Professional Documents
Culture Documents
An Asian Perspective,
6th Edition
Instructor Supplements
Created by Geoffrey da Silva
Analyzing Business Markets
3 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
7
Learning Issues for Chapter Seven
1. What is the business market, and how does it differ from the
consumer market?
5 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
What is Organizational Buying?
6 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Business Market versus the Consumer Market
7 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Business Market versus the Consumer Market
8 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Business Markets
9 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Business Market versus the Consumer Market
10 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Business Market versus the Consumer Market
11 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Business Markets
Derived Demand
Business demand is
derived demand. It
ultimately derives from the
demand for consumer
goods. B-to-B marketers
sometimes promote their
products directly to final
consumers to increase
business demand.
12 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Business Market versus the Consumer Market
13 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Business Market versus the Consumer Market
14 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Buying Situations
15 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Buying Situation: Straight Rebuy
16 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Buying Situation: Modified Rebuy
17 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Business Buyer Behavior: Modified Rebuy
18 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Buying Situation: New Task
19 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Business Buyer Behavior: New Task Situation
A company buying a product or service for the first time faces a new task situation. In such cases,
the greater the cost or risk, the larger the number of decision participants and the greater their
efforts to collect information will be.
20 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing Implications of Buying Situations
21 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing Implications of Buying Situations
22 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing Implications of Buying Situations
23 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing Implications of Buying Situations
24 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Boeing’s customers are institutions such as airlines. Even as a business marketer, Boeing is mindful
that its brand stays relevant to customers.
25 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Systems Buying and Selling
26 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
YTL Group in Malaysia: Provide Turnkey Projects
YTL, a construction company, was incentivized to introduce the turnkey concept in Malaysia. It
designed, raised funding for, and built hospitals, universities, residential properties, high-rise office
buildings, industrial facilities, and other infrastructural projects throughout the country.
27 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Systems Selling
28 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Participants in the Business Buying Process
29 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Buying Centre
30 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Buying Centre
31 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Seven Roles in a Buying Center
32 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Seven Roles in a Buying Center
33 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Seven Roles in a Buying Center
34 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Buying Center Roles
35 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Buying Center Influences
• Each member of the buying center is likely to give priority to very different
decision criteria.
• Business buyers also respond to many influences when they make their
decisions.
36 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Buying Center Influences
37 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Buying Center Influences
38 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Targeting Firms and Buying Centers
Successful business-to-business
marketing requires that
business marketers know which
types of companies to focus on
in their selling efforts, as well
as who to concentrate on within
the buying centers in those
organizations.
39 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Targeting Firms
40 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Targeting Firms
41 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Developing Strong Bonds in Business Markets
Unilever – When Unilever started operating in Vietnam, it grew its business by establishing strong
partnerships with five key local suppliers. Initially, the suppliers lacked the financial resources,
technology, quality control, safety and environmental standards to meet Unilever’s standards.
Unilever offered financial support to upgrade equipment and provided extensive training programs
on safety and environmental awareness. Technology transfers were made of machinery and
formulations as well as quality assurance and analytical methods.
42 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Developing Strong Bonds in Business Markets
Unilever – As a result, Unilever’s production lines were set up quickly, easily and at lower costs,
enabling the rapid launch of its products. With some of the production sites close to its customers,
logistical complexities and transportation costs were reduced. Working with these suppliers, Unilever
not only managed to achieve significant sales but also formed relationships with local people who
understood the market in greater detail. This knowledge was vital in establishing its Vietnamese
business.
43 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Targeting within the Business Centre
44 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Targeting the Buying Centre in a Hospital
45 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Targeting within the Business Centre
46 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Advertising Targeting at Hospital Administrators
47 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Purchasing / Procurement Process
48 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Purchasing / Procurement Process
49 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Purchasing / Procurement Process
50 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Developing a Diverse Supplier Base
Pfizer has a supplier-diversity program where it mentors women and minority suppliers.
51 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Purchasing / Procurement Process
52 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Leading mining and exploration company Rio Tinto has worked with its suppliers to streamline the
way it gets paid.
53 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Stages in the Buying Process
54 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Table 7.1: Buygrid Framework: Major Stages
(Buyphases) of the Industrial Buying Process in
Relation to Major Buying Situations (Buyclasses)
55 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Buyphase Stages
a. Problem recognition
b. General need description
c. Product specification
d. Supplier search
e. Proposal solicitation
f. Supplier selection
g. Order-routine specification
h. Performance review
56 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Type of Situations and the Stages in the Buying
Process
57 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Stage 1: Problem Recognition
• Externally, the buyer may get new ideas at a trade show, see an ad, or
receive a call from a sales representative who offers a better product or a
lower price.
58 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Stages 2 and 3:
General Need Description and Product Specification
59 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Stage 4: Supplier Search
60 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Supplier Search on the Internet
61 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Supplier Search on the Internet
62 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Benefits and Limitations of Online Buying
• Benefits:
a. Shaves transaction costs
b. Reduces time between order and delivery
c. Consolidates purchasing systems
d. Forges closer relationships
• Limitations:
a. Help to erode supplier-buyer loyalty
b. Create potential security problems
63 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Challenges of B2B Marketing in Asia
64 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
E-Procurement
65 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
E-Procurement
66 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Lead Generation
67 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Stage 5: Proposal Solicitation
68 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Stage 6: Supplier Selection
69 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Table 7.2: An Example of Vendor Analysis
70 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Evaluating Different Attributes
71 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Evaluating Different Attributes
72 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Customer Value Analysis
73 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Overcoming Price Pressures
74 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Overcoming Price Pressures
75 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Number of Suppliers
76 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Number of Suppliers
77 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Stage 7: Order-Routine Specifications
• After selecting suppliers, the buyer negotiates the final order, listing
the technical specifications, the quantity needed, the expected time
of delivery, return policies, warranties, and so on.
78 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Order-routine Specifications
79 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Order-routine Specifications
80 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Stage 8: Performance Review
81 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Managing Business-to-Business Customer
Relationships
82 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Managing Business-to-Business Customer
Relationships
83 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Developing Business Relationships in the Asian
Context
• When hiring, for instance, school affiliation and age are important
factors that are considered besides merit. The relationships among
individuals cultivated through affiliation to the same school, region,
or family create strong societal ties that bind these individuals to
their communities, and in turn extend to a sense of obligation to
the workplace.
84 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Developing Business Relationships in the Asian
Context
• Finally, title is regarded highly in Asia. With title comes respect and
“face”, which matter a lot in Asian society.
85 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
The Benefits of Vertical Coordination
86 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing Insight: Establishing Trust and Credibility
87 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing Insight: Establishing Trust and Credibility
88 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing Insight: Establishing Trust and Credibility
89 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Forces Influencing the Development of Relationships
between Business Partners
90 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Classification of Buyer-Supplier Relationships
(8 Categories)
91 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Classification of Buyer-Supplier Relationships (8
Categories)
93 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Business Relationships: Risks and Opportunism
94 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Li & Fung: Developing Business Relationships
95 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Business Relationships: Risks and Opportunism
96 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Business Relationships: Risks and Opportunism
97 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
New Technology and Business Customers
98 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
E-Procurement in Government Markets
99 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Relationship Marketing in the Keiretsu and Chaebol
102 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Institutional Markets: Heinz
Institutional markets — Heinz produces, packages and prices its products differently to better
serve the requirements of hospitals, colleges and other institutional markets.
103 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Kuala Lumpur International Airport
The Malaysian government awarded the main contract to build the Kuala Lumpur International
Airport to consortium which included mainly Japanese firms. They submitted a bid of $458 million,
which was higher than the lowest bidder of $397 million. However, the consortium was awarded the
contract because it was the “lowest technically acceptable and evaluated tender.
104 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Government Markets
105 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Government Markets
106 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
107 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing to Government Organizations
108 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing to Government Organizations
109 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Reasons for Not Using “Marketing Orientation”
110 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Marketing to Government Organizations
111 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Guidelines for Developing Corporate-Government
Relationships in China
112 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Schema for Chapter Seven
113 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Thank you