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6

Analyzing Business
Markets
Chapter Questions

 What is the business market, and how does


it differ from the consumer market?
 What buying situations do organizational
buyers face?
 Who participates in the business-to-
business buying process?

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-2
United States edition of Marketing Management, 14e.
Chapter Questions

 How do business buyers make their


decisions?
 How can companies build strong
relationships with business customers?
 How do institutional buyers and government
agencies do their buying?

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-3
United States edition of Marketing Management, 14e.
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.

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-4
United States edition of Marketing Management, 14e.
Top Marketing Challenges
 Understanding customer needs in new ways;
 Identifying new opportunities for growth;
 Improving value management techniques
 Calculating better marketing performance and
accountability metrics;
 Competing and growing in global markets
 Countering the threat of product and service
commoditization
 Convincing C-level executives to embrace the
marketing concept

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-5
United States edition of Marketing Management, 14e.
Characteristics of
Business Markets
 Fewer buyers  Multiple sales calls
 Close supplier-  Derived demand
customer  Inelastic demand
relationships  Fluctuating demand
 Professional  Geographically
purchasing concentrated buyers
 Many buying  Direct purchasing
influences

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-6
United States edition of Marketing Management, 14e.
Buying Situation

Straight Rebuy

Modified Rebuy

New Task

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-7
United States edition of Marketing Management, 14e.
Systems Buying and Selling

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-8
United States edition of Marketing Management, 14e.
The Buying Center

 Initiators  Approvers
 Users  Buyers
 Influencers  Gatekeepers
 Deciders

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-9
United States edition of Marketing Management, 14e.
Of Concern to Marketers

 Who are the major decision participants?


 What decisions do they influence?
 What is their level of influence?
 What evaluation criteria do they use?

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-10
United States edition of Marketing Management, 14e.
Stages in the Buying Process:
Buyphases
 Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order-routine specification
 Performance review

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-11
United States edition of Marketing Management, 14e.
Table 6.1 Buygrid Framework

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-12
United States edition of Marketing Management, 14e.
Forms of Electronic Marketplaces

 Catalog sites
 Vertical markets
 Pure play auction sites
 Spot markets
 Private exchanges
 Barter markets
 Buying alliances

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-13
United States edition of Marketing Management, 14e.
Table 6.2 An Example of
Vendor Analysis

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-14
United States edition of Marketing Management, 14e.
Methods for Researching
Customer Value
 Internal engineering  Conjoint analysis
assessment  Benchmarks
 Field value-in-use  Compositional
assessment approach
 Focus-group value  Importance ratings
assessment
 Direct survey
questions

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-15
United States edition of Marketing Management, 14e.
Order Routine Specification

 Stockless purchase plans


 Vendor-managed inventory
 Continuous replenishment

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-16
United States edition of Marketing Management, 14e.
Categories of Buyer-Seller
Relationships

 Basic buying and  Cooperative


selling systems
 Bare bones  Collaborative
 Contractual  Mutually adaptive
transaction  Customer is king
 Customer supply

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-17
United States edition of Marketing Management, 14e.
Institutional Markets

The institutional market consists of schools,


college and university hostels, hospitals and
nursing homes, and other institutions that
provide goods and services to people in their
care. Many of these organizations are
characterized by low budgets and captive
clienteles.

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-18
United States edition of Marketing Management, 14e.
For Review

 What is the business market, and how does


it differ from the consumer market?
 What buying situations do organizational
buyers face?
 Who participates in the business-to-business
buying process?

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-19
United States edition of Marketing Management, 14e.
For Review

 How do business buyers make their


decisions?
 How can companies build strong relationships
with business customers?
 How do institutional buyers and government
agencies do their buying?

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from the 6-20
United States edition of Marketing Management, 14e.