Chapter 8 Analyzing Business Markets and Business Buying Behavior by <ul><li>PowerPoint by </li></ul><ul><li>Milton M. Pre...
Kotler on  Marketing <ul><ul><li>Many businesses are wisely turning their suppliers and distributors into valued partners....
Chapter Objectives <ul><li>In this chapter, we focus on six questions: </li></ul><ul><ul><li>What is the business market, ...
What is Organizational Buying? <ul><ul><li>Organizational buying </li></ul></ul><ul><li>The business market versus the con...
What is Organizational Buying? <ul><ul><ul><li>Derived demand </li></ul></ul></ul><ul><ul><ul><li>Inelastic demand </li></...
What is Organizational Buying? <ul><ul><ul><li>Several buying influences </li></ul></ul></ul><ul><ul><ul><li>Multiple sale...
What is Organizational Buying? <ul><li>Buying Situations </li></ul><ul><ul><li>Straight rebuy </li></ul></ul><ul><ul><li>M...
What are some of the benefits to an organization that can be derived from a  single source solution , or a  systems buying...
Participants in the Business Buying Process <ul><li>The Buying Center </li></ul><ul><ul><li>Initiators </li></ul></ul><ul>...
Major Influences on Buying Decisions <ul><li>Interpersonal and Individual Factors </li></ul><ul><li>Cultural Factors </li>...
The Purchasing/ Procurement Process <ul><ul><ul><li>Incentive to purchase </li></ul></ul></ul><ul><ul><li>Three Company Pu...
Table 8.1: Buygrid Framework: Major Stages (Buyphases) of the Industrial Buying Process in Relation to Major Buying Situat...
The Purchasing/ Procurement Process <ul><ul><li>General Need Description and  Product Specification </li></ul></ul><ul><ul...
Table 8-2: An Example of Vendor Analysis Total score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5 x .10 Supplier Flex...
The Purchasing/ Procurement Process <ul><ul><ul><li>Customer value assessment </li></ul></ul></ul><ul><ul><ul><li>Routine-...
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Ch08a

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Ch08a

  1. 1. Chapter 8 Analyzing Business Markets and Business Buying Behavior by <ul><li>PowerPoint by </li></ul><ul><li>Milton M. Pressley </li></ul><ul><li>University of New Orleans </li></ul>
  2. 2. Kotler on Marketing <ul><ul><li>Many businesses are wisely turning their suppliers and distributors into valued partners. </li></ul></ul>
  3. 3. Chapter Objectives <ul><li>In this chapter, we focus on six questions: </li></ul><ul><ul><li>What is the business market, and how does it differ from the consumer market? </li></ul></ul><ul><ul><li>What buying situations do organizational buyers face? </li></ul></ul><ul><ul><li>Who participates in the business buying process? </li></ul></ul><ul><ul><li>What are the major influences on organizational buyers? </li></ul></ul><ul><ul><li>How do business buyers make their decisions? </li></ul></ul><ul><ul><li>How do institutions and government agencies do their buying? </li></ul></ul>
  4. 4. What is Organizational Buying? <ul><ul><li>Organizational buying </li></ul></ul><ul><li>The business market versus the consumer market </li></ul><ul><ul><li>Business market </li></ul></ul><ul><ul><ul><li>Fewer buyers </li></ul></ul></ul><ul><ul><ul><li>Larger buyers </li></ul></ul></ul><ul><ul><ul><li>Close supplier-customer relationship </li></ul></ul></ul><ul><ul><ul><li>Geographically concentrated buyers </li></ul></ul></ul>
  5. 5. What is Organizational Buying? <ul><ul><ul><li>Derived demand </li></ul></ul></ul><ul><ul><ul><li>Inelastic demand </li></ul></ul></ul><ul><ul><ul><li>Fluctuating demand </li></ul></ul></ul><ul><ul><ul><li>Professional purchasing </li></ul></ul></ul>
  6. 6. What is Organizational Buying? <ul><ul><ul><li>Several buying influences </li></ul></ul></ul><ul><ul><ul><li>Multiple sales calls </li></ul></ul></ul><ul><ul><ul><li>Directed purchasing </li></ul></ul></ul><ul><ul><ul><li>Reciprocity </li></ul></ul></ul><ul><ul><ul><li>Leasing </li></ul></ul></ul>
  7. 7. What is Organizational Buying? <ul><li>Buying Situations </li></ul><ul><ul><li>Straight rebuy </li></ul></ul><ul><ul><li>Modified rebuy </li></ul></ul><ul><ul><li>New Task </li></ul></ul><ul><li>Systems Buying and Selling </li></ul><ul><ul><li>Systems buying </li></ul></ul><ul><ul><li>Turnkey solution </li></ul></ul><ul><ul><li>Systems selling </li></ul></ul>
  8. 8. What are some of the benefits to an organization that can be derived from a single source solution , or a systems buying arrangement with a prime contractor? What are some of the potential pitfalls? What can the company do to protect itself from these hazards? Discussion Question
  9. 9. Participants in the Business Buying Process <ul><li>The Buying Center </li></ul><ul><ul><li>Initiators </li></ul></ul><ul><ul><li>Users </li></ul></ul><ul><ul><li>Influencers </li></ul></ul><ul><ul><li>Deciders </li></ul></ul><ul><ul><li>Approvers </li></ul></ul><ul><ul><li>Buyers </li></ul></ul><ul><ul><li>Gatekeepers </li></ul></ul><ul><ul><ul><li>Key buying influencers </li></ul></ul></ul><ul><ul><ul><li>Multilevel in-depth selling </li></ul></ul></ul>
  10. 10. Major Influences on Buying Decisions <ul><li>Interpersonal and Individual Factors </li></ul><ul><li>Cultural Factors </li></ul><ul><ul><li>France </li></ul></ul><ul><ul><li>Germany </li></ul></ul><ul><ul><li>Japan </li></ul></ul><ul><ul><li>Korea </li></ul></ul><ul><ul><li>Latin America </li></ul></ul>
  11. 11. The Purchasing/ Procurement Process <ul><ul><ul><li>Incentive to purchase </li></ul></ul></ul><ul><ul><li>Three Company Purchasing Orientations </li></ul></ul><ul><ul><ul><li>Buying Orientation </li></ul></ul></ul><ul><ul><ul><ul><li>Commoditization </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Multisourcing </li></ul></ul></ul></ul><ul><ul><ul><li>Procurement Orientation </li></ul></ul></ul><ul><ul><ul><ul><li>Materials requirement planning (MRP) </li></ul></ul></ul></ul><ul><ul><ul><li>Supply Chain Management Orientation </li></ul></ul></ul>
  12. 12. Table 8.1: Buygrid Framework: Major Stages (Buyphases) of the Industrial Buying Process in Relation to Major Buying Situations (Buyclasses) Yes Yes Yes 8. Performance review No Maybe Yes 7. Order-routine specification No Maybe Yes 6. Supplier selection No Maybe Yes 5. Proposal solicitation No Maybe Yes 4. Supplier search Buyphases Yes Yes Yes 3. Product specification No Maybe Yes 2. General need description No Maybe Yes 1. Problem recognition Rebuy Rebuy Task Straight Modified New Buyclasses
  13. 13. The Purchasing/ Procurement Process <ul><ul><li>General Need Description and Product Specification </li></ul></ul><ul><ul><ul><li>Product value analysis </li></ul></ul></ul><ul><ul><li>Supplier Search </li></ul></ul><ul><ul><ul><li>Vertical hubs </li></ul></ul></ul><ul><ul><ul><li>Functional hubs </li></ul></ul></ul><ul><ul><ul><li>Direct extranet links to major suppliers </li></ul></ul></ul><ul><ul><ul><li>Buying alliances </li></ul></ul></ul><ul><ul><ul><ul><li>Company buying sites </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Request for proposals (RFPs) </li></ul></ul></ul></ul>
  14. 14. Table 8-2: An Example of Vendor Analysis Total score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5 x .10 Supplier Flexibility x .10 Service reliability x .30 Product reliability x .20 Supplier reputation x .30 Price Excellent (4) Good (3) Fair (2) Poor (1) Importance Weights Rating Scale Attributes
  15. 15. The Purchasing/ Procurement Process <ul><ul><ul><li>Customer value assessment </li></ul></ul></ul><ul><ul><ul><li>Routine-order products </li></ul></ul></ul><ul><ul><ul><li>Procedural-problem products </li></ul></ul></ul><ul><ul><ul><li>Political-problem products </li></ul></ul></ul><ul><ul><li>Order-Routine Specification </li></ul></ul><ul><ul><ul><li>Blanket contract </li></ul></ul></ul><ul><ul><ul><li>Stockless purchase plans </li></ul></ul></ul><ul><ul><li>Performance Review </li></ul></ul><ul><ul><ul><li>Buyflow map </li></ul></ul></ul>

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