Commercial Department Functions, Market Analysis, and Consumer Behavior

Posted on Nov 30, 2024 in Economy

The Commercial Department

The Commercial Department facilitates the delivery of consumer goods or services produced by the company.

Key Functions

  • Market Analysis: Providing information for strategic decision-making and policy formulation.
  • Marketing: Designing the company’s trade policy.
  • Sales: Organizing retail sales and managing distribution channels.

Interdepartmental Relationships

Relationship with the Production Department

The Commercial Department requires the Production Department to deliver finished products of a specified quality and quantity.

Relationship with the Finance Department

The financial needs of the Commercial Department require approval from the Finance Department.

Relationship with the Human Resources Department

The Human Resources Department handles employee selection, hiring, training, payroll, social security, and ensures compliance with labor laws.

The Market

Types of Markets

Perfect Competition

  1. Homogeneity of Product: All suppliers offer identical products.
  2. Large Number of Buyers and Sellers: Individual decisions have minimal market impact.
  3. Total Market Knowledge: All participants have full information about market conditions.
  4. Freedom of Entry and Exit: Companies can freely enter or leave the market based on expectations.

Imperfect Competition

Occurs when the conditions for perfect competition are not met.

Monopoly

A single supplier dominates the market.

Oligopoly

A few suppliers control the market.

Monopolistic Competition

Many buyers and sellers with differentiated products.

Demand Concepts

Total Demand and Company Demand

Total demand is the total quantity of a product purchased in a given period. Company demand is the quantity of a product purchased from a specific company during a period.

Market Share

Market share is the percentage of sales a company achieves relative to the total sales of a product.

Market Survey

A market survey involves collecting, processing, and analyzing information about the general environment, competition, and consumers.

Phases of a Market Study

  1. Defining the Research Objective
  2. Designing the Research Model
  3. Gathering Information
    • Internal Company Information: Reports, interviews with executives and management, and distribution data.
    • Official Statistics and Published Data: Yearbooks, sector studies, domestic and international data.
    • Company-Specific Research: Information on competition, customer preferences, and environmental changes.
  4. Classifying and Structuring Data: Using graphs, tables, etc.
  5. Analyzing and Interpreting Data
  6. Presenting Results

Data Gathering Techniques

Primary Data

Unstructured information collected specifically for the study.

Methods

  • Surveys: Personal interviews, postal surveys, telephone surveys, email surveys, and web surveys.
  • Observation: Observing consumer behavior to draw conclusions.
  • Experimentation: Manipulating variables to study consumer reactions.

Secondary Data

Structured and readily available information.

Environmental Analysis

Legal Environment

Understanding the laws regulating economic activity.

Technological Environment

Keeping up with technological advancements affecting the manufacturing process.

Social Environment

Monitoring changes in consumer income, fashions, and tastes.

Economic Environment

Recognizing economic fluctuations such as expansion, recession, and crisis.

Competitive Analysis

Understanding companies that manufacture or market similar products or services.

  1. Identifying competitors.
  2. Gathering necessary information.
  3. Comparing the company’s situation with competitors.

Consumer Analysis

Understanding consumer needs, desires, preferences, and lifestyles.

Buying Habits

Who buys, where they buy, why they buy, when they buy, and how they buy.

Consumer Behavior

Customer Classification by Decision-Making Capacity

  • Physicians: Professionals whose recommendations influence consumer choices.
  • The Buyer: The person who purchases the product.
  • The Consumer: The person who ultimately uses the product to satisfy a need.

Segmentation Criteria

  • Sociodemographic Criteria: Grouping individuals by gender, age, habitat, education level, and household position.
  • Socio-economic Criteria: Grouping individuals by income level, consumption potential, and social class.
  • Psychographic Criteria: Considering individual behaviors and lifestyles.