chapter 6 - analyzing business markets

8/6/2019 Chapter 6 - Analyzing Business Markets

1/23

6 AnalyzingBusiness Markets


2/23

Chapter Questions

What is the business market, and how does it

differ from the consumer market?

What buying situations do organizationalbuyers face?

Who participates in the business-to-businessbuying process and how are buying decisionsmade?

How can marketers build strong relationshipswith business customers?

6-2


3/23

6-3

What is a Business Market?

Business market consist of individuals andorganizations that buy goods and services forfurther production, resale, re-rent, re-distribution, etc.


4/23

6-4

What is Organizational Buying?

Organizational buying refers to the

decision-making process by which formalorganizations establish the need forpurchased products and services, and

identify, evaluate, and choose amongalternative brands and suppliers.


5/23

Characteristics of

Business Markets

Fewer buyers

Larger buyers

Close supplier-customer relationships

Professionalpurchasing

Many buyinginfluences

Multiple sales calls

Derived demand

Inelastic demand

Fluctuating demand

Geographicallyconcentrated buyers

Direct purchasing

6-5


6/23

Top Marketing Challenges

Understanding customer needs in new ways

Identifying new opportunities for growth

Improving value management techniques

Calculating better marketing performance and

accountability metrics

Competing and growing in global markets

Countering the threat of product and servicecommoditization

Convincing C-level executives to embrace themarketing concept

6-6


7/23

Institutional and Government

Markets

6-7


8/23

Buying Situations

Straight re-buy/re-orderStraight re-buy/re-order

Modified re-buyModified re-buy

New taskNew task

6-8


9/23

Systems Buying and Selling

Turnkey solutiondesired;

Bids solicited

PrimeContractors

Second-tierContractors

Systemsubcomponents

assembled

6-9


10/23

Sales Strategies

Small Sellers

Large Sellers

Key BuyingInfluencers

Multilevel

In-depthSelling

6-10


11/23

6-11

The Buying Center

Initiators

Users

Influencers

Deciders

Approvers

Buyers

Gatekeepers


12/23

6-12

Stages in the Buying Process:

Buyphases1. Problem recognition

2. General needdescription3. Product specification4. Supplier search5. Proposal solicitation

6. Supplier selection7. Order-routinespecification

8. Performance review

Newtask

Modifiedrebuy

Straightrebuy

Yes Maybe No

Yes Maybe No

Yes Yes Yes

Yes Maybe No

Yes Maybe No

Yes Maybe NoYes Maybe No

Yes Yes Yes


13/23

6-13

Supplier Search:

Forms of Electronic Marketplaces

Catalog sites

Vertical markets

Pure play auction sites

Spot markets

Private exchanges

Barter markets

Buying alliances


14/23

Methods of e-Procurement

Websites organized using vertical hubs

Websites organized using functional hubs

Direct extranet links to major suppliers

Buying alliances

Company buying sites

6-14


15/23

Supplier Selection:

An Example of Vendor Analysis

6-15


16/23

Order Routine Specification

Stocklesspurchase plans

Vendor-managedinventory

6-16


17/23

Building Business Relationships:Establishing Corporate Trustand Credibility

Expertise

LikeabilityTrustworthiness

6-17


18/23

Trust Dimensions

Transparent

Product/Service

Quality

Incentive

Partnering

Cooperating

DesignProduct

Comparison

Supply Chain

PervasiveAdvocacy

6-18


19/23

Handling Price-Oriented Customers

Limit quantity purchasedLimit quantity purchased

Allow no refundsAllow no refunds

Make no adjustmentsMake no adjustments

Provide no servicesProvide no services

6-19


20/23

Factors Affecting

Buyer-Supplier Relationships

Availability ofalternatives

Supply marketdynamism

Complexity ofsupply

Importance ofsupply

6-20


21/23

Categories of Buyer-Seller

Relationships

Basic buying andselling

Bare bones

Contractualtransaction

Customer supply

Cooperativesystems

Collaborative

Mutually adaptive

Customer is king

6-21


22/23

Methods for Researching

Customer Value

Internal engineering

assessment

Field value-in-useassessment

Focus-group valueassessment

Direct surveyquestions

Conjoint analysis

Benchmarks

Compositionalapproach

Importance ratings

6-22


23/23

What is Opportunism?

Opportunism is some form of cheating

or undersupply relative to an implicit orexplicit contract.

Opportunities is a concern because firmsmust devote resources to control andmonitoring that otherwise would be allocatedto more productive purposes.

6-23

chapter 6 - analyzing business markets

Documents