+

ANALYZING BUSINESS MARKETSChapter 7, Kotler & Keller

+Six Questions Covered

+I) Business versus Consumer Market

Close relationshipProfessional purchasingMult. buying influences, sales

Fewer, large buyers

+I) Business versus Consumer Market

Direct purchasing Concentrated buyersDemand

+II) Buying Situation

STRAIGHT

MODIFIED

Supplier

New Task

Marketer’s greatest opportunity and

challenge

Purchaser

+II) Buying Situation

SYSTEMS BUYING

Primary Contractor

Second-tier Contractor

SYSTEMS SELLING

Key industrial marketing strategy for large-scale

projects

+II) Buying Situation Building cement factory

SYSTEMS SELLING

TRUE SYSTEMS SELLING=

SYSTEMS SELLING +

+III) Business-to-business buying 1. Buying Center

Purchasing Manager

Initiators

Users

Influencers

Deciders

ApproversBuyers

Gatekeepers

+III) Business-to-business buying

Corporate brand

2. Buying Center Influences 3. Buying Center Targeting

Small seller

Large sellerOrganisation Economic,

strategic

Individual Achievemen

t, reward

+IV) Purchasing/Procurement

Staged buying-decision : Buy-phases (8)

Decision Making

(1) Problem recognition

MarketersProduct spec.

(2-3) Need and product specification

MultipleSingle

+IV) Purchasing/ProcurementDecision Making

(4) Supplier Search

E-procurement

Direct linksAlliancesRFPs

Advantageous

+IV) Purchasing/ProcurementDecision Making

(5) Proposal solicitation

FormalSimple products

(6) Supplier selection

Beauty Contest

PriceReputationProduct reliabilityService reliabilitySupplier flexibility

Next: Price pressure, # of suppliers

+IV) Purchasing/ProcurementDecision Making

(7) Order-routine specification

(8) Performance review

EvaluationRatingPerformance vs. price

Final orderTech. spec.Qty neededDeliveryReturn policyWarranties

+V) Customer Relationships

Create more value, establish trust.

Advertising agencies and clients:

(a)Market growth

(b)Information asymmetry

(c) Barriers to entry

(d)Dependence asymmetry

(e)Economies of scale

+

Buyer-Supplier relationship: Alternatives, importance of supply, supply complexity and supply market dynamism.

V) Customer Relationships

+

Buyer-Supplier relationship: Alternatives, importance of supply, supply complexity and supply market dynamism.

V) Customer Relationships

+

Institutional markets

VI) Institutional, Govt. Markets

Characterized by: Low budgets and captive clienteles

+

Government markets

VI) Institutional, Govt. Markets

Suppliers bid, contracts go to lowest bids

Spending subject to public review

Can be nationalistic

Cumbersome: Comprehensive bid can be 500-700 pages

+Summary

Think BUYDecide

Organizational buying

Decision making process

Business market

Few large buyers

Buying center

Decision making unit

+Summary

Think BUYDecide

Buying process

Eight buyphases

Business marketers

Strong bonds,values

Inst., Govt markets

Customer, Supplier