Principles of Marketing 17th Edition Kotler Solutions Manual

Principles of Marketing 17th Edition
Kotler Solutions Manual

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Chapter 6
BUSINESS MARKETS AND
BUSINESS BUYER BEHAVIOR
MARKETING STARTER: CHAPTER 6
IBM: The World’s Most Valuable Business-to-Business Brand
Synopsis
IBM’s “Big Blue” nickname used to be on the lips of any computer buyer, from laptops and desktop machines to
mainframes. By the early 1990s, the company’s sales had plateaued, which caused the firm to investigate what was
changing. Because the name is so familiar, many people don’t realize that most of IBM’s revenues come from
business customers, not individual consumers. Its business is much more than selling personal computers. IBM’s
core business is “delivering insights and solutions to customers’ data and information technology problems.” IBM is
now the most valuable B-to-B brand in the world, valued at $94 billion, about 50 percent more than the number two
brand, GE. IBM grew by partnering with its business customers, striving to understand their unique needs, and
providing superior value.. Business customer buying decisions are made within the framework of a strategic,
problem-solving partnership.
Discussion Objective
The IBM story is perfect for highlighting the unique characteristics of business markets and the differences between
consumer buying behavior and business buying behavior. It also demonstrates that marketing to business customers
requires a deep understanding of customer needs and customer-driven marketing strategies that create superior
customer value. To succeed in its business-to-business markets, IBM must build day in, day out, year in, and year
out customer partnerships based on superior products, close collaboration, and trust.
Starting the Discussion

Set up the discussion by visiting the IBM website at http://www.ibm.com. Students will see that even on the front
page, IBM touts that it loves developing customized and unique solutions. To explore what IBM offers to business
customers, scroll to the Products tab along the top. Then try the Services tab, and after that the Industry tab. In each
case, note the number of different offerings that IBM has for customers. Look for information on each that
underscores the basic promise that IBM must deliver each day: to create partnerships with business customers to
help them solve their problems and develop solutions.
With students, discuss the similarities and differences between selling to final consumers and selling to business
customers. Students should understand that working in business markets is much more complex, and that closing a
single sale may take years of advance work. Use the questions below to guide the discussion on IBM’s efforts to
build relationships with B-to-B customers to handle their technology and service needs and the impact on customer
relationships.
Discussion Questions
1. What are IBM’s business customers looking for when committing to work with IBM? But more than just a
superior product, they want a trusted partner that delivers on its promises. Business customers must be able
to rely on IBM as a strategic partner they can count on to help the company solve its problems and
sometimes win new customers of its own. As this case demonstrates, IBM providing solutions can mean it
even gets into business with customers in a huge variety of industries, from healthcare to education to
mining.
2. How does IBM’s marketing and sales to business customers differ from working with its individual
consumers? Selling and marketing in either sector requires a deep understanding of customer needs and
customer-driven marketing strategies that create superior customer value. However, in business markets,
rather than selling to large numbers of small buyers, IBM sells to a relatively few very large buyers. Losing
a single sale to a large business customer can mean the loss of hundreds of millions of dollars in revenues.
Performing poorly as a partner in creating solutions and developing systems can also cost the customer
Copyright© 2018 Pearson Education

hundreds of millions of dollars in revenue. Also, with IBM’s business customers, buying decisions are
much more complex. IBM is not the only company in the business of providing systems solutions services
to business customers. Selling a contract to take over operations of another company’s backend operations,
from customer service to finance, for example, involves a tortuously long buying process, dozens or even
hundreds of decision makers, and layer upon layer of subtle and not-so-subtle buying influences. To
succeed in these business-to-business markets, IBM must do more than just provide hardware and software
for its customers. It must work closely and deeply with its business customers to become a strategic,
problem-solving partner.
2. How does the IBM story relate to the major concepts of Chapter 6 on business buyer behavior? The IBM
story shows the complexities of business-to-business transactions and relationships relative to final
consumer buying. It provides an excellent vehicle for exploring the nature of business markets, types of
buying situations, buying participants and influences on business buyers, and the business buying process.
CHAPTER OVERVIEW
Use Power Point Slide 6-1 Here
This chapter examines business customers—those that buy goods and services for use in
producing their own products and services or for resale to others. As with firms selling to final
buyers, firms marketing to business customers must build profitable relationships with business
customers by creating superior customer value.
CHAPTER OBJECTIVES
Use Power Point Slide 6-2 here
1. Define the business market and explain how business markets differ from consumer markets.
2. Identify the major factors that influence business buyer behavior.
3. List and define the steps in the business buying decision process.
4. Discuss how new information technologies and online, mobile, and social media have
changed business-to-business marketing.
5. Compare the institutional and government markets and explain how institutional and
government buyers make their buying decisions.
CHAPTER OUTLINE
INTRODUCTION
p. 164
Considering our familiarity with IBM’s consumer products,
it is somewhat surprising that most of IBM’s business is for
the business customers who work with IBM to develop p. 163
systems solutions to data and information technology Photo: IBM
problems.
Most of IBM’s business comes from commercial and
industrial customers across a wide range of industries. IBM
provides services including data analytics, cloud computing,
cybersecurity, social networking, and mobile technology

solutions.
In its business markets, rather than selling to large numbers
of small buyers, IBM sells to a relatively few very large
buyers. Buying decisions are much more complex.
People throughout the entire IBM organization know that
success in business-to-business markets involves more than
just developing and selling superior products and
technologies.
Business customer buying decisions are made within the
framework of strategic, problem-solving partnerships.
 Opening Vignette Questions
1. Discuss several ways in which marketing to
business customers is different from marketing to
final consumers.
2. As a sales representative for IBM, how would
you describe the advantages of working with your
company to a potential customer?
3. As the president of Zappos.com, which
considerations would be most important to you in
selecting a data and information technology
vendor? Explain.
p. 164 Business buyer behavior refers to the buying behavior of
PPT 6-3 the organizations that buy goods and services for use in the
production of other products and services that are sold,
rented, or supplied to others. It also includes the behavior of
retailing and wholesaling firms that acquire goods for the p. 164
purpose of reselling or renting them to others at a profit. Key Terms:
Business buyer
In the business buying process, business buyers determine behavior, Business
which products and services their organizations need to buying process
purchase, and then find, evaluate, and choose among
alternative suppliers and brands.
Business-to-business (B-to-B) marketers must do their best to

understand business markets and business buyer behavior.
 Assignments, Resources
Use Discussion Question 6-1 here
Use Think-Pair-Share 1 here
PPT 6-4 Define the business market and explain how business Learning Objective
markets differ from consumer markets. 1
p. 164 Business Markets
The business market is huge. In fact, business markets

involve far more dollars and items than do consumer
markets.
The main differences between consumer and business

markets are in market structure and demand, the nature of
the buying unit, and the types of decisions and the decision
process involved.
p. 165
Market Structure and Demand p. 165
PPT 6-5 Key Term: Derived
The business marketer normally deals with far fewer but far demand
larger buyers than the consumer marketer does.
Even in large business markets, a few buyers often account

for most of the purchasing.
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.
Many business markets have inelastic demand; that is, total

demand for many business products is not affected much by
price changes, especially in the short run. p. 165
Ad: Gorilla Glass
Business markets have more fluctuating demand. The
demand for many business goods and services tends to
change more—and more quickly—than the demand for
consumer goods and services does.
p. 165
Nature of the Buying Unit
PPT 6-6
Compared with consumer purchases, a business purchase
usually involves more decision participants and a more
professional purchasing effort.
Often, business buying is done by trained purchasing agents

who spend their working lives learning how to buy better.
The more complex the purchase, the more likely that

multiple people will participate in the decision-making
process.
p. 165 Types of Decisions and the Decision Process
Business buyers usually face more complex buying decisions

than do consumer buyers. Purchases often involve large

sums of money, complex technical and economic
considerations, and interactions among many people at many
levels of the buyer’s organization. p. 166
Photo: Cargill
The business buying process also tends to be longer and
more formalized than the consumer buying process.
In the business buying process, buyer and seller are often

much more dependent on each other.
PPT 6-7 Many customer companies are now practicing supplier p. 166
development, systematically developing networks of Key Term: Supplier
supplier-partners to ensure an appropriate and dependable development
supply of products and materials that they will use in making
their own products or reselling to others.
Review Learning Objective 1: Define the business market

and explain how business markets differ from consumer
markets.
Use Critical Thinking Exercise 6-6 here
Use Video Case here
Use Outside Example 1 and 2 here
 Troubleshooting Tip
The first major learning barrier in this chapter is that
most students lack experience with the business
market and its buying processes. To promote student
understanding, carefully explain the business market
(see Key Terms) and how it differs from the
consumer market. The text provides ample material
with which to accomplish this objective.
PPT 6-8 Identify the major factors that influence business buyer Learning Objective
behavior. 2
p. 166 Business Buyer Behavior p. 167

Figure 6.1: A Model
PPT 6-9 At the most basic level, marketers want to know how of Business Buyer
business buyers will respond to various marketing stimuli. Behavior
Within the organization, buying activity consists of two

major parts: the buying center and the buying decision
process.
Major Types of Buying Situations

There are three major types of buying situations.
p. 167
PPT 6-10 In a straight rebuy, the buyer reorders something without Key Terms: Straight
any modifications. It is usually handled on a routine basis by rebuy, Modified
the purchasing department. rebuy, New task,
Systems selling
In a modified rebuy, the buyer wants to modify the product (Solutions selling)
specifications, prices, terms, or suppliers. The modified
rebuy usually involves more decision participants than does
the straight rebuy.
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.
PPT 6-11 Many business buyers prefer to buy a complete solution to a

problem from a single seller. Instead of buying and putting p. 167
all the components together, the buyer may ask sellers to Photo: Six Flags
supply the components and assemble the package or system.
Thus, systems selling is often a key business marketing
strategy for winning and holding accounts.
Participants in the Business Buying Process
p. 168
The decision-making unit of a buying organization is called
PPT 6-12 its buying center: all the individuals and units that p. 168
participate in the business decision-making process. Key Terms: Buying
center, Users,
The buying center includes all members of the organization Influencers, Buyers,
PPT 6-13 who play any of five roles in the purchase decision process. Deciders,
Gatekeepers
• Users are members of the organization who will use
the product or service.
• Influencers often help define specifications and also
provide information for evaluating alternatives.
• Buyers have formal authority to select the supplier
and arrange terms of purchase.
• Deciders have formal or informal power to select or
approve the final suppliers.
• Gatekeepers control the flow of information to
others.
The buying center is not a fixed and formally identified unit
within the buying organization. It is a set of buying roles

assumed by different people for different purchases.
Within the organization, the size and makeup of the buying

center will vary for different products and for different
buying situations.
The buying center concept presents a major marketing

p. 168 challenge. The business marketer must learn who
PPT 6-14 participates in the decision, each participant’s relative
influence, and what evaluation criteria each decision
participant uses.
The buying center usually includes some obvious

participants who are involved formally in the buying process.
It may also involve less obvious, informal participants, some
of whom may actually make or strongly affect the buying
decision. Sometimes, even the people in the buying center
are not aware of all the buying participants.
Major Influences on Business Buyers
Business buyers are subject to many influences when they

p. 168 make their buying decisions. Business buyers respond to p. 169
PPT 6-15 both economic and personal factors. They react to both Ad: USG
reason and emotion.
When suppliers’ offers are very similar, business buyers

PPT 6-16 have little basis for strictly rational choice. Because they can p. 169
meet organizational goals with any supplier, buyers can Figure 6.2: Major
allow personal factors to play a larger role in their decisions. Influences on
Business Buyer
When competing products differ greatly, business buyers are Behavior
more accountable for their choice and tend to pay more
attention to economic factors.
Business buyers are heavily influenced by factors in the

current and expected economic environment, such as the
level of primary demand, the economic outlook, and the cost
PPT 6-17 of money.
p. 169
An increasingly important environmental factor is supply of
key materials. Many companies are now more willing to buy
and hold larger inventories of scarce materials to ensure
adequate supply. Business buyers also are affected by
technological, political, and competitive developments in the
environment.

Culture and customs can strongly influence business buyer
reactions to the marketer’s behavior and strategies,
especially in the international marketing environment.
Organizational factors are also important. Each buying

organization has its own objectives, policies, procedures,
structure, and systems, and the business marketer must
p. 169 understand those factors as well.
PPT 6-18
The buying center usually includes many participants who
influence each other, so interpersonal factors also influence
the business buying process. These factors can include
expertise and authority. It is often difficult to assess such
interpersonal factors and group dynamics.
PPT 6-19
Each participant in the business buying-decision process
brings in personal motives, perceptions, and preferences.
These individual factors are affected by personal
PPT 6-20 characteristics such as age, income, education, professional p. 170
p. 171 identification, personality, and attitudes toward risk. Photo: International
marketing manners
Review Learning Objective 2: Identify the major factors
that influence business buyer behavior.
Use Real Marketing 6.1 here
Use Discussion Questions 6-3 here
Use Marketing Ethics here
Use Additional Projects 1 and 2 here
Use Small Group Assignment 1 here
Use Individual Assignment 1 here
One area of concern deals with students under-
standing a buying center. The easiest way to
overcome this is by asking the students to form their
own buying center. Who at the university or college
would be involved in buying computers for the
computer lab, athletic equipment for the gym,
textbooks for the class, and shrubs for the campus?
Be sure to explain that it is not always the most
obvious people that might be involved in the process.
How many committees (people) did they come up
with? After one illustration, students usually catch on
to how the process works. Finish the discussion by
asking how the marketing person in a supplier

organization should use or gain knowledge about the
buying center process of a future sales client (use the
examples above if necessary to make a connection).
PPT 6-21 List and define the steps in the business buying decision Learning Objective
process. 3
The Business Buyer Decision Process

p. 171
PPT 6-22 Buyers who face a new task buying situation usually go p. 171
through all stages of the buying process. Buyers making Figure 6.3: Stages
modified or straight rebuys may skip some of the stages. of the Business
Buyer Decision
Problem Recognition Process
PPT 6-23 Problem recognition can result from internal or external

stimuli. Internally, the company may decide to launch a new
product that requires new production equipment and p. 171
materials. Externally, the buyer may get some new ideas at a Key Term: Problem
trade show, see an ad, or receive a call from a salesperson recognition
who offers a better product or a lower price.
p. 172
General Need Description Ad: Accenture
p. 172 Digital
PPT 6-24 The buyer next prepares a general need description that
describes the characteristics and quantity of the needed item.
p. 172
For standard items, this process presents few problems. For Key Terms: General
complex items, however, the buyer may have to work with need description,
others—engineers, users, and consultants—to define the Problem
item. specification
Product Specification
The buying organization next develops the item’s technical

product specifications, often with the help of a value
analysis engineering team.
Product value analysis is an approach to cost reduction in

which components are studied carefully to determine if they
can be redesigned, standardized, or made by less costly
methods of production.
The team decides on the best product characteristics and

specifies them accordingly.
p. 172 Supplier Search

PPT 6-25 p. 172
The buyer now conducts a supplier search to find the best Key Terms:
vendors. The buyer can compile a small list of qualified Supplier search,
suppliers by reviewing trade directories, doing a computer Proposal solicitation
search, or phoning other companies for recommendations.
Today, more and more companies are turning to the Internet

to find suppliers.
The newer the buying task, the more complex and costly the
item, and the greater the amount of time the buyer will spend
searching for suppliers.
Proposal Solicitation
In the proposal solicitation stage of the business buying

process, the buyer invites qualified suppliers to submit
proposals.
When the item is complex or expensive, the buyer will

usually require detailed written proposals or formal
presentations from each potential supplier.
Supplier Selection
p. 173 During supplier selection, the buying center often will draw
up a list of the desired supplier attributes and their relative
importance.
p. 173
Buyers may attempt to negotiate with preferred suppliers for Key Terms:
better prices and terms before making the final selections. In Supplier selection,
the end, they may select a single supplier or a few suppliers. Order-routine
specification
Many buyers prefer multiple sources of suppliers to avoid
being totally dependent on one supplier and to allow
comparisons of prices and performance of several suppliers
over time.
Order-Routine Specification
The buyer now prepares an order-routine specification. It

p. 173 includes the final order with the chosen supplier or suppliers
and lists items such as technical specifications, quantity
needed, expected time of delivery, return policies, and
warranties.

In the case of maintenance, repair, and operating items,
buyers may use blanket contracts rather than periodic
purchase orders. A blanket contract creates a long-term
relationship in which the supplier promises to resupply the
PPT 6-26 buyer as needed at agreed prices for a set time period.
Many large buyers now practice vendor-managed inventory,

in which they turn over ordering and inventory
responsibilities to their suppliers.
Performance Review
p. 173
The performance review may lead the buyer to continue, Key Term:
modify, or drop the arrangement. Performance review
The eight-stage model provides a simple view of the

business buying-decision process. The actual process is
usually much more complex.
Review Learning Objective 3: List and define the steps in

the business buying decision process.
Use Marketing by the Numbers here
Use Video Case here
It is often difficult for students to draw a parallel
between business buying and consumer buying even
though the students learned about consumer buying
in the previous chapter. One way to overcome this
difficulty is to have students discuss the differences
in how they buy clothes for themselves, versus how
Macy’s or another department store would buy
clothes to resell.
p. 173 Discuss how new information technologies and online, Learning Objective
PPT 6-27 mobile, and social media have changed business-to- 4
business marketing.
Engaging Business Buyers with Digital and Social

Marketing
PPT 6-28 E-Procurement and Online Purchasing

p. 173
Electronic purchasing, or e-procurement, has grown rapidly
in recent years. It is now standard procedure in most p. 173
companies.
Key Term: E-
E-procurement reduces transaction costs and results in more procurement
efficient purchasing for both buyers and suppliers. In turn,
business marketers can connect with customers online to
PPT 6-29 share marketing information, sell products and services,
provide customer support services, and maintain ongoing
customer relationships.
E-procurement reduces the time between order and delivery.

It also eliminates the paperwork associated with traditional
requisition and ordering procedures and helps an
organization keep better track of all purchases.
Beyond the cost and time savings, e-procurement frees

purchasing people to focus on more strategic issues. p. 174
p. 174 Ad: Staples
The use of e-procurement also presents some problems.
At the same time that the Web makes it possible for suppliers
and customers to share business data and even collaborate on
product design, it can also erode decades-old customer-
supplier relationships. Many buyers now use the process to
pit suppliers against each other and to search out better deals,
products and turnaround times on a purchase-by-purchase
basis.
Business-to-Business Digital and Social Media Marketing
B-to-B digital and social media marketing involves using

these approaches to engage business customers and manage
customer relationships anywhere, anytime.
p. 174
It isn’t just a concept that is growing; it is exploding. While Key Term: B-to-B
digital and social media can create greater customer digital and social
p. 175 engagement, marketers know they aren’t really targeting media marketing
businesses, but rather individuals in those businesses who
affect buying decisions. p. 175
Photo: Maersk Line
Review Learning Objective 4: Discuss how new
information technologies and online, mobile, and social
media have changed business-to-business marketing.
Use Real Marketing 6.2 here
Use Online, Mobile, and Social Media Marketing
here

PPT 6-30 Compare the institutional and government markets and Learning Objective
p. 175 explain how institutional and government buyers make 5
their buying decisions.
Institutional and Government Markets
Much of this discussion also applies to the buying practices

of institutional and government organizations. However,
these two non-business markets have additional character-
istics and needs.
p. 175
PPT 6-31 Institutional Markets
p. 175
The institutional market consists of schools, hospitals, Key Term:
nursing homes, prisons, and other institutions that provide Institutional market
goods and services to people in their care. Institutions differ
from one another in their sponsors and in their objectives.
p. 177
Many institutional markets are characterized by low budgets Photo: General
and captive patrons. Mills
Many marketers set up separate divisions to meet the special
characteristics and needs of institutional buyers.
Government Markets
PPT 6-32
The government market offers large opportunities for many
companies, both big and small.
p. 177
Key Term:
In most countries, government organizations are major
Government market
buyers of goods and services. In the United States alone,
federal, state, and local governments contain more than
89,000 buying units that purchase more than $3 trillion in
goods and services each year.
Government organizations typically require suppliers to

submit bids, and normally they award the contract to the
lowest bidder. In some cases, the government unit will make
allowances for the supplier’s superior quality or reputation
for completing contracts on time.
Government organizations tend to favor domestic suppliers

over foreign suppliers.
Government buyers are affected by environmental,

organizational, interpersonal, and individual factors.

One unique aspect of government buying is that it is
carefully watched by outside publics, ranging from Congress
to a variety of private groups interested in how the
government spends taxpayers’ money.
Because their spending decisions are subject to public

review, government organizations require considerable
paperwork from suppliers, who often complain about
excessive paperwork, bureaucracy, regulations, decision-
making delays, and frequent shifts in procurement personnel.
Most governments provide would-be suppliers with detailed

guides describing how to sell to the government.
Non-economic criteria also play a growing role in

government buying.
• Government buyers are asked to favor depressed

business firms and areas; small business firms;
minority-owned firms; and business firms that avoid
race, gender, or age discrimination.
• Many firms that sell to the government have not been
marketing oriented.
• Total government spending is determined by elected
officials rather than by any marketing effort to
develop this market.
• Government buying has emphasized price, making
suppliers invest their effort in technology to bring
costs down.
• When the product’s characteristics are specified
carefully, product differentiation is not a marketing
factor.
• Nor do advertising or personal selling much matter in
winning bids on an open-bid basis.
Several companies, including GE, Boeing, and Goodyear,

have established separate government marketing
departments. These companies anticipate government needs
and projects, participate in the product specification phase,
gather competitive intelligence, prepare bids carefully, and
produce stronger communications to describe and enhance
their companies’ reputations.
Review Learning Objective 5: Compare the institutional

and government markets and explain how institutional and

government buyers make their buying decisions.
Use Small Group Assignment 2 here
Use Individual Assignment 2 here
Use Company Case here
END OF CHAPTER MATERIAL

 6-1 Explain how the market structure and demand differ for business markets compared to
consumer markets. (AACSB: Communication; Reflective Thinking)
Answer: Student answers will vary based on their personal response. Refer to the MyLab for
an opportunity to assign this question, and all starred MyLab questions, to a student
discussion board.
 6-2 Describe the tools B-to-B marketers use to engage customers. What are the challenges
with B-to-B social media marketing? (AACSB: Communication; Reflective Thinking)
discussion board.
 6-3 Briefly discuss the straight rebuy and modified rebuy strategies. What are the similarities
and differences? When might it be beneficial to use one approach over the other? (AACSB:
Communication; Reflective Thinking)
discussion board.
6-4 List the participants in the business buying process. What factors influence the buying
decision? Discuss the major influences on business buyers. (AACSB: Communication,
Reflective Thinking)
Answer:
Participants in the business buying decision process are members of the buying center. The
group includes the actual users of the product or service, those who make the buying
decision, those who influence the buying decision, those who do the actual buying, and those

who control buying information. Economic factors influence business buyers, but emotion
also plays a part.
The buying center includes all members of the organization who play any of five roles in the
purchase decision process.
• Users are members of the organization who will use the product or service. In many cases,
users initiate the buying proposal and help define product specifications.
• Influencers often help define specifications and also provide information for evaluating
alternatives. Technical personnel are particularly important influencers.
• Buyers have formal authority to select the supplier and arrange terms of purchase. Buyers
may help shape product specifications, but their major role is in selecting vendors and
negotiating contracts. In more complex purchases, buyers might include high-level officers
participating in the negotiations.
• Deciders have the formal or informal power to select or approve the final suppliers. In
routine buying, the buyers are often the deciders, or at least the approvers.
• Gatekeepers control the flow of information to others. For example, purchasing agents
often have the authority to prevent salespersons from seeing users or deciders. Other
gatekeepers include technical personnel and even personal secretaries.
The major influences on business buyers are broken down into environmental,
organizational, interpersonal, and individual categories. Business buyers are heavily
influenced by factors in the current and expected economic environment, such as the level of
primary demand, the economic outlook, and the cost of money. Another environmental factor
is the supply of key materials. Many companies now are more willing to buy and hold larger
inventories of scarce materials to ensure adequate supply. Business buyers also are affected
by technological, political, and competitive developments in the environment. Finally,
culture and customs can strongly influence business buyer reactions to the marketer’s
behavior and strategies, especially in the international marketing environment. The business
buyer must watch these factors, determine how they will affect the buyer, and try to turn
these challenges into opportunities.
Organizational factors are also important. Each buying organization has its own objectives,
strategies, structure, systems, and procedures, and the business marketer must understand
these factors well.
The buying center usually includes many participants who influence each other, so
interpersonal factors also influence the business buying process. However, it is often
difficult to assess such interpersonal factors and group dynamics. Whenever possible,
business marketers must try to understand these factors and design strategies that take them
into account.
Each participant in the business buying decision process brings in personal motives,
perceptions, and preferences. These individual factors are affected by personal characteristics
such as age, income, education, professional identification, personality, and attitudes toward
risk. Also, buyers have different buying styles. Some may be technical types who make in-
depth analyses of competitive proposals before choosing a supplier. Other buyers may be
intuitive negotiators who are adept at pitting the sellers against one another for the best deal.

6-5 Compare the institutional and government markets and explain how institutional and
government buyers make their buying decisions. (AACSB: Communication)
Answer:
The institutional market consists of schools, hospitals, prisons, and other institutions that
provide goods and services to people in their care. These markets are characterized by low
budgets and captive patrons. Because the purchases are part of a total service package, the
buying objective is not profit. Nor is strict cost minimization the goal. Many marketers set up
separate divisions to meet the special characteristics and needs of institutional buyers.
The government market, which is vast, consists of government units—federal, state, and
local—that purchase or rent goods and services for carrying out the main functions of
government. Government buyers purchase products and services for defense, education,
public welfare, and other public needs. Government buying practices are highly specialized
and specified, with open bidding or negotiated contracts characterizing most of the buying.
Government buyers operate under the watchful eye of the U.S. Congress and many private
watchdog groups. Hence, they tend to require more forms and signatures and respond more
slowly and deliberately when placing orders.
Critical Thinking Exercises
6-6 Business buying can be a very involved process. Many companies employ procurement or
purchasing experts dedicated to managing the firm’s buying process. Visit
www.glassdoor.com/salaries and www.indeed.com/salary to conduct a search of the salary
ranges for “procurement specialists” and similar positions in purchasing. Present your
findings. Can e-procurement help to streamline the buying process? Might it eventually
replace employees in these careers? Discuss if it is possible for all buying functions to be
performed through e-procurement. (AACSB: Communication, Reflective Thinking, Use of
IT)
Answer:
In October 2016, the national average salary for a “procurement specialist” position was
$56,373, with a range of $37,000 to $89,000. Searching for “purchasing agent” gives an
average salary of $47,027, with a range of $30,000 to $74,000. The variance considers
differentiators such as educational attainment, years of direct work experience, depth and
breadth of the position, as well as supervisory or management functions.
E-procurement has grown exponentially with advances in IT, and was virtually unknown a
decade and a half ago. Now, online purchasing is standard for many companies. E-
procurement gives buyers access to new suppliers, lowers purchasing costs, and speeds order
processing and delivery. Additionally, business marketers can connect with customers online
to share marketing information, sell products and services, provide customer support, and
maintain ongoing customer relationships. Instead of the old model of sales reps calling on
business customers at work or meeting at trade shows, the new digital approaches facilitate
anytime, anywhere connections between seller and business buyer. It gives both sellers and

buyers more control of and access to important information. B-to-B marketing has always
been social network marketing, but today’s digital environment offers an exciting array of
new networking tools and applications.
Students should discuss the streamlined, simplified process made available by e-procurement
and the impact of e-procurement on purchasing careers. It may not completely eliminate the
value provided by face-to-face and in-person customer relationship management. Also, e-
procurement may not be available or practicable in all industries or markets.
6-7 Interview a businessperson to learn how purchases are made in his or her organization. Ask
this person to describe a straight rebuy, a modified rebuy, and a new-task buying situation
that took place recently or of which he or she is aware (define them if necessary). Did the
buying process differ based on the type of product or purchase situation? Ask the
businessperson to explain the role he or she played in a recent purchase and to discuss the
factors that influenced the decision. Write a brief report of your interview by applying the
concepts you learned in this chapter regarding business buyer behavior. (AACSB:
Communication; Reflective Thinking)
Answer:
Student answers will vary. The point of the activity is to provide the students with
information about how actual businesses go through purchasing decisions and see how the
process matches with the concepts in the chapter. Students should demonstrate an
understanding of business markets, the three types of buying situations, factors influencing
business buyer behavior, and the stages in the business buying process. The businessperson
interviewed will probably discuss the nature of business markets with respect to the nature of
the buying unit (i.e., several decision participants and a professional purchasing effort) and
the types of decisions and the decision process (i.e., complex, formalized, buyers and sellers
dependent on each other). The three types of business buying situations are straight rebuy,
modified rebuy, and new. The factors that may influence the purchase decision are
environmental factors, organizational factors, interpersonal factors, and individual factors
(see Discussion Question 4). Finally, the stages of the business buying process are problem
recognition, general need description, product specification, supplier search, proposal
solicitation, supplier selection, order-routine specification, and performance review.
6-8 The U.S. government is the world’s largest purchaser of goods and services, spending more
than $460 billion per year. By law, 23 percent of all government buying must be targeted to
small firms. In a small group, visit the Small Business Administration’s Government
Contracting Classroom at <URL>www.sba.gov/content/government-contracting-
classroom</URL> to learn how small businesses can take advantage of government
contracting opportunities. Complete one of the self-paced online courses and develop a
brochure explaining the process to small business owners. (AACSB: Communication;
Reflective Thinking; Use of IT)
Answer:

Students’ brochures will vary. This website provides information in easy-to-understand,
short (less than thirty minutes) courses and organizes it into a brochure format should make
this learning assignment more interesting for students. Students will have to sign in with their
name and email and answer a few demographic questions, but that is all that is required to
access the courses. Instructors might want to assign students to different courses to get a
variety of brochures. For example, some students will create brochures providing an
overview of government contracting, while others will create ones focused on specific types
of small businesses, such as veteran-owned or minority-owned small businesses.
APPLICATIONS AND CASES
Online, Mobile, and Social Media Marketing: E-Procurement and Mobile Procurement
Gone are the days of tedious, paper-laden, and labor-intensive procurement duties. E-
procurement is changing the way buyers and sellers do business, specifically via mobile
procurement that offers cloud-based platforms that reduce the search, order, and approval cycle.
Most large companies have adopted some form of e-procurement. A recent study found that
almost 70 percent of companies utilize some form of e-procurement, mobile procurement, or
supply chain management applications. A leading industry platform, Coupa, provides a suite of
cloud-based applications for finance, including accounts payable, sourcing, procurement, and
expense management that allows customers full functionality from their mobile devices.
Employees now enjoy the flexibility and time savings of viewing, approving, or denying
requisitions, purchase orders, and invoices. One of Coupa’s large retail clients claimed a
reduction from 10 days to 5 hours in their requisition-approval-process cycle by implementing
Coupa’s mobile procurement platform. Talk about savings! Visit
www.coupa.com/software/procurement/to learn more about how this company is revolutionizing
the e-procurement and mobile procurement environments.
 6-9 Discuss the advantages of e-procurement to both buyers and sellers. What are the
disadvantages? (AACSB: Communication; Reflective Thinking)
discussion board.
6-10 Research mobile procurement and discuss the roles in the buying center that are impacted
most by this technology. (AACSB: Communication; Reflective Thinking)
Answer:
• The two members of the buying center impacted most by mobile procurement are buyers
and deciders. Buyers have formal authority to select the supplier and arrange terms of
purchase. Buyers may help shape product specifications, but their major role is in
selecting vendors and negotiating. In more complex purchases, buyers might include
high-level officers participating in the negotiations. Deciders have formal or informal

power to select or approve the final suppliers. In routine buying, the buyers are often the
deciders, or at least the approvers.
• Mobile procurement applications allow procurement professionals to complete tasks
while on the go. Software companies like SAP
sap.com/pc/tech/mobile/software/applications/lob/procurement/ offer products that allow
immediate approval no matter where the manager and employee are located.
For more information on mobile procurement, see: Pat Toensmeier, “Nearly 1 in 3
Companies to Deploy Mobile Procurement Apps in 12 Months,” Thomasnet.com, (July
17, 2013), available at thomasnet.com/journals/procurement/nearly-1-in-3-companies-to-
deploy-mobile-procurement-apps-in-12-months/ and “The Mobile Sourcing Revolution:
3 Ways Mobile Tech Will Impact Procurement,” My Purchasing Center, (February 21,
2014), available at
mypurchasingcenter.com/technology/technology-articles/mobile-sourcing-revolution-3-
ways-mobile-tech-will-impact-procurement
Marketing Ethics: What Are Our Kids Eating?
Many institutional markets are characterized by low budgets and captive patrons. One
institutional food program that has gotten much recent attention is the National School Lunch
Program. Although the federal government mandates that schools receiving federal money serve
free lunches to children from low-income families, the funds don’t cover the entire cost of the
meal. The difference comes out of school budgets and that means fewer dollars for the
classroom.
According to one study (www.cnn.com/2010/HEALTH/09/29/ school.food.investigation/), the

number-one meal served to children in U.S. schools is chicken fingers and French fries.
Processed food is much cheaper to serve than fresh produce. Another study published in the
Journal of the American Dietetic Association found that 94 percent of school lunches failed to
meet the U.S. Agriculture Department’s regulatory standards. Purchasing agents for school
systems must search for institutional food vendors whose quality meets or exceeds a minimum
standard while offering low prices.
The goal of the federal Healthy, Hunger-Free Kids Act of 2010 is to improve the overall
nutritional quality of what students eat at school. The law, which is being implemented over a
five-year period, affects several parts of school food. It changes what’s in vending machines and
how much food students get, rules out fried food, and makes all milk low-fat or fat-free. But it’s
also changing the way lunches are priced. These changes have dieticians and food service
directors facing significant challenges.
6-11 Research what constitutes a healthy lunch in a public school system. Should food
companies selling to school systems take responsibility for working with buyers to address
this issue? Why or why not?
Answer:

A healthy lunch is 3 ounces of protein, a whole grain, a vegetable, and fresh fruit. This lunch
is difficult to provide for $2.50. Food service directors (buyers) need to work with food
service companies and local farmers (suppliers) to source healthy alternatives that are
economically feasible within the school lunch budget in order to offer the best options to
students.
Marketing is all about helping customers to solve problems. So it makes good sense for food
companies to step in and help their institutional customers develop healthy lunches that meet
requirements at reasonable prices. What’s more, it’s the right thing to do. Students should
explore the positive impact to businesses with social responsibility initiatives. Marketers
should capitalize on their companies’ social responsibility activities to create goodwill within
customer communities that further enhances their brands.
The case states that 94 percent of lunches failed to meet standards as of 2009. The Healthy,
Hunger-Free Kids Act of 2010 has helped move the needle. But with food costs rising and
budgets shrinking, this issue becomes more and more challenging for both schools and
companies that market to them.
6-12 How can food marketers go about helping schools to meet the national guidelines for
healthy school lunches? What are the benefits of doing so?
Answer:
Marketers can set up separate divisions to meet the special needs and characteristics of the
institutions being served. Nestlé Professional helps institutional food service customers find
creative meal solutions using Nestlé’s broad assortment of food and beverage brands.
Similarly, P&G’s Procter & Gamble Professional Division markets professional cleaning and
laundry formulations and systems to educational, healthcare, and other institutional and
commercial customers. Helping to meet the special food needs of school systems will create
competitive advantage, resulting in stronger customer relationships and more business.
Marketing by the Numbers: NAICS
The North American Industry Classification System (NAICS) code is very useful for marketers.
It replaces the old product-based Standard Industrial Classification (SIC) system introduced in
the 1930s. The NAICS system classifies businesses by production processes, better reflecting
changes in the global economy, especially in the service and technology industries. It was
developed jointly by the United States, Canada, and Mexico in 1997 in concert with the North
American Free Trade Agreement (NAFTA), providing a common classification system for the
three countries and better compatibility with the International Standard Industrial Classification
(ISIC) system. This six-digit number (in some cases, 7 or 10 digits) is very useful for
understanding business markets.
6-13 What do the six digits of the NAICS code represent? What industry is represented by the
NAICS code 721110? How many businesses comprise this code? (AACSB:
Communication)

Answer:
The NAICS code has a hierarchical structure:
XX Industry sector (20 broad sectors)

XXX Industry subsector
XXXX Industry group
XXXXX Industry
XXXXXX National industries (U.S., Canadian, or Mexican national specific)
The government website (http://www.census.gov/eos/www/naics/faqs/faqs.html#q5) states

that U.S. industries are defined up to the 6-digit level. Each digit in the code is part of a series
of progressively narrower categories, and the more digits in the code signify greater
classification detail. The first two digits designate the economic sector, the third digit
designates the subsector, the fourth digit designates the industry group, the fifth digit
designates the NAICS industry, and the sixth digit designates the national industry. The 5-
digit NAICS code is the level at which there is comparability in code and definitions for most
of the NAICS sectors across the three countries participating in NAICS (the United States,
Canada, and Mexico). The 6-digit level allows for the United States, Canada, and Mexico
each to have country-specific detail. A complete and valid NAICS code contains six digits.
The code 721110 refers to hotels (except casino hotels) and motels. This industry comprises
establishments primarily engaged in providing short-term lodging in facilities known as
hotels, motor hotels, resort hotels, and motels. The establishments in this industry may offer
food and beverage services, recreational services, conference rooms and convention services,
laundry services, parking, and other services. According to the NAICS website
(https://www.naics.com/six-digit-naics/?code=72), spreadsheet, 85,779 establishments
comprise the 721110 NAICS code.
6-14 How can marketers use NAICS codes to better deliver customer satisfaction and value?
(AACSB: Communication; Reflective Thinking)
Answer:
The NAICS has a white paper addressing how marketers can use the NAICS codes for
marketing (http://www.naics.com). It discusses using the codes to more effectively identify
the best customers by industry and line of business and to seek potential markets by
analyzing the NAICS and SIC codes of existing and potential customers. One main way
marketers can use these codes is to assist in determining the size of a potential market. There
are also industry directories available to get a better understanding of the size and potential
needs of businesses within a specific NAICS code. Resources are available to purchase lists
of companies within a specific code, which will help marketers better target the right
customers with their products and services.
Company Case Notes

Procter & Gamble: Treating Business Customers As Strategic Partners
Synopsis
When it comes to B2B marketing, Procter & Gamble (P&G) has long been considered one of the
best. In addition to a stable of top-selling brands and the fact that P&G is the world’s largest
advertiser, P&G is an American icon for building strategic partnerships with its distributors. At
P&G, this happens through what it calls “Customer Business Development” (CBD). The CBD
approach involves truly partnering with retail clients. P&G understands that in order for its own
business to grown, the retail client’s business must grow. That’s a complex task with clients like
Walmart, Walgreen’s, and Kroger. For this reason, P&G assigns a full CBD team to its clients
that include salespeople as well as specialists for every aspect of P&G’s consumer brands. With
5,000 employees in this sales force, CBD teams can vary from 350 for a client like Walmart
(which accounts for 20 percent of all P&G sales) to 30 for Dollar General. In this manner, CBD
team members have all the resources they need to resolve customer problems. CBD teams focus
on meeting customer needs, help clients manage entire categories of products, and help manage
competitor brands. P&G believes that if it can help grow the category, then everyone wins. It’s
this kind of interaction that builds high levels of trust between P&G and its clients.
Teaching Objectives
The teaching objectives for this case are to:
1. Allow students to understand and appreciate the differences between consumer and
business markets.
2. Identify real-world examples for the different buying situations.
3. Help students understand the differences between consumer and business buyer behavior.
4. Provide an opportunity for students to analyze product features and benefits that result for
commercial customers.
6-18 Compare and contrast the nature of the business market structure and demand relative to
consumer market structure and demand for a specific P&G product.
Table 6.1 from the text provides the foundation for discussing this question. The
implications for any and all of these points may be discussed. Suggestions for the points
that are most relevant to this case are given below.
Implications for P&G Implications for clients

Business markets contain There is a great deal of Clients should
few but larger buyers. pressure on P&G to understand how
maintain strong important they are to
customer relationships P&G and take
and deliver on advantage of the sales
promises. force attention.
Business buyer demand is It is essential that P&G It is essential that the

derived from final understand the needs, client understand its
customers. wants, and desires of own customer in order
the end user, not just to communicate
the corporation. Also, customer requirements
P&G must keep an eye to P&G.
on sales trends in
collaboration markets.
Demand is more inelastic. Coming up with the The client must

exact “right price” may accurately forecast the
not be as important as number of units that it
providing the right needs. It should also
features and benefits to maintain strong
customers. procurement resources
to ensure that benefits
are delivered as
promised.
Demand fluctuates more P&G needs to maintain Clients need to consider

and more quickly. flexibility to adjust to the means of spreading
downturns and spikes in demand out to create a
demand. more level structure in
terms of their own costs.
============================================================
6-19 For the same product, discuss the differences in the types of decisions and the decision
process for business and consumer markets.
Through discussion of this question, it should become apparent that P&G’s buying situations
are much more complex than consumer buying processes. Choose a product, such as Tide.
Compare and contrast the buyer decision process from Chapter 5 (Figure 5.6) with the
stages of business buying behavior from Chapter 6 (Figure 6.3). Eight steps versus five steps
is the obvious difference. But what needs to be illustrated is the nature of those steps. Which
parts of the B2B model are more extensive and why? The characteristics of business markets
from question 6-18 should provide support for this. In short, there is often a more formal,
documented, and extensive process for making business purchases because there is far more
at stake than there is for a single purchase of the same good by an individual consumer.

6-20 This case covers the various members of a P&G Customer Business Development team.
For a P&G corporate client, illustrate how the different roles of the buying center might
interact with that CBD team. Be specific.
P&G’s CBD teams are sales oriented while the buying center is purchasing oriented. Thus,
the purpose of this question is to figure out if there are some natural matches between the
selling roles in CBD and the buying roles in the buying center. An important thing to note
from the case is, “Each time a [CBD] team member contacts the customer, he or she
represents the entire team.” That said, there will certainly be a fair amount of “every CDB
role interacts with any and every buying center role.” But there are likely natural fits that
will have certain roles crossing paths more frequently. “Consider the following:
• Users are members of the organization who will use the product or service. In many
cases, users initiate the buying proposal and help define product specifications. Most
likely CBD fit: marketing strategy, operations, product development.
• Influencers often help define specifications and also provide information for
evaluating alternatives. Technical personnel are particularly important influencers.
Most likely CBD fit: product development, information systems, marketing strategy.
• Buyers have formal authority to select the supplier and arrange the terms of
purchase. Buyers may help shape product specifications, but their major role is in
selecting vendors and negotiating. In more complex purchases, buyers might include
high-level officers participating in the negotiations. Most likely CBD fit: account
executives, finance.
• Deciders have formal or informal power to select or approve the final suppliers. In
routine buying, the buyers are often the deciders, or at least the approvers. Most
likely CBD fit: account manager, account executives, finance.
• Gatekeepers control the flow of information to others. For example, purchasing
agents often have authority to prevent salespersons from seeing users or deciders.
Other gatekeepers include technical personnel and even personal secretaries. Most
likely CBD fit: account executives, information systems, human resources.
6-21 Discuss some ways that P&G’s CBD structure is more effective than a single sales rep.
This boils down to the advantages of a generalist versus a specialist. A single sales rep
would have a hard time becoming a specialist in every aspect of a client company. However,
with the CBD approach of having multiple reps, each trained in different areas of expertise,
there is a better chance that all client needs and concerns can be addressed.
P&G salespeople have the resources they need to resolve even the most challenging
customer problems. Although not each CBD member has specialized knowledge in every
area, the CBD team as a unit does. “If my customer needs help from us with in-store
promotions, I can go right down the hall and talk with someone on my team in marketing
about doing some kind of promotional deal. It’s that simple.”
6-22 Why have P&G’s competitors not been able to duplicate its customer relationship strategy?
P&G has developed CBD over decades. It is complex, requires resources, and requires a
corporate culture that can support it. Having company decision makers who want CBD and
who approve its development is not enough because implementation would likely require a

makeover of the corporate culture. Then, it would require full support of the organization
from the top down. Resources would have to be allotted to ensure successful adoption and
takeoff.
6-23 Will P&G’s divestment of 100 brands pay off? Why or why not?
P&G is a master at managing brands. Based on that alone, it is hard to imagine that the
company would make a move like this if it were not very confident that it would pay off.
Consider the following reasons for this move, and it becomes even more likely that the
return-on-divestment will be strong:
• The 65 brands not sold off were the strongest performing, responsible for 90 percent
of revenue and 95 percent of profits.
• Resources allocated to the divested brands can be reassigned to the retained brands
to make them even stronger. The elimination of the weaker brands relieves a large
financial burden.
• Managing fewer brands is easier.
• The weaker brands accounted for an overall flattening out of P&G’s financial
performance.
• The now leaner brand portfolio is a much better fit with P&G’s approach to strategic
customer partnerships.
Teaching Suggestions
To get the discussion started, show this P&G produced recruiting video
(http://www.youtube.com/watch?v=2j5rwJHzbK4) to communicate the nature of Customer
Business Development. It’s a few minutes long, but it gives a complete description of the
members of a CBD team, their roles, and the nature of partnering with clients. If this video does
its job, then there should be a significant number of students interested in learning more about
careers as P&G CBD representatives because they will get a glimpse of the collaborative nature
of real personal selling.
This case was developed for use with Chapter 6. This case also works well with the sales chapter
(Chapter 16).
Go to mymktlab.com for the answers to the following assisted-graded writing questions:
6-24 What is supplier development and why are companies practicing it?
6-25 Describe how online purchasing has changed the business-to-business marketing
process and discuss the advantages and disadvantages of electronic purchasing.
ADDITIONAL PROJECTS, ASSIGNMENTS, AND EXAMPLES

Projects

1. Identify a product that is bought and sold in a business-to-business context. Identify
individuals within the buying organization who fulfill the different roles of the buying
center. Identify as many for each role as possible, doing research where necessary. Point
out how some individuals might play more than one role. Is there a relationship between
some of the roles? Is that relationship always present?
2. Interview a purchasing agent from a company with regard to the major types of buying
situations. Have him or her identify at least one example for each of the three major
types. What are the main differences for them in these types of buys?
Small Group Assignments

1. Form students into groups of three to five. Each group should read Real Marketing 6.1:
International Marketing Manners. Then, answer the following questions and share their
answers with the class.
a. What can be done to keep us all from becoming “ugly Americans”?
b. What does the saying “When in Rome, do as the Romans do” mean to American
businesses? Provide an example or two.
c. Go online and further research business customs for any of the countries mentioned in
Real Marketing 6.1. What else did you discover about their practices that Americans
should know?
2. Form students into groups of three to five. Each group should read Real Marketing 6.2:
GE: A Model for B-to-B Digital and Social Media Marketing. Then, answer the
following questions and share their answers with the class.
a. Try to imagine the profile of the typical business buyer. How might that person differ
from the social media users you know at your college or university? How could these
differences affect the content and messaging you create on social media sites
designed for business customers?
b. Does it surprise you that the business community has embraced social media on such
a large scale? Why or why not?
c. Discuss a few of the marketing tasks for which social media is particularly well suited
to serve the business market.
Individual Assignments
1. Read Real Marketing 6.1: International Marketing Manners, and then answer the
following questions.
a. What is the “ugly American”?
b. How has American business gotten to the point where we believe everything should
be “American” when we travel? What does this say about us as a society?
c. Find a classmate from another country and speak with him or her about their
country’s customs. Which ones translate to business settings? What else did you learn
from this exercise?

2. Read Real Marketing 6.2: GE: A Model for B-to-B Digital and Social Media Marketing.
Then, answer the following questions.
a. When customers choose GE, what are they purchasing beyond an actual piece of
equipment? What does it mean to be an “industrial infrastructure company?”
b. Analyze the quote, “We are selling business-to-people.” What does it mean for
anyone engaged in B-to-B marketing?
c. Do you believe that digital and social marketing are passing B-to-B fads, or are they
here to stay? Explain your answer.
Think-Pair-Share
Consider the following questions, formulate an answer, pair with the student on your right, share
your thoughts with one another, and respond to questions from the instructor.
1. What are the primary differences between the consumer market and the business market?
2. What are the roles in the business purchase decision process? Can these same roles be
applied in the consumer decision process? Give a detailed example.
3. What are the advantages to business buying on the Internet?
4. How might a government buyer differ from a non-government institutional buyer?
Outside Examples
1. Intel microprocessors power just about all of the personal computers on the planet. Take
a look at Intel’s homepage and go to the section pertaining to the company
(www.intel.com/intel/company/index.htm?iid=about_intel+cr_faq). See what you can
find that gives you an idea of the scope of their market. Remember, business marketers
sell products to others for inclusion in that company’s product. If you were a company
wanting to use Intel chips in your products, how would you go about it?
Possible Solution:
A review of this website provides a substantial amount of information regarding Intel’s

clients. Specifically, students will find that Intel does not sell to resellers directly. Intel
has made a practice of selling only to a limited number of distributors. Any company
wishing to use Intel microprocessors is encouraged to contact and work through the
authorized distributor.
2. Walmart goes to great lengths to develop suppliers. Imagine you are a small manufacturer
of a new product and you want to sell to Walmart. How would you accomplish this feat?
(Go to http://walmartstores.com/suppliers/ for information to assist your work.)
Possible Solution:
This website gives potential suppliers everything they need to know to submit a
successful proposal to Walmart. Given that the students are to imagine themselves as a
small manufacturer, they will most likely make the decision to try and become a “local

supplier.” It is important for students to gain an understanding of the complexity involved
in business marketing. Additionally, it is just as important for them to realize that even a
small company has the potential to compete for business with a major national
organization.

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Starting the Discussion

Copyright© 2018 Pearson Education

Copyright© 2018 Pearson Education

Business-to-business (B-to-B) marketers must do their best to

p. 164 Business Markets

The business market is huge. In fact, business markets

The main differences between consumer and business

Even in large business markets, a few buyers often account

Business demand is derived demand. It ultimately derives

Many business markets have inelastic demand; that is, total

Often, business buying is done by trained purchasing agents

The more complex the purchase, the more likely that

p. 165 Types of Decisions and the Decision Process

Business buyers usually face more complex buying decisions

Copyright© 2018 Pearson Education

In the business buying process, buyer and seller are often

Review Learning Objective 1: Define the business market

p. 166 Business Buyer Behavior p. 167

Within the organization, buying activity consists of two

Major Types of Buying Situations

Copyright© 2018 Pearson Education

A company buying a product or service for the first time

PPT 6-11 Many business buyers prefer to buy a complete solution to a

Copyright© 2018 Pearson Education

Within the organization, the size and makeup of the buying

The buying center concept presents a major marketing

The buying center usually includes some obvious

Major Influences on Business Buyers

Business buyers are subject to many influences when they

When suppliers’ offers are very similar, business buyers

Business buyers are heavily influenced by factors in the

Copyright© 2018 Pearson Education

Organizational factors are also important. Each buying

Copyright© 2018 Pearson Education

The Business Buyer Decision Process

PPT 6-23 Problem recognition can result from internal or external

The buying organization next develops the item’s technical

Product value analysis is an approach to cost reduction in

The team decides on the best product characteristics and

p. 172 Supplier Search

Copyright© 2018 Pearson Education

Today, more and more companies are turning to the Internet

In the proposal solicitation stage of the business buying

When the item is complex or expensive, the buyer will

The buyer now prepares an order-routine specification. It

Copyright© 2018 Pearson Education

Many large buyers now practice vendor-managed inventory,

The eight-stage model provides a simple view of the

Review Learning Objective 3: List and define the steps in

Engaging Business Buyers with Digital and Social

PPT 6-28 E-Procurement and Online Purchasing

E-procurement reduces the time between order and delivery.

Beyond the cost and time savings, e-procurement frees

Business-to-Business Digital and Social Media Marketing

B-to-B digital and social media marketing involves using

Copyright© 2018 Pearson Education

Institutional and Government Markets

Much of this discussion also applies to the buying practices

Government organizations typically require suppliers to

Government organizations tend to favor domestic suppliers

Government buyers are affected by environmental,

Copyright© 2018 Pearson Education