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6-1

6-1

PRINCIPLES OF MARKETING

Business
Business Markets
Markets &
&
Business
Business Buyer
Buyer Behavior
Behavior

 Copyright 1999 Prentice Hall


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6-2

What
What is
is Business
Business Portfolio
Portfolio Planning?
Planning?

• Analyze current business portfolio


–BCG Matrix

• Develop growth/downsizing strategies


–Product/market expansion grid

 Copyright 1999 Prentice Hall


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What
What is
is aa Business
Business Market?
Market?
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• The Business Market - all the


organizations that buy goods and
services to use in the production of
other products and services that are
sold, rented, or supplied to others

• Business markets involve many more


dollars and items than consumer
markets

 Copyright 1999 Prentice Hall


Characteristics
Characteristics of
of Business
Business Markets
Markets
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6-4

Market
MarketStructure
Structureand
andDemand
Demand
••Fewer,
Fewer,larger
largerbuyers
buyers
••Geographically
Geographicallyconcentrated
concentrated
••Demand
Demandderived
derivedfrom
fromconsumers
consumers
••Inelastic
Inelasticdemand
demand
••Fluctuating
Fluctuatingdemand
demand
Nature
Natureof
ofthe
theBuying
BuyingUnit
Unit
••More
Morebuyers
buyers
••More
More professionalpurchasing
professional purchasing
effort
effort
Types
Typesof
ofDecisions
Decisions&&the
the
Decision
DecisionProcess
Process
••More
Morecomplex
complexdecisions
decisions
••Process
Process is moreformalized
is more formalized
••Buyer
Buyer and seller aremore
and seller are more
dependent on each other
dependent on each other
••Build
Buildclose
closelong-term
long-termrelationships
relationships
with
withcustomers
customers
 Copyright 1999 Prentice Hall
Model
Model of
of Business
Business Buyer
Buyer Behavior
Behavior
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6-5

Product Marketing Economic


Marketing and
and
Price Other
Other Stimuli
Stimuli Technological
Place Political
Promotion Cultural

Organizational The
The Buying
Buying Organization
Organization Interpersonal
The Buying Center
Influences and Individual
Buying Decision Influences
Process

Product or Service Delivery Terms


Choice and Times
Buyer’s
Buyer’s Response
Response
Supplier Choice Service Terms
Order Quantities Payment
 Copyright 1999 Prentice Hall
6-6
Business
Business Buying
Buying Situations
Situations
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New
New Task
Task Buying
Buying
Involved Decision Making

Modified
Modified Rebuy
Rebuy

Straight
Straight Rebuy
Rebuy

 Copyright 1999 Prentice Hall


Participants
Participants in
in the
the Business
Business Buying
Buying
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6-7

Process:
Process: The
The Buying
Buying Center
Center

Gatekeepers Users

Buying
Buying
Deciders Center
Center Influencers

Buyers

 Copyright 1999 Prentice Hall


6-8
Major
Major Influences
Influences on
on Business
Business Buying
6-8
Buying

Environmental
Environmental
Economic,
Economic,Technological,
Technological,Political,
Political,Competitive
Competitive&&Cultural
Cultural

Organizational
Organizational
Objectives,
Objectives,Policies,
Policies,Procedures,
Procedures,
Structure,
Structure,&&Systems
Systems
Interpersonal
Interpersonal
Authority,
Authority,Status,
Status,Empathy
Empathy&&
Persuasiveness
Persuasiveness
Individual
Individual
Age,
Age,Education,
Education,Job
JobPosition,
Position,Personality
Personality&&
Risk
RiskAttitudes
Attitudes

Buyers
Buyers

 Copyright 1999 Prentice Hall


6-9
Stages
Stages in
in the
the Business
Business Buying
Buying Process
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Process

Problem
Problem Recognition
Recognition

General
General Need
Need Description
Description

Product
Product Specification
Specification

Supplier
Supplier Search
Search

Proposal
Proposal Solicitation
Solicitation

Supplier
Supplier Selection
Selection

Order
Order Routine
Routine Specification
Specification

Performance
Performance Review
Review
 Copyright 1999 Prentice Hall
6-10
Institutional
Institutional and
and Government
Government Markets
Markets
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Institutional
Institutional Markets
Markets

Low
Low Budgets
Budgets Captive
Captive Patrons
Patrons

Government
Government Markets
Markets

Specialized
Specialized Buying
Buying Public
Public Review
Review

Outside
Outside Publics
Publics Open
Open Bids
Bids

Negotiated
Negotiated Contracts
Contracts
 Copyright 1999 Prentice Hall