6
 
 Analyzing
Business Markets
 

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 and how are buying decisions
made?
 How can marketers build strong relationships
with
  business customers?

6-2
 

What is a Business Market?

Business market consist of individuals and
organizations that buy goods and services for
further production, resale, re-rent, re-
distribution, etc.

6-3
 

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.

6-4
 

Characteristics of
Business Markets
 Fewer buyers  Multiple sales calls
 Larger
  buyers  Derived
  demand
 Close
  supplier-  Inelastic
  demand
customer
  relationships  Fluctuating
  demand
 Professional  Geographically
 

purchasing
  concentrated
  buyers
 Many buying  Direct purchasing
influences
   

6-5
 

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 service
commoditization
 

 Convincing C-level executives to embrace the

marketing
  concept

6-6
 

Institutional and Government

Markets

6-7
 

Buying Situations

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

Modified
Modified re-buy
re-buy

New
New task
task

6-8
 

Systems Buying and Selling

Turnkey solution System

desired; subcomponents
Bids solicited assembled

Prime Second-tier 
Contractors Contractors

6-9
 

Sales Strategies

Key Buying
Small Sellers Influencers

Multilevel
Large Sellers In-depth
Selling

6-10
 

The Buying Center 

 Initiators   Approvers
 Users
   Buyers
 

 Influencers
   Gatekeepers
 

 Deciders
   

6-11
 

Stages in the Buying Process:

Buyphases New Modified Straight
task rebuy rebuy
1. Problem recognition Yes Maybe No
2. General need Yes Maybe No
description
Yes Yes Yes
3. Product specification
Yes Maybe No
4. Supplier search
5. Proposal solicitation Yes Maybe No

6. Supplier selection Yes Maybe No

7. Order-routine Yes Maybe No
specification
Yes Yes Yes
8. Performance review
6-12
 

Supplier Search:
Forms of Electronic Marketplaces
 Catalog sites
 Vertical
  markets
 Pure
  play auction sites
 Spot
  markets
 Private
  exchanges
 Barter
  markets
 Buying
  alliances
 

6-13
 

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
 

Supplier Selection:
 An Example of Vendor Analysis

6-15
 

Order Routine Specification

Stockless
purchase plans

Vendor-managed
inventory

6-16
 

Building Business Relationships:

Establishing Corporate Trust
and Credibility

Expertise

Trustworthiness Likeability

6-17
 

Trust Dimensions

Cooperating
Transparent
Design

Product/Service Product
Quality Comparison

Incentive Supply Chain

Pervasive
Partnering
 Advocacy
6-18
 

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

6-19
 

Factors Affecting
Buyer-Supplier Relationships

 Availability of Importance of 

alternatives supply

Complexity of  Supply market

supply dynamism

6-20
 

Categories of Buyer-Seller
Relationships

 Basic buying and  Cooperative

selling
  systems
 

 Bare bones  Collaborative

 Contractual
   Mutually
  adaptive
transaction
   Customer
  is king
 Customer supply  

6-21
 

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
 

6-22
 

What is Opportunism?

Opportunism is some form of cheating

or undersupply relative to an implicit or
explicit contract.

Opportunities is a concern because firms

must devote resources to control and
monitoring that otherwise would be allocated
to more productive purposes.

6-23