7

Analyzing
Business Markets

Marketing Management
A South Asian Perspective, 13th ed
 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-to-
business 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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 CISCO Targets Businesses

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 What is Organizational Buying?

Organizational buying refers

to the 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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 Top Business Marketing Challenges

• Expand understanding of customer needs

• Compete globally as China and India
reshape markets
• Master analytical tools and improve
quantitative skills
• Reinstate innovation as an engine of growth
• Create new organizational models and
linkages

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 Characteristics of Business Markets

• Fewer, larger • Multiple sales calls

buyers • Derived demand
• Close supplier- • Inelastic demand
customer • Fluctuating demand
relationships
• Geographically
• Professional
concentrated buyers
purchasing
• Direct purchasing
• Many buying
influences

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 Buying Situation

Straight
Straight rebuy
rebuy

Modified
Modified rebuy
rebuy

New
New task
task

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 Systems Buying and Selling

Turnkey solution System

desired; subcomponents
bids solicited assembled

Prime Second-tier
contractors contractors

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 The Buying Center
Initiators
Initiators

Users
Users

Influencers
Influencers

Deciders
Deciders

Approvers
Approvers

Buyers
Buyers

Gatekeepers
Gatekeepers
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 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

Key Buying
Small Sellers Influencers

Multilevel
Large Sellers In-depth
Selling

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 Stages in the Buying Process:
Buyphases
• Problem recognition
• General need description
• Product specification
• Supplier search
• Proposal solicitation
• Supplier selection
• Order-routine specification
• Performance review

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 Table 7.2 Buygrid Framework

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 Forms of Electronic Marketplaces

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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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 Table 7.3 Vendor Analysis

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 Handling Price-Oriented Customers

Limit
Limit quantity
quantity purchased
purchased

Allow
Allow no
no refunds
refunds

Make
Make no
no adjustments
adjustments

Provide
Provide no
no services
services

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 Methods for Researching
Customer Value

• Internal engineering • Conjoint analysis

assessment • Benchmarks
• Field value-in-use • Compositional
assessment approach
• Focus-group value • Importance ratings
assessment
• Direct survey
questions

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 Order Routine Specification

Stockless
purchase plans

Vendor-managed
inventory

Continuous
replenishment

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 Establishing Corporate Trust
and Credibility

Expertise

Trustworthiness Likeability

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 Figure 7.1 Trust Dimensions

Cooperating
Transparent
Design

Product/Service Product
Quality Comparison

Incentive Supply Chain

Pervasive
Partnering
Advocacy
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 Factors Affecting
Buyer-Supplier Relationships

Availability of Importance of
alternatives supply

Complexity of Supply market

supply dynamism

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 Categories of Buyer-Seller
Relationships

• Basic buying and • Cooperative

selling systems
• Bare bones • Collaborative
• Contractual • Mutually adaptive
transaction • Customer is king
• Customer supply

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 What is Opportunism?

Opportunism is some form of

cheating or undersupply relative to
an implicit or explicit contract.

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 Marketing of Farm Output from
Rural Areas

• Contract Farming – Pepsi

• Procuring from Cooperatives – Amul
• Use ICT for procurement – ITC

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 Marketing Debate
 how different is B-to-B marketing?
Take a position:
1. Business-to-business marketing
requires a special, unique set of marketing
concepts and principles.
or
2. Business-to-business marketing is really
not that different and the basic marketing
principles apply.

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 Marketing Discussion

 Consider some of the consumer

behavior topics from Chapter 6.
 How might you apply them to business-
to-business settings?

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