulfillment;
• it is exteriorized: the external behavior is influenced by the personality;
• it is consistent: once established, it proves to be fundamental and will
change slowly, with a certain difficulty and under certain circumstances . 1

Self-awareness represents the subjects’ ideas and feelings about their own
person. The product purchase adds to forming an image about their own person.
Self-awareness is learnt. Children search for models which they emulate.
Someone’s self-image comprises the following elements:
• Real image – as you are in fact;
• Mirror image – as you think the others see you;
• Ideal image – as you would like to be;
• Self-image – as you see yourself.

Ideal image

Mirror
Self-image
image
Real image

Picture 5.2 – Components of self-image

Source: A.R. Morden – Elements of marketing, The Guernsey Press Co.
Ltd, London, 1994, p. 63.
In marketing, this difference regarding the self-image is useful. The ideal
image implies the progress’ temptation: training courses, performing products,
plastic surgery. The self image (the reflected self) is important for those who are
society oriented. The mirror image is important for the status we think we
deserve, for choosing the respective product. The real image (the real self) is not
perceived by the consumer, although this element represents one of the most
important motivational factors of the consumer’s behavior.

5.2.2. Social factors

A consumer’s behavior is also influenced by the social factors, such as family,

1
J. Blyte – Comportamentul consumatorului (traducere), Editura Teora, Bucureşti, 1999, p. 53.

46
reference groups, social role and status.

Family
Among the reference groups, family is probably the most powerful which
influences the consumer’s decisions. There can be made a distinction between two
families in each consumer’s life. The first is the orientation family (the family
where the subject comes from) and the second is the procreation family (the one
the subject forms).
Marketers are interested in the role and relative influence of each member of
the family in purchasing various products and services. The involvement of both
husband and wife differs according to product class, culture, etc.
Recent research has shown that pre-teenagers and teenagers have a higher
influence upon shopping options than their parents themselves, due to the
following reasons:
• usually, they are the ones who shop as both parents work;
• they watch more programs on TV and therefore they are influenced by
advertising;
• they are informed about the consumers’ problems and have more time to
look for the desired products.

Reference groups
A group is represented by two or more persons who share the same set of
rules and whose relations entail for the said an interdependent behavior. The
groups which have a direct influence upon the consumer and whom he belongs
represent reference groups.
A reference group represents “an individual or a group of individuals who
significantly influence a person’s behavior”. The reference groups provide
standards and norms by means of which the consumers can assess their attitudes
and behavior.
The reference groups are classified into primary, secondary and affiliation
groups.
The primary groups comprise the most met people: family, friends, close
co-workers. A primary group is small in number and, thus, it allows face-to-face
contact and the subjects’ attendance is characterized by cohesion and reciprocity
which result in similar behaviors and beliefs.
The secondary groups comprise occasionally met people with whom we
have mutual interests. These groups can be religious, professional or unions,
which tend to be more conventional and do not need a permanent interaction.
People are influenced by their reference groups from at least two
perspectives: they expose the person to new behaviors and lifestyles, can
influence the person’s attitudes and self-awareness for the respective person

47
desires to join the group. These groups create pressures, compelling the person to
comply with certain rules, which may influence how that person chooses a certain
product or brand.
The target groups are the groups a person would like to join. These groups
may have a very powerful influence upon the individual’s behavior because,
usually, the respective individual will emulate the target group’s behavior hoping
to be accepted as its member.
The dissociated groups, on the other hand, are those groups a person does
not want to join.
The implicit groups are those groups where membership is implicit due to
age, type, culture or education. These are sometime called class groups. Although,
it seems they do not have a significant behavior impact because they are not
formed on voluntary criterion, people are however influenced by the compliance
pressure of the group itself. For instance, when old people by clothes, they pursue
a certain decency pattern complying with the specific status, avoiding the
ludicrous image of “old people dressed like young people”.
Therefore, marketers try to identify the consumers’ reference groups. The
reference groups’ influence degree differs from one product to another and from
one brand to another. It is known that the reference groups influence both the
product and brand notions.

Social role and status

A person belongs to several groups: family, groups, organizations. The
person’s position in each group can be defined from the role’s perspective and,
also, from the status’ perspective.
The individual’s role presumes those activities that must be fulfilled. A
certain status is assigned to each role, which reflects the general respect society
has for a person.

5.2.3. Cultural factors

Culture is a set of beliefs and values shared by the most subjects within a
group. It grounds the individual desires and behavior. Culture is transmitted from
a subject to another, from one generation to another; it is acquired and, thus, is
both subjective and arbitrary. Cultural differences are obvious among people or
groups of people.
Culture arises from a society’s experience, traditions, goals and ambitions.
Each individual is socialized by means of the spread culture, whose values and
standards are part of each person’s motivation, personality and lifestyle.
Socialization is a process which incorporates the individual within the
community.

48
 Elementary
Experience values Traditions Goals

Socialization

Culture
Cultural standards Value judgement

System of
perceived
value

Behavioral Perceived
standards necessity and
desires

Actual priorities,
attitudes and
behaviour
Picture 5.3 – Cultural impact upon individual behavior
Source: A.R. Morden – Elements of marketing, The Guernsey Press Co. Ltd, London, 1994, p. 63.

The secondary culture is a set of beliefs shared by a sub-group within the

main culture. The secondary cultures comprise nationalities, religions, ethnic
groups, geographical regions. Although a sub-group adopts most beliefs within
the main culture, it will have a particular set of beliefs which may disagree with
those within the main culture.
Culture can change along the years, but such changes are slow as culture has
strong roots within the human behavior. From the marketing specialist’s
perspective, it is a lot easier to work for an exiting culture than to try changing it.

Social class
Almost each society has a certain social structure. The social classes are the
society’s relatively permanent and regular divisions, whose members have similar
values, interests and behaviors. The social class is not characterized by a sole
factor, such as income, but it is based on a combination of several factors:
profession, education and residence areas. Some social classes are different
among them with respect to adopted dressing code, language, preferences and
other characteristics.
The social classes are different worldwide; the classes’ relative size is
determined by the countries’ economical development degree. The “diamond”
type classification (the larges part of the population is comprised by the middle
part) is characteristic for the developed countries, although the structures for

49
Scandinavian countries or Japan are more uniform (see table below). The
“pyramid” type structure is characteristic for less developed countries, where the
poor represent the pyramid’s base.

Table 5.1 − Classification of the social-economical groups

Class name Social status Family leader profession
A Superior middle class Superior managing, administrative or
professional positions
B Middle class Intermediary managing, administrative or
professional positions
C1 Inferior middle class Inferior supervising, religious or administrative
positions
C2 Skilled working class Skilled working force
D Working class Semi-skilled or unskilled working force
E Population at the lowest Certain classes of retirees, widows who have no
subsistence level income but the welfare, seasonal and unskilled
working force
Source: J. Blyte – Consumer’s behavior (translation), Editura Teora, Bucureşti, 1999, p. 117.

Certain social classes have a higher impact upon the purchase and consumption
behavior than other classes. In most Western countries, the inferior classes can prove
a higher mobility, having a purchase behavior similar with the one of the superior
classes. Superior classes are less influenced by the cultural aspects when they select
products and services while the inferior classes are usually more related to the cultural
aspects. The cultural factors have a low influence upon the young people within all
social classes when the said choose products or services.

5.2.4. Psychological factors

The shopping decision is influenced by a series of important psychological
factors: motivation, perception, learning, beliefs and attitudes.

Motivation
Everyone has more needs at a given moment. Some of them are biogenic,
arising from physiological conditions (hunger, thirst, etc). Other needs are
psychogenic, arising form psychological conditions, such as the need for
appreciation, esteem or group membership. The reason is a sufficient pressing
need for making the person act and the need fulfillment reduces the tension felt.
The motivations can be classified as per the table below:

50
 Table 5.3. − Classification of the motivations

Primary motivations The reason entailing the purchase of a product from a certain class.
For instance, the need to buy a car for replacing the old and used
one.
Secondary motivations Motivations entailing the purchase of a certain brand.
Rational motivations Motivations entailed by reason and logical assessments of the
consumer’s condition. For instance, the consumer may feel the
need of having a car for transporting his four children.
Emotional motivations Motivations related to the consumer’s ideas about a brand. For
instance, the consumer may purchase a sport car despite the need
of buying a car for his four children.
Conscious motivations Motivations acknowledged by the consumer.
Latent motivations Motivations which operate at unconscious level. For instance, the
consumer may not acknowledge that the desire of having a sport
car is related to the middle age crisis.
Source: J. Blyte – Consumer’s behavior (translation), Editura Teora, Bucureşti, 1999.

It can be assessed that the emotional and latent motivations usually go

before the rational and conscious motivations.
The consumers are driven by the desire to fulfill their needs. The marketing
specialists define need as perceived lack. This definition states that not the mere
lack, but its fulfillment by the subject generates the need occurrence.
Psychologists have issued various theories about human motivation. Three
of the most known – the theories of Sigmund Freud, Abraham Maslow and
Frederic Herzberg – have different implications regarding the study of the
consumer’s behavior and the issuance of the marketing strategies.
Freud’s theory claims that the real psychological forces which determine the
human behavior belong, at a great extent, to the subconscious. He sees the person
growing up and managing to repress many impulses. Such impulses are never
removed or entirely controlled; they appear in dreams, in the neurotic and
obsessive behavior and, at last, in psychosis. Herewith, Freud suggests that people
cannot fully understand their own motivations.
Abraham Maslow has attempted to explain the causal relation between needs
determining people to act in a certain way and the moment when such needs occur.
Maslow deems that the human being’s needs are on a hierarchical scale – the pyramid
of needs – starting form the most pressing ones and finishing with the less pressing.
They are, from their significance perspective, physiological, safety, social, respect
and self-fulfillment needs. Any person will try at first to fulfill the most important
needs. Once an important need is fulfilled, it ceases to represent a motivational factor
and the person in question will try to fulfill the next need in terms of significance.

51
 Self-fulfillment

Self-respect

Social needs

Security needs

Physiological needs

Picture 5.5. – Hierarchy of needs according to Maslow

Source: Ph. Kotler – Marketing management, Editura Teora, 2000, p. 241.

Maslow’s hierarchy does not stand for all cultures. The Anglo-Saxon culture
deems that self-accomplishment and personality are above anything else, but such
values are not universally applicable. In Japan and the Germanic countries, people
are highly motivated by the personal security and comfort need while in France,
Spain, Portugal and other Latin countries, people are motivated by the need for
security and group membership.
The hierarchy of the human needs issued by Maslow is used on wide scale
in order to explain motivation in fields such as the management of the human
resources. Related to the consumer’s behavior, the theory may help explaining the
increase of the personal holidays, the increase of the popularity of sports such as
tennis and ski or the increase of the interest for experiments such as bungee-
jumping.
Frederick Herzberg has issued a motivation theory grounded upon two
classes of factors. The first class comprises factors which entail dissatisfaction,
and the second factors which generate satisfaction. This theory has two
implications: firstly, sellers should take all the necessary steps in order to avoid
dissatisfaction factors, such as an unsatisfactory documentation regarding the
product, maintenance poor quality; although such factors do not sell a product,
they can easily generate the decision for giving up the respective purchase;
secondly, the manufacturer must identify the main satisfaction factors or the
purchase motivation upon the respective market and to take them into account.
A significant element related to the consumer’s motivation is the hedonism.
The hedonism is the cult of pleasure, theory issued by the followers of the
philosophical school in the ancient Greece, who proclaim pleasure and delight as
a supreme asset and the life’s goal. In terms of consumer behavior, the hedonism
defines the field related to the pleasure of having a certain product. For instance,

52
the car-manufacturers are preoccupied with designing doors which, when closed,
sound that pleasant and unmistakable pawl. This procedure has no use, being
meant to generate a safety feeling (usually, the hedonistic traits are deliberately
taken into account staring from the design stage).
It is not surprising the fact that the products’ hedonistic traits make people
buy them. The human species, overall, has overcome the daily surviving issues.
The world is ready to pay a small amount for amusement, entertainment and for
the pleasure of living.

Perception
Perception is the process by means of which a person selects, organizes and
interprets the received information in order to create an image of the surrounding
world. Perception is not exclusively based upon sensorial inducements, but also
upon the relation between such inducements and the surrounding environment.
People can make different opinions when they are subject to an identical
inducement due to the influence of three perception processes: selective attention,
selective distortion, selective memory.
The selective attention. The selective attention is people’s tendency to
protect themselves from most information they receive. People are exposed to a
series of inducements everyday. For instance, a person can be exposed to more
than 1500 advertisements daily. It is impossible for a single human being to pay
attention to all these inducements. This compels the market operators to make
great effort to make people heed.
The selective distortion refers to the people’s tendency to give information a
personal significance. People tend to construe information according to what they
already believe about something. The selective distortion implies the marketers’
knowledge regarding the consumer’s way of thinking and how such situation
influences the information construal.
The selective memory means remembering the information which supports
people’s attitudes and opinions.
The law of Weber proves that the change’s dimension depends on the
inducement’s capacity. This means that a very powerful inducement will entail a
change of dimension if such fact is perceived by the consumer.

Learning
Learning does not refer only to institutionalized education. At a high extent,
behavior is formed through learning, as outcome of external experiences; the most
part of knowledge is learnt outside school.
The consumption habit is learnt par excellence. The British were not born
with culinary tastes for fish and chips just as the Koreans do not enjoy by birth the
meat of stewed dog or the Italians – the horse meat. Learning is highly significant
for marketers given that the consumers are influenced by what they learn.

53
 Learning is defined as the amount of the behavioral changes which occur in
time, subsequently the conditioning of an external inducement.
The research of the learning process displays two main approaches: firstly,
there is the inducement-response approach which implies the classical
conditioning and the active one; secondly there are the knowledge theories which
deem that aware thinking plays an important part.
The classical learning theory has been discovered by the Russian scientist
Pavlov. His experiments on dogs have proven that automatic responses (reflexes)
can be learnt.
The classical conditioning is also valid for human subjects. Using country
music in an advertisement for Levi’s jeans is a classical conditioning example.
The repeated contact with advertisement makes the subject associate the music
with the product. Such phenomenon has double implication: on one hand, if the
client likes the music, the emotional condition will include the product and, on the
other hand, the consumer will remember the Levi’s anytime they hear the music.
The classical conditioning deems that the subject does not play an active
part in the learning process. Pavlov’s dog had noting to do in order to be
conditioned given that the process was based upon the saliva’s involuntary reflex.
Although the classical conditioning is also valid for human subjects, they are
capable of attending the process, cooperating or avoiding it. This sort of process is
called active conditioning. The difference is that the subject has the possibility to
influence the response.
The knowledge theory is related to the cognitive learning. The process is
always lowered to the automatic response to an inducement. People analyze the
situation occurring during the purchase process by taking into account previous
experiences and they assess.
Taking into account the cognitive learning process, there must be said that
the emphasis is not put on what is learnt (as in the inducement-response theory),
but on how this process take place.

Beliefs and attitudes

By action and learning, people form certain beliefs and attitudes. They, on
their turn, influence people’s purchase behavior. Belief is the idea that a person
has about a certain thing. Beliefs can be based upon real knowledge, opinions,
trust; they can have or not an emotional weight.
Attitude is given by a person’s relatively consistent assessments. Their
feelings and preferences for an object or an idea. Attitudes make people like or
dislike a thing. A person’s attitudes form in a special way, the change of a single
attitude involving major adjustments at the level of the other attitudes. Therefore,
marketers should rather adjust the product to the already existing attitudes and not
the other way around. There are also exceptions when major expenses are worth

54
making entailed by the attitudes’ change.

5.3. Stages of the purchase process

Marketers study very carefully the purchase decision making process, focusing
on the individual in order to pursue how changes occur and how new factors
influence (occurred under different stages of the purchase process) the purchase
process. They will try to find out from the consumers when they have found out about
the respective products and brands, which are their favored brands, which is the
involvement degree regarding the product, the criteria taken into account for selecting
a product and how satisfied they are after the product purchase. The consumer fulfills
several stages, which are different for each purchase act depending on the importance
and complexity of the purchase act; in case of minor acquisitions, some stages do not
exist.
In general, a consumer passes successively by five stages of the purchase
process: need identification, information gathering, alternatives’ assessment,
making the purchase decision and post-purchase behavior.

Need Information Alternatives’ Purchase Post-purchase

identification gathering assessment decision behavior

Picture 5.5. – Stages of the purchase decision making

Source: Ph. Kotler – Marketing management, Editura Teora, 2000.

1. Need identification
The purchase process starts when the consumer identifies a need which can
express itself as a result of an internal or external inducement. In the first case, an
individual’s natural need (hunger, thirst, etc.), which exceeds a certain threshold,
becomes pressing and must be satisfied. A need can be also triggered by an
external inducement: hunger can be triggered by the presence of fresh bread.
Therefore, marketers must discover all the inducements able to make the
buyer desire the company’s product and accordingly to issue the most appropriate
promotional strategies.

2. Information gathering
The information gathering occurs as distinctive stage of the purchase
process only in certain cases. If the need expresses itself highly intense and the
asset for satisfying it is clearly defined and accessible for the consumer, it can
make the consumer buy it immediately, skipping this stage.
In other cases, the consumer will heed the information that might help in
finding ways to cover it. Therefore, the consumer will not be satisfied with

55
receiving information, but will try to find the data regarding the brands available
on the market, the advantages and disadvantages regarding the functional traits.
The consumer’s informative sources can be classified as follows:
• Personal sources: family, friends, acquaintances, co-workers;
• Experience related sources: product use, etc;
• Commercial sources: advertisement, sales personnel, packages, flyers;
• Public sources: mass-media etc.
The number and influence degree of such informing sources differ
according to the products and the buyer’s personal traits.
The marketing operators must take into account the existence and features
of each informing source in order to find out how the consumers discover the
products, which are the existing informing sources which influence most
decisions.

3. Alternatives’ assessment
After being informed about the products and brands existing on the market,
the consumers face several purchase alternatives. It is very important for
marketers to know the mechanism according to which the consumer develops the
assessments grounding the purchase decision. Therefore, they work with several
notions: attribute, attribute importance, perception, etc.
Regarding the attribute notion, it is important that a consumer is not happy
knowing only if the product is good or bad, but the product is compared with
other products taking into account several traits. However the attributes are not
equally considered, a certain market being divided according to certain attribute
groups.
The importance of the significant attributes must be assessed and known.
Not all the product’s traits taken onto account by the consumer are also
significant. Some of them are recalled by the consumer due to an advertisement or
prior discussion. Therefore, the market operator must discover which attributes
are really important for consumers and which are mechanically recalled.
The consumers’ perception upon products help them create an image, which
can or not fit the reality. Therefore, marketers must build utility functions which
would describe the satisfaction generated by each trait of the product.
Finally, the consumer will judge the product by means of an assessment
process, namely a brand comparing process in order to select one brand.
When consumers asses their alternatives subsequently the assessment
process, there is a possibility to improve the market position as follows:
 To adjust the brand, respectively the product by implementing new traits,
especially the ones that consumers heed in particular (re-positioning
strategy);
 To change the image of the current brand, influencing the consumers’
perception regarding the brands’ attributes (image re-positioning

56
 strategy);
 To change the beliefs regarding the competition’s brands by means of
comparative advertisement (competitive re-positioning strategy);

4. Making the purchase decision

The phase following the alternatives evaluation is the purchase decision. A
series of social and contextual factors can influence the consumer’s final decision,
among which there is the attitude of the group to which the consumer belongs.
Also, a series of unforeseen contextual factors can make the consumer’s
decision more difficult.
If between the moment of stating preferences for a certain brand and the
moment of actually purchasing certain changes occur (decrease in the consumer’s
incomes, discrediting of the producer before the consumer, unavailability of the
product on the market, special social or family events etc.), the purchase intent
might not turn into a decision.
The risk perceived by the consumer is one of the main aspects of the
purchase action, benefiting from increased attention from the marketing
specialists. The consumer is not absolutely sure if the decision is right, nor what
consequences it might have. That is why the consumer tends to initiate additional
mechanisms, such as the evaluation of the purchase decision’s consequences,
gathering of new information etc. Thus, marketers must identify the factors which
induce the consumer with the feeling of taking a risk and the solutions to diminish
the negative effect of such.
The purchase decision represents a very complex action, comprising more
than the decision or buying or not. By means of the purchase decision other
elements are secured, such as: the quantity to be bought, the purchase place, the
purchase moment, the payment modality etc.

5. Post-purchase behavior
Once the purchase decision is made and the product is bought, the consumer
faces a satisfaction or dissatisfaction feeling, which he expresses in various forms,
depending on his expectations compared to the product’s performances. If such
corresponds to the expectations, then the consumer is satisfied, otherwise he is
disappointed. The expectations of the consumer are a result of the messages of the
manufacturer and marketer of the product; right after the purchase, the consumer
can see any difference in the product’s performances and such results in a
dissatisfaction feeling, which he will express.
Therefore the consumer’s satisfaction or dissatisfaction can be noticed from
the behavior of the one buying the product. Thus, a satisfied consumer will
manifest such feeling in the desire of renewing the purchase action, by advising
the others to do the same. That is why they say that there is no better seller than a
satisfied customer.

57
 The dissatisfaction is manifested by giving up the product having caused
disillusions to the consumer and by discouraging other potential buyers, or even in
more aggressive ways: reclamations, claims with the customers’ protection
agencies for actions against the producing company etc.

5.4. Global Models regarding Consumer’s Behavior

The study and knowing of consumer behavior is of interest to the specialists,
who have tried to explain the consumer’s behavior in view of the mechanisms and
processes operating in the “black box”. Hence, fundamental theories and global
models have emerged, among which the following are the most known: 1
• Pavlovian Model;
• Freudian Model;
• Marshallian Model;
• Hobbesian Model.
The Pavlovian Model represents a consumer behavior model grounded on
the learning theory. Such model has been inspired by the experiments of I.P.
Pavlov, physiologist and psychologist
Adapted for the purpose of studying the consumer behavior, the Pavlovian
model is grounded on three concepts: drive, suggestion, reaction, and relapse.
Drives are needs, reasons, aspirations of strong stimuli associated to the
individual, urging him to act. They can be: primary (hunger, thirst, coldness etc.)
and acquired (learned).
Suggestions represent the result of weaker stimuli, characteristic to both the
environment and the individual, making decision in respect with the subject’s
reaction.
Relapse consists in enhancing a certain reaction, but only to the extent in
which the experience measures up to the individual’s expectations. Due to the
way in which they form, learned reactions can be generalized (meaning the same
learned reaction can be provoked by similar suggestions configurations).
It is mentioned that the Pavlovian model does not include important
phenomena regarding the consumer’s behaviour, such as perception, influences
between individuals etc.
The Pavlovian model demonstrates that by repetition and reinforcement
people can be conditioned to react by certain behaviour. Suggestion
configurations can be designed aimed to modify the behaviour in an intended
way.
The Freudian Model has been designed grounded on the psycho-analytical
theory of S. Freud having as object the human being.
Grounded on such model, the consumer behaviour is approached in view of

1
V. Balaure – quoted paper, pages 180-186

58
mechanisms explaining this process in relation to biological and cultural elements.
The Freudian model requires for motivational research. The scientific
approach of motivation is grounded on deeming such as an ongoing dynamic
process. In this view of the gnosiology related approach the motivational research
stresses the study of attitudes. In order to evaluate attitudes, the social psychology
has set up an index system: the attitude direction (which can be a positive, neutral
or negative one), the attitude strength, its centrality in the subject’s structure, its
coherence and specificity, the attitude emergency (regarding the appropriateness
of the attitude and the demands of the environment in which the individual
develops).
The Marshallian Model, named after its designer – A. Marshall – accredits
the theory according to which the purchase decisions, as well as the actual
purchasing of goods and services represent the effect of rational and conscious
calculation.
The Marshallian model brings into discussion the matte of economical
factors in general, in order to explicitly test various behavioral reactions and of
providing a fundament for applying segmentation or typology criteria.
The Hobbesian Model of consumer behavior, also referred to as
organization factors model, brings into view the goods and services purchase for
institutionalized collective entities. Such model suggests two different stand
points: preponderance of rational reasons, regarding the organizational interests
and the preponderance of personal reasons.

5.5. Organizational purchase behavior

Marketing does not limit its actions over product on an individual consume
level, but it also takes into account companies selling industrial goods,
organizations and institutions.

Particularities of organizational buyers

Organizational purchase represents the decisional process by means of
which organizations establish their need for products and services which are to be
purchased, and various suppliers brands are identified, assessed and selected.
Business market comprises all organizations purchasing goods and services
used in order to manufacture products or services which are then sold, rented or
supplied to others. The main areas forming the business market are agriculture,
forestry, mining, manufacturing industry, constructions, public services,
transportation, financial and banking area, trading.
The business markets have certain features by means of which consume
markets are differentiated:
• The number of buyers is much smaller; the financial situation of the
production factors suppliers depends on several beneficiary companies,

59
 which orient their demand towards such;
• The relations between suppliers and beneficiaries are very tight, this
aspect being favored by the small number of buyers, and partnership
relations can be reached;
• The purchases made by a single client are much more important than
those on the consume products market;
• Purchases on industrial market are made by professional buyers, who are
purposefully trained and who must comply with supply strategies of the
organization, with the organizational constraints and prerequisites.
In making purchase decisions more persons are involved than in the case of
consume goods. Buying important goods is something to decide in purchase
committees or commissions.
A certain geographical localization can be noticed of the industrial markets,
which influences the selling expenses at the suppliers.

Factors influencing the consumers

Relations between companies are subjected to the influence of specific
factors regarding environment, organization method, interpersonal relations etc.
a) The most important environmental factors are: demand level, economical
context, interest rate, technologic progress rate, competition development,
political and administrative context etc.
b) The organizational factors are those reflected in certain objectives,
strategies, structures, defining the operational framework of organizations and
which are subjected to the control of such. Decisions regarding industrial
purchases depend to a great extent on the way in which the authority is
distributed, the remuneration modality, the way in which communication is
performed within the company.
c) Interpersonal factors are those influencing the way in which purchases
are made. Usually, the purchase center is formed of more participants, each
having its own interests, authority levels, statute, understanding ability and
persuasive capacity. It is not very probably for the supplier to know what type of
group dynamics interferes with the purchase decision making process; however
any information one might obtain in respect with personality related factors could
be useful. Of extreme importance there are information regarding customers’
relations with sales representatives of other suppliers.
d) Individual factors influence the behavior of those involved in making
decisions regarding industrial goods purchases, which is why such factors need to
be known and used in favor of the suppliers.

Making the purchase decision

The decisions regarding industrial goods purchases are planed and made in

60
purchase centers or buying centers. Such groups are formed of the company’s
human resources undertaking at least one of the following roles:
- User, which is the one who will use the purchased good in order to
produce other goods; this capacity is usually held by those initiating the
manufacturing project and drafting tenders descriptions;
- Prescription maker, which is the person directly or indirectly influencing
the purchase decision, taking part in drafting tenders descriptions and
suppliers selection;
- Counselor, which is the person consulted in regard with the
appropriateness of the purchase action;
- Buyer, which is the direct participant to trading negotiations, to
concluding the trading contract;
- Decision maker, which is the person actually having the power of
deciding in respect with the suppliers, quantities to be purchased,
acquisition moment etc;
- Informer, which is the person in charge with communication between the
companies involved in carrying out transactions.

Phases in the purchase decision making process

Making the purchase decision implies the fulfillment of several phases, such
as: identifying the problem, general description of the need, setting up the
product’s specifications, selecting the suppliers, selecting the ordering procedure,
evaluating the results.
Information Alternatives Decision
gathering: evaluation: making:
- features - suppliers
Identifying - identifying selection Post-
description
the need suppliers - ordering purchase
- product
- analyzing procedure
specification
proposals
behavior
- sources selection
analysis - results
evaluation

Fig. 5.6 – Phases in purchase decision making process

Source: adaptation of Ph. Kotler – Marketing Management, Teora Publishing House, 2000

1. Identifying the purchase need is generated by a series of internal and

external factors, such as: launching a new product for being
manufactured, registering certain manufacturing faults due to the used
raw materials or materials.
2. Describing the product’s features represents the operation following the
occurrence of a need, the difficulty of which is different from one
production factor to another. For this purpose one must use a series of
specialists, from which information are obtained regarding feasibility,

61
 price, supply expenses etc.
3. Product specification is made by using certain methods, among which
the most known is the value analysis. By using this method, the person in
charge with purchases will focus on the most expensive components of
the product, trying to find any means for reducing the expenses without
affecting the basic functions of such.
4. Identifying potential suppliers is aimed to find the most convenient
supply sources, for this purpose being used yearly books and any other
information source.
5. Offer request. Once the suppliers are identified, they are requested to
submit their offers. In the cases of complex or expensive items, the buyer
can request a detailed written proposal from each admitted supplier.
6. Suppliers selection is made grounded on several criteria sorted by their
importance (price, renown, process feasibility, supplier flexibility etc.).
7. Ordering procedure selection represents the phase in which technical
details are specified, as well as necessary quantity, requested guarantees,
delivery dates, way of allocating transport-insurance-movement expenses
etc.
8. Evaluating results represents the operation in which the buyer analyses
the performances of selected suppliers. The evaluation of the way in
which the products satisfy or not the users’ demand is made by means of
special researches (for instance, polls).
The complexity of the process of making purchase decision for industrial
goods also depends on the importance of the purchases. The most complex
situation is the one of new purchases, in which more persons are involved, having
various specializations and different decision making competencies.

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