Predicting patterns of consumer behavior can be difficult. To
date no one has developed a perfect model as each has its own particular
short-comings. The Dirichlet model is well-established that both describes and
predicts purchasing behavior patterns in stationary markets. The researchers
McCabe, et. al. (2012) focuses on the success of the model for companies trying
to gain market share.
It should be first understood that all purchasing is based
in habits of purchase. Customers follow certain patterns based upon how they
associate the information among competing brands. Marketing nudges individuals
to make one choice over another to expand their repertoire of purchasing
behaviors. Strong marketing creates memories that become associated with
products and services.
Structural changes in behavior can occur when changes force
choices beyond day-to-day decisions. Even though industrial marketing and
purchasing is long-term and stable it can change. These changes usually are a
result of introduction and reminding of products during purchasing cycles. For
consumers, original patterns of purchasing can return right after promotion and
therefore be short-lived changes.
The authors used a collaborative procurement to understand
the purchasing power of an organization that spends 20 billion pounds on
third-party products. They observed purchasing behavior over a 12 week period
to determine penetration, frequency and share of category by particular
suppliers. They found some switching
patterns among suppliers in term of amount and quantity of purchases.
Supplier B increased market share at the company over
Supplier A. Even though there were no new products or services offered that
would attract purchasers it was found that Supplier B invested in its regional
sales force prior to the change. The Dirichlet model did well with predicting
market changes before, during, and after marketing campaigns. Even when it was
not accurate it worked as a benchmarking tool.
Comment:
Marketing is a process of raising a company’s voice within a particular market.
The more different the culture of the target market to that of the parent the
more difficult it is to find the right voice. When done properly consumers will
have more memories of the product/service which raises their chances of making
a purchase. Some advertisements can create motivation based upon the individual
needs of the consumer. Purchasing managers are not immune to the same needs,
motivations, and memory processes as general consumers. They only become more
sophisticated in how they process the information and make decisions.
McCabe, J. (2012). The power of before and after-How the
Dirichlet can analyze the sales impact of promotional activity. Journal of Advertising Research, 10.
