6

Analyzing
Business Markets

Marketing Management, 13th ed

 What is Organizational Buying?

Organizational buying refers

to the decision-making process by
which formal organizations establish
the need for purchased products and
services, and identify, evaluate, and
choose among alternative brands
and suppliers.

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 Business Markets Defined

• The business market consists of all the

organizations that acquire goods &
services used in the production of other
products or services that are sold,
rented or supplied to others.

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 Business Markets

• The major industries making up the

business market are agriculture,
fisheries, mining, manufacturing,
construction, transportation,
communication, public utilities, banking
& finance, distribution & service.

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 Characteristics of Business Markets

• Fewer, larger • Multiple sales calls

buyers • Derived demand
• Close supplier- • Inelastic demand
customer • Fluctuating demand
relationships
• Geographically
• Professional
concentrated buyers
purchasing
• Direct purchasing
• Many buying
influences

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 Buying Situation

• Straight rebuy
• Modified rebuy
• New task

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 The Buying Center

• Initiators • Approvers
• Users • Buyers
• Influencers • Gatekeepers
• Deciders

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 Stages in the Buying Process:
Buyphases
• Problem recognition
• General need description
• Product specification
• Supplier search
• Proposal solicitation
• Supplier selection
• Order-routine specification
• Performance review

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 Methods of e-Procurement

• Websites organized using vertical hubs

• Websites organized using functional
hubs
• Direct extranet links to major suppliers
• Company buying sites

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 Handling Price-Oriented Customers

• Limit quantity purchased

• Allow no refunds
• Make no adjustments
• Provide no services

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