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Transcript of ©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 0 in...
To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 7©2003 Prentice Hall, Inc.
PowerPoint by Karen E. James Louisiana State University - Shreveport
Chapter 7
Analyzing Analyzing Business Markets Business Markets
and Buyer and Buyer BehaviorBehavior
To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 7©2003 Prentice Hall, Inc.
Objectives
Understand the nature of the business market and how it differs from the consumer market.
Learn how institutions and government agencies buy.
Identify the different buying situations faced by organizational buyers.
To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 7©2003 Prentice Hall, Inc.
Objectives
Identify the participants in the business buying process and the various influences impacting business buying decisions.
Understand how business buyers make their decisions.
To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
Organizational buying is:
“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.”
To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
Fewer buyersFewer buyers
Larger buyersLarger buyers
Geographically Geographically concentrated buyersconcentrated buyers
Closer relationships with Closer relationships with suppliers/customerssuppliers/customers
Compared to Consumer Markets, Business Markets Have:
To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
Leasing
Multiple buying influences
Fluctuating demand
Reciprocity
Inelastic demand
Professional purchasing
Direct purchasing
Derived demand
Multiple sales calls
Other Other Business Business
Market Market CharacteristicsCharacteristics
To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
The Business Market Includes For-Profit Companies and Two Specialized Groups:
– The institutional market• Schools, hospitals, prisons, etc. with captive
audiences
• Cost and quality standards drive purchases
– The government market• Bidding process awards contracts
To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 7©2003 Prentice Hall, Inc.
Discussion Scenario
Your firm is interested in targeting the government market.
How might this decision influence the marketing mix?
How is selling to the government market different from selling to other business markets? How do needs differ?
To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
Fedmarket assists those businesses seeking to do business with the federal government.
To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
Buying Situations
Straight rebuy
Modified rebuy
New task
Routine reorders from approved vendor list
Low involvement, minimal time commitment
Example: copier paper
To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
Buying Situations
Straight rebuy
Modified rebuy
New task
Specifications, prices, delivery terms or other aspects require modification
Moderate level of involvement and time commitment
Example: desktop computers
To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
Buying Situations
Straight rebuy
Modified rebuy
New task
Purchasing a product or service for the first time
High level of involvement and time commitment; multiple influences
Example: selecting a web site design firm or consultant
To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 7©2003 Prentice Hall, Inc.
Organizational Buying
Systems Buying
– A single provider provides the total package for the buyer’s needs
– May involve turnkey solutions Systems Selling
– Manufacturers sell entire systems– Supplier provides all MRO items
To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 7©2003 Prentice Hall, Inc.
Discussion Scenario
Suppose that your company has decided to bid on a theme park development project using a systems selling approach.
What types of tasks might your proposal include? Is systems selling appropriate for this project?
To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 7©2003 Prentice Hall, Inc.
Participants in Business Buying
Gatekeepers
Roles Played in a Buying Center
Influencers
Users
Initiators
Buyers
Deciders
Approvers
To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 7©2003 Prentice Hall, Inc.
Influences on Business Buyers
Figure 7-1: Major Influences on
Business Buying Behavior
To accompany A Framework for Marketing Management, 2nd Edition Slide 17 in Chapter 7©2003 Prentice Hall, Inc.
Influences on Business Buyers
Major Influences
Environmental
Organizational
Interpersonal
Individual
Demand level
Economic outlook
Interest rates
Technological change
Politics/regulations
Competition
Concerns for social responsibility
To accompany A Framework for Marketing Management, 2nd Edition Slide 18 in Chapter 7©2003 Prentice Hall, Inc.
Influences on Business Buyers
Major Influences
Environmental
Organizational
Interpersonal
Individual
Objectives
Policies
Procedures
Organizational structures
Systems
To accompany A Framework for Marketing Management, 2nd Edition Slide 19 in Chapter 7©2003 Prentice Hall, Inc.
Influences on Business Buyers
Plastics.com offers buyers and sellers of plastics a marketplace plus news and information
To accompany A Framework for Marketing Management, 2nd Edition Slide 20 in Chapter 7©2003 Prentice Hall, Inc.
Influences on Business Buyers
Major Influences
Environmental
Organizational
Interpersonal
Individual
Interests
Authority
Status
Empathy
Persuasiveness
To accompany A Framework for Marketing Management, 2nd Edition Slide 21 in Chapter 7©2003 Prentice Hall, Inc.
Influences on Business Buyers
Major Influences
Environmental
Organizational
Interpersonal
Individual
Age
Income
Education
Job position
Personality
Risk attitudes
Culture
To accompany A Framework for Marketing Management, 2nd Edition Slide 22 in Chapter 7©2003 Prentice Hall, Inc.
Discussion Scenario
Age, income, and education are three individual factors which may influence business purchasing behavior.
How do these factors influence purchasing behavior? Do individual factors influence decision making to the same degree as environmental, organizational, or interpersonal factors?
To accompany A Framework for Marketing Management, 2nd Edition Slide 23 in Chapter 7©2003 Prentice Hall, Inc.
Purchasing/Procurement Process
Eight Buyphases of Industrial BuyingProblem Recognition
General Need Description
Product Specification
Supplier Search
Proposal Solicitation
Supplier Selection
Performance Review
Order-Routine Specification