Bargaining power of buyers Essay
As a manufacturing firm dealing in lawn equipment , Sears-craftsmen has different types of buyers who may purchase directly from the firm or indirectly through their agents .buyers consists individuals ,households organizations and companies who create demand in an industry. Buyers makes the important stakeholders to the firm and hence the need to take keen and intelligent survey in order to make sure that all the output of the firm not only reach the end users but also met their individual needs .Organizational buyers have become an important and should be recognized by Sears –Craftsman company .
As a leading manufacturer there is a need to have a working relationship with these buyers since they contribute half of the demand for lawn equipment. Seas equipment has different of lawn equipment which includes lawnmowers, sting hammers, brush cutter, chainsaws amongst others.The organizational buying groups are divided into two groups. The first group includes large scale users who are also known as professional users .The group consists of small gardening companies who maintains residential gardens, large corporations that maintain their own grounds and large companies that serve golf course and local authorities .The second group is the small scale users who are known as residential end users. These are family members who maintain their gardens using the lawn equipments. These customers make decisions based on price and credit available to them,Professional users account for between 25%-30% of the total end user market.
They are namely in two groups, small gardening firms and large corporations. Small gardening firms purchase the equipment based o the price and credit. In order to tap this market the firm should produce equipments which are diverse and cheaper so as to enable many buyers as possible to assess their products. This will lead to an increase in volume of sales and also get more customers. However quality should not be compromised as this may lead to customers’ mass exodus from the product of the company due to poor quality.Residential end-users found in densely populated areas where land is premium. In this areas family member usually maintains these gardens the company should manufacturer cheaper version of their products which are also easy to use and maintain since it might be costly to keep track of all the customers. Most large firm do purchase large machine which require some maintenance to be done by the firm.
Since these firms are not wide spread, the company should have mechanical engineers who are specifically employed to maintain the goods for the customers once they are sold to the customers. This will improve customer relations and also create customer loyalty.Process of sourcing new products by these organizations can be summarized as follows. The first stage is for the customer to become aware of the new product although he still has no knowledge of the product. Secondly, they develop interest in the new equipment by seeking information about the new product. Once this is done they will evaluate the product by trying it out to know whether it makes sense .After evaluation these buyers will the equipment in small scale to improve his or her estimate on the value of the product. Lastly the potential customer will decide to make full and regular use of the new product ( Olsen, 2006).
Factors which will influence the buyer decision to purchase the lawn equipment are as follows, cultural factories which comprises social class and subculture, social factors which includes reference groups, Family roles and statutes. Personal factors also plays significant role in determining the decision of the buyer. These factors includes lifecycle stages ,occupation, economic circumstances ,lifestyle , personality and self concept .Psychological factors which includes motivation , learning , beliefs and attitude .All these factories should be assessed for their significance and marketing activities assessed in order to enable the form understand the customers better.
In order to understand competitors well you have to carry out competitive analysis .this is an exploration of the companies in the manufacturing and distribution of the lawn equipment, the company must understand what the competitors are doing. What they are offering to the customers and how to create and maintain competitive advantage. These findings will helpful in strategic formulation process. The company must build knowledge of all the competitors and their activities; secondly the company will develop best practices by discovering what working will is for the customers.
In the lawn equipment industry it is important to bring out products which are differentiated and adds value to the customers. The distribution process should also be enhanced to allow as many customers to access the equipments and block out competitors without strong distribution network.Buyer groups should be handled with great caution since they may be a threat to the company this can be done setting up of more production factories to increase production thus making sure that the customer do not run out of the product the firm should invest more in research so as to be ahead of the buyer groups on information about the equipments so as to make customers to always seek for information from the firm. These will make the buyers to depend on the firm for information through retaining them as customers.
Customers should also not be allowed to integrate back to the industry by making sure that they still value the firm by making them appreciate the company and its products hence cretin demand for the company goods. ReferenceOlsen, E. (2006). Strategic Planning For Dummies. NY: Dummies publishers.