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Analyzing Business

Markets
& Business Buying
Behavior
Marketing thinking is shifting from trying to
maximize company profit from each
transaction to maximizing the mutual profit
from each relationship
In this session we look at business,
institutional and government markets.
We will examine six questions

What is the business market, and how does it


differ from consumer markets?
What buying situations do organizational buyers
face?
Who participates in business buying process?
What are the major influences on organizational
buyers?
How do business buyers make their decision?
How do business and government agencies do
their buying?
What is organizational
Buying ?
Organizational buying is the decision
making process by which formal
organizations establish the need for
purchased products & services and
identify , evaluate & choose among
the suppliers & alternative brands
Business v/s Consumer
Markets
Major industries Characteristics of
making up business Organizational Buying
markets are Fewer Markets
Larger Buyers
Agriculture , Close Supplier customer relationships
Forestry, Geographically concentrated buyers
Fisheries, Derived Demand
Mining, Inelastic Demand
Manufacturing, Fluctuating Demand
Construction, Professional Purchasing
Transportation, Several buying Influences
Communication, Multiple calls
Public utilities, Direct Purchasing
Banking , finance, insurance Reciprocity
Distribution & Services Leasing
Buying situations
Straight Re-Buy Business buyer makes
Reorders on routine basis fewer decisions in
straight re-buy then in
Generally approved list of vendors
new buy
Automated ordering systems
New buyers seek for opportunities in inconsistency
Mass media is
of regular suppliers
important at the
Modified Re- Buy beginning stage
There is a constant possibility for change in Sales people most
specifications and products designs , specifications, important at
prices, delivery schedules, etc intermediate stage
Usually involves additional participants on both sides Technical people most
There is always a pressure to maintain the current important at evaluation
account stage
New Task
A purchaser buys the product for first time ( e.g. an Once the customer is
office building, a new security system ) acquired the suppliers
Greater cost or risk and hence higher number of make lot of effort to
participants value add constantly to
the account
Participants In Business Buying Behavior /
Process
Buying centre Influence & Targeting

Influence
Personal bias, knowledge , age ,etc
Seniority & type of experience and education

Targeting
Four types of target segments can be identified
Price oriented customers ( Transactional Selling )
Solution oriented Customers ( Consultative approach )
Gold standard Customers ( Quality Conscious )
Strategic value customers ( Enterprise selling long lasting relationship)

Solutions that customers seek :


Enhance revenues,
Decrease customers risk,
Reduce customer cost
Purchasing Procurement
Process
Institutional & Government Markets