MARKETING MANAGEMENT 12th edition

7 Analyzing Business Markets

Kotler

Keller

Chapter Questions • What is the business market, and how does it differ from the consumer market? • What buying situations do organizational buyers face? • Who participates in the business-tobusiness buying process?

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Chapter Questions • How do business buyers make their decisions? • How can companies build strong relationships with business customers? • How do institutional buyers and government agencies do their buying?

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SAP’s software applications automate business functions

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Organizational Buying

Decision-making process by which formal organizations establish the need for purchased products and services, and identify, evaluate, and choose among alternative brands and suppliers.

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Characteristics of Business Markets • Fewer, larger buyers • Close suppliercustomer relationships • Professional purchasing • Many buying influences • Multiple sales calls

• • • •

Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers • Direct purchasing

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Buying Situation Straight rebuy

Modified rebuy

New task

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Systems Buying and Selling Turnkey solution desired; Bids solicited

Prime Contractors

System subcomponents assembled

Second-tier Contractors

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The Buying Center Initiators Users Influencers Deciders Approvers Buyers Gatekeepers 7-9

Of Concern to Business Marketers • • • •

Who are the major decision participants? What decisions do they influence? What is their level of influence? What evaluation criteria do they use?

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Sales Strategies

Small Sellers

Key Buying Influencers

Large Sellers

Multilevel In-depth Selling

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Types of Business Customers

Priceoriented

Solutionoriented

Goldstandard

Strategicvalue

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Handling Price-Oriented Customers Limit quantity purchased

Allow no refunds

Make no adjustments

Provide no services

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Kodak offers services that streamline processes for hospital administrators

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Purchasing Orientations Buying

Procurement Supply Chain Management 7-15

Product-Related Purchasing Processes Routine products Leverage products Strategic products Bottleneck products

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Table 7.1 Buy-grid Framework

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Figure 7.1 Organizational Buying Behavior in Japan

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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

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Forms of Electronic Marketplaces

•Catalog sites •Vertical markets •Pure play auction sites •Spot markets •Private exchanges •Barter markets •Buying alliances 7-20

Table 7.2 Vendor Analysis

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Assessing Customer Value • Internal engineering assessment • Field value-in-use assessment • Focus-group value assessment • Direct survey questions

• Conjoint analysis • Benchmarks • Compositional approach • Importance ratings

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Order Routine Specification and Inventory Stockless purchase plans Vendor-managed inventory Continuous replenishment 7-23

Desirable Outcomes of a B2B transaction: OTIFNE

OT On time IF In full

NE No error

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Establishing Corporate Credibility

Expertise

Trustworthiness

Likeability

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Factors Affecting Buyer-Supplier Relationships

Availability of alternatives

Importance of supply

Complexity of supply

Supply market dynamism

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Categories of Buyer-Seller Relationships • Basic buying and selling • Bare bones • Contractual transaction • Customer supply

• • • •

Cooperative systems Collaborative Mutually adaptive Customer is king

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Opportunism

Some form of cheating or undersupply relative to an implicit or explicit contract.

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Aramark successfully services institutional and government markets

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Marketing Debate  How different is B-to-B Marketing? Take a position: 1. B-to-B requires special, unique marketing concepts and principles. 2. B-to-B is really not that different; basic marketing concepts apply. 7-30

Marketing Discussion

 How might we apply the consumer behavior topics from Chapter 6 to B-to-B settings?

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