bmgt_411 marketing management fall 2014 chris lovett

1. BGMT 411: Chapter 6
Analyzing Business Markets

2. Boeing 787 Dreamliner, 3 Million Parts,
500 Suppliers

3. 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?

4. 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?

5. Local Examples
• While these businesses all
operate in the B2C Space,
many B2B suppliers call on
these businesses and need to
market to them as well
• Can you think of any examples
of vendors that would market to
these companies?

6. Local Examples
• IT Solutions
• Supplies
• Product
• Text Books

7. 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.

8. Characteristics of Business Markets (Page
86)
• Fewer, larger buyers
• Close supplier-customer
relationships
• Professional purchasing
• Many buying influences
• Multiple sales calls
• Derived demand
• Inelastic demand
• Fluctuating demand
• Geographically concentrated
buyers
• Direct purchasing

9. Buying Situation
• Straight rebuy
• Reordering of supplies on a routine basis, usually with current
suppliers and automatic reorders
• Modified rebuy
• The buyer wants to change the product specs, prices, delivery, etc.
This usually opens the door to out suppliers
• New task
• Buys a new product or service for the first time

10. Buygrid Framework

11. The Buying Center
• Initiators: Those who request that something be purchased.
• Users: Those who will use the product or service. In many cases, the users initiate the buying
proposal.
• Influences: People who influence the buying decision by defining specifications and providing
information for evaluating alternatives. Technical personnel are particularly important influences.
• Decider: People who decide on product requirements and or on suppliers.
• Approvers: People who authorize the proposed actions of deciders or buyers.
• Buyers: People who have formal authority to select the supplier and arrange the purchase terms.
• Gatekeepers: People who have the power to prevent sellers or information from reaching to
members of the buying center. e.g. purchasing agents, receptionists, and telephone operators may
prevent sales

12. Concerns to Business Marketers
• Who are the major decision participants?
• What decisions do they influence?
• What is their level of influence?
• What evaluation criteria do they use?

13. Stages in the Buying Process: Buy phases
1.Problem recognition: Someone identifies that a problem can be
solved by purchasing a new good or service
2.General need description: Buyer determines the items
characteristics and quantities needed
3.Product specification: (PVA) Product Value Analysis, reducing the
cost to make a product
4.Supplier search: The buyer reaches out to suppliers or auction sites

14. Stages in the Buying Process: Buy phases
5.Proposal solicitation: Not all buyers ask for an RFP (Request for
Proposals) but government buyers must
6.Supplier selection: Final suppliers selected from the field and
chosen by the buying process
7.Order-routine specification: The final order is placed with all details
listed
• MRO: Maintenance, Repair, Operations
8.Performance review: Evaluating suppliers in a structured process, or
less structured, depending on the business

15. http://
contracts.patreasury.gov/
search.aspx