Kotler • KellerPhillip Kevin Lane

Marketing Management • 14e

Analyzing Business Markets

Chapter 7

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 3 of 27

Discussion Questions

1. What is the business market, and how does it differ from the consumer market?

2. What buying situations do organizational buyers face?

3. Who participates in the B2B buying process?

4. How do business buyers make their decisions?

5. How can companies build strong relationships with business customers?

6. How do institutional buyers and government agencies do their buying?

Defined

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 4 of 27

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.

-- F. Webster Jr and Y. Wind

Organizational Buying

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 5 of 27

Business Markets

Agriculture

Communications

Banking & Finance

Transportation & Distribution

Construction

ForestryManufacturing

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 6 of 27

Business Markets

• Understanding deep customer needs

• Identify areas for growth

• Improving value management techniques

• Calculating better marketing metrics

• Competing and growing in global markets

• Countering product commoditization

• Gain support for the marketing concept

Similarities to the Consumer Market

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 7 of 27

Business Markets

Professional Buyers

Geographically Concentrated

Multiple Sales Calls

Differences to the Consumer Market

Personal Relationships

Fewer, Larger Buyers

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 8 of 27

Business Markets

Demand•Derived•Inelastic•Fluctuating

Derived Demand

Differences to the Consumer Market

Fluctuating Demand

Inelastic Demand

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 9 of 27

Buying Situations

Straight Rebuy New Task

Modified Rebuy

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 10 of 27

Systems Buying and Selling

Buyer

Prime Contractor

Second-tier Contractors

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 11 of 27

Business Buying Participants

Influencer

Buyers Gatekeeper

DeciderInitiator/Users

Approver

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 12 of 27

Buying Center Influences

Participants differ by:• Interest• Authority• Status• Persuasiveness• Decision criteria

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 13 of 27

Targeting Firms and Buying Centers

Who to target?

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 14 of 27

Purchasing/Procurement Process

Diverse supplier base

Benefits vs. Costs

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 15 of 27

Stages in the Buying Process

Description and Characteristics

Order Specification

Performance Review

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 16 of 27

Stages in the Buying Process

Internal stimuli

•New product being developed

•Broken machine

•Low stock level

External stimuli

•Trade show visit

•Advertisement

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 17 of 27

Stages in the Buying Process

Technical specifications• Reliability

• Durability

• Price

Description and Characteristics

Product value analysis

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 18 of 27

Stages in the Buying Process

Trade directories

Trade advertisements

Trade shows

E-Procurement Lead generation

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 19 of 27

Stages in the Buying Process

Formal presentation

Written

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 20 of 27

Stages in the Buying Process

Supplier-evaluation model

Number of suppliers

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 21 of 27

Order Specification

Stages in the Buying Process

Technical specifications

Quantity

Delivery time

Return policy

Warranties

Stockless purchase

plan

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 22 of 27

Stages in the Buying Process

End user evaluations

Weighted-score

method

Performance Review

7 9 4

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 23 of 27

Buyclasses

New Task Modified Rebuy

Straight Rebuy

1. Problem Recognition Yes Maybe No2. General need description Yes Maybe No3. Product specification Yes Yes Yes4. Supplier search Yes Maybe No5. Proposal solicitation Yes Maybe No6. Supplier Selection Yes Maybe No7. Order-routine specification Yes Maybe No8. Performance review Yes Yes Yes

Buygrid FrameworkBu

ypha

ses

Table 7.1

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 24 of 27

Managing B2B Relationships

One-to-one Marketing

Online social media

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 25 of 27

Managing B2B Relationships

Vertical Coordination

Relationship FactorsAvailability of alternativesImportance of supplyComplexity of supplySupply market dynamism

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 26 of 27

Buyer-Seller Relationship Categories

Customer is king

Collaborative

Mutually adaptiveContractual transaction

Cooperative systems

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 27 of 27

Institutional and Governments Markets

Schools

Hospitals

Prisons

Government agencies