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Chapter 7  ANALYZING BUSINESS MARKETS Kristine Bacsal-Flores Marketing Management MBAH Top 10 Concepts
Outline <ul><li>Overview: Organizational buying </li></ul><ul><li>Concepts </li></ul><ul><li>Business markets: </li></ul><...
<ul><ul><li>Marketers need to target efforts. </li></ul></ul><ul><ul><li>The buying process occurs in 8 stages. </li></ul>...
Organizational Buying <ul><li>The decision-making process by which formal organizations  </li></ul><ul><ul><li>establish t...
Concept 1  The business market  differs from    the consumer market <ul><li>Business market  </li></ul><ul><ul><li>organiz...
<ul><li>Fewer, larger buyers </li></ul><ul><li>Close supplier-customer relationships </li></ul><ul><li>Professional purcha...
<ul><li>Examples </li></ul><ul><li>Kotler: Goodyear contracts from car makers </li></ul><ul><li>Local: Philam insurance pa...
Utilities Office Supplies Bulk chemicals New vehicles Elec. Equip Computer equip. Office building Security systems Concept...
<ul><li>*EXAMPLES </li></ul><ul><ul><li>Kotler: modified rebuy - Orica Ltd </li></ul></ul><ul><ul><li>Local: straight - in...
Concept 3  Participants play any of 7 roles  Approvers Buyers Gatekeepers Initiators Influencers Deciders Users Buying Cen...
<ul><li>Examples </li></ul><ul><ul><li>Kotler: surgical gown supplier for hospitals </li></ul></ul><ul><ul><li>-  purchasi...
Concept 4  Various factors influence buying    centers
<ul><li>Kotler: apply previous example </li></ul><ul><li>Local: environment - handicraft companies producing lahar-based p...
Concept 5   Business marketers must target      efforts to efficiently acquire and keep    customers <ul><li>Who are the d...
<ul><li>Examples </li></ul><ul><ul><li>Kotler: Symantec executive sponsorship program </li></ul></ul><ul><ul><li>Local: Bi...
Problem Recognition Post Purchase Purchase Info Search/ Eval Need Recognition Concept 6   8 stages in the buying process  ...
<ul><li>Examples </li></ul><ul><ul><li>Kotler: need description and product specification -  Hewlett-Packard  “trusted adv...
Concept 7   Internet facilitates procurement:    e-procurement <ul><li>Direct extranet links to major suppliers  </li></ul...
<ul><li>Examples </li></ul><ul><ul><li>Kotler: Covisint </li></ul></ul><ul><ul><li>Local: PLDT Clark Telecom using BuySite...
Concept 8  Buyer-supplier relationships affect    business processes. <ul><li>Basic buying and selling </li></ul><ul><li>B...
<ul><li>Examples </li></ul><ul><ul><li>Kotler: Motoman and Stillwater Technologies (collaborative) </li></ul></ul><ul><ul>...
Concept 9  Opportunism is a form of      cheating relative to a contract. Buyer Supplier Monitor C H E A T
<ul><li>Examples </li></ul><ul><ul><li>Kotler: Ford and Lear Corporation </li></ul></ul><ul><ul><li>Local: Smartmatic  </l...
Concept 10  Institutions and Governments    are also business markets. <ul><li>Institutions:  </li></ul><ul><ul><li>School...
<ul><li>Governments </li></ul><ul><li>Spending decisions based on public review </li></ul><ul><li>Strict protocols followe...
SUMMARY <ul><li>Business markets: </li></ul><ul><ul><li>differ from consumer markets </li></ul></ul><ul><ul><li>are affect...
<ul><ul><li>Marketers need to target efforts. </li></ul></ul><ul><ul><li>There are 8 stages in the buying process. </li></...
CONCLUSION <ul><li>Business markets </li></ul><ul><li>Dynamic </li></ul><ul><li>Create and capture value  </li></ul><ul><l...
Chapter 7  ANALYZING BUSINESS MARKETS Kristine Bacsal-Flores Marketing Management MBAH Top 10 Concepts
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  • Derived – derived from demand for consumer goods Inelastic- not much affected by price changes eg oil for airlines Fluctuating – more volatile
  • Once customer is acquired – suppliers mmust seek ways to add value to their market offer to facilitate rebuys. Orica- Australian explosives co. – used by quarries – research/ feedback from customers – improve performance and get desired outcome
  • Buying center – decision making unit of buying organization Users- those who will use products/ service Initiators- may also be users Influencers – technicalpersonnel are impt Buyers – authorized to select supplier and arrange purchase terms – high level managesr Approvers – authorize proposals of deciders or buyers Gatekeepers – have power to prevent sellers/ infor from reaching members of buying center – purchasing agents, receptionists, tel operators
  • OR admin – Personal - selection of suppliers based on previous experience, research/ industry knowledge Organizational – ISO-certified only policy
  • Symantec executives partnered with executives of key customer organizations to understand business concerns and develop products that fit their needs
  • VALUE-ADDED SERVICE HP determined need to sell self as advisor offering solutions to unique problems – advisory role when selling complex products like comp networks –to not only meet but EXCEED a buyer’s needs
  • Extranet – set up accounts with dell or office depot and employees can make purchases Buying alliances- transora, covisint – companies join forces to obtain lower prices for raw materials Buying sites – where companies posts requests for proposals, negotiates terms and places orders
  • Bayan trade – knowledge process outsourcing provider
  • Basic – simple, routine exchanges with mod hi coop and info exchange Bare bones – as above, less coop and info exchange Contractual – low levels of trust, coop – formal contract Customer supply – competition is dominant form of governance Cooperative – coupled operationally but no legal structural commitment/ adaptation approaches Collaborative – much trust and commitment – true partnership Mutually adaptive – much relationship but not necessarily strong trust/ coop Customer is king – close coop relationship but seller adapts to customers needs
  • robotic systems – tooling and machinery; office and manufacturing in same facility; linked telecom ESTABLISH STRONG RELATIOSHIPS AND ADD VALUE SOME BUYERS WANT ONLY TRANSACTIONAL RELATIONSHIPS
  • Blatant self interst or deliberate misrepresentation; may shirk/cheat/not deliver expected value Opportuisms – firms must devote resources to control and monitoring that otherwise could be allocated to more productive3 purposes 96 Ford taurus - lear committed to a contract it knew it couldn’t fulfill – missed deadlines, failed to meet weight &amp; price objectives, furnished parts that didn’t work
  • Transcript of "V49 ch7 business_markets_kristine_bacsal_flores"

    1. 1. Chapter 7 ANALYZING BUSINESS MARKETS Kristine Bacsal-Flores Marketing Management MBAH Top 10 Concepts
    2. 2. Outline <ul><li>Overview: Organizational buying </li></ul><ul><li>Concepts </li></ul><ul><li>Business markets: </li></ul><ul><ul><li>differ from consumer markets </li></ul></ul><ul><ul><li>are affected by buying situations </li></ul></ul><ul><ul><li>have 7 types of participants </li></ul></ul><ul><ul><li>are influenced by several factors </li></ul></ul>
    3. 3. <ul><ul><li>Marketers need to target efforts. </li></ul></ul><ul><ul><li>The buying process occurs in 8 stages. </li></ul></ul><ul><ul><li>Internet facilitates procurement. </li></ul></ul><ul><ul><li>Buyer-supplier relationships are important. </li></ul></ul><ul><ul><li>Opportunism is a form of cheating relative to a contract. </li></ul></ul><ul><ul><li>Institutions and governments are business markets. </li></ul></ul>Outline (cont)
    4. 4. Organizational Buying <ul><li>The decision-making process by which formal organizations </li></ul><ul><ul><li>establish the need for purchased products and services </li></ul></ul><ul><ul><li>Identify, evaluate and choose among alternative brands and suppliers </li></ul></ul>
    5. 5. Concept 1 The business market differs from the consumer market <ul><li>Business market </li></ul><ul><ul><li>organizations that acquire goods and services used in the production of goods and services that are sold, rented or supplied to others </li></ul></ul>
    6. 6. <ul><li>Fewer, larger buyers </li></ul><ul><li>Close supplier-customer relationships </li></ul><ul><li>Professional purchasing </li></ul><ul><li>Many buying influences </li></ul><ul><li>Multiple sales calls </li></ul><ul><li>Geographically concentrated buyers </li></ul><ul><li>Derived, inelastic, fluctuating demands </li></ul>Concept 1 The business market differs from the consumer market
    7. 7. <ul><li>Examples </li></ul><ul><li>Kotler: Goodyear contracts from car makers </li></ul><ul><li>Local: Philam insurance package sold to companies vs sold to individuals </li></ul><ul><li>Medical: spectacles sold to optical shops vs individual patients </li></ul>Concept 1 The business market differs from the consumer market
    8. 8. Utilities Office Supplies Bulk chemicals New vehicles Elec. Equip Computer equip. Office building Security systems Concept 2 Buying situations affect business decisions <ul><li>Involved Decision Making </li></ul>Modified Rebuy New Task Buying Straight Rebuy
    9. 9. <ul><li>*EXAMPLES </li></ul><ul><ul><li>Kotler: modified rebuy - Orica Ltd </li></ul></ul><ul><ul><li>Local: straight - internet providers - PLDT SUN Globe – good coverage; improve speeds </li></ul></ul><ul><ul><li>Medical: new and modified - phaco machines and model improvements/ enhancements </li></ul></ul>Concept 2 Buying situations affect business decisions. Add value to facilitate rebuys
    10. 10. Concept 3 Participants play any of 7 roles Approvers Buyers Gatekeepers Initiators Influencers Deciders Users Buying Center
    11. 11. <ul><li>Examples </li></ul><ul><ul><li>Kotler: surgical gown supplier for hospitals </li></ul></ul><ul><ul><li>- purchasing VP/OR admin/MDs </li></ul></ul><ul><ul><li>Local: textile suppliers for RTW companies </li></ul></ul><ul><ul><li>eg Kamiseta, Bayo </li></ul></ul><ul><ul><li>Medical: viscoat in NKTI pharmacy </li></ul></ul>Concept 3 Participants play any of 7 roles Approvers Buyers Gatekeepers Initiators Influencers Deciders Users
    12. 12. Concept 4 Various factors influence buying centers
    13. 13. <ul><li>Kotler: apply previous example </li></ul><ul><li>Local: environment - handicraft companies producing lahar-based products following Mt Pinatubo eruption </li></ul><ul><li>Medical: personal - eye center spectacle purchasing </li></ul>Concept 4 Various factors influence buying centers
    14. 14. Concept 5 Business marketers must target efforts to efficiently acquire and keep customers <ul><li>Who are the decision makers </li></ul><ul><li>What decisions do they influence </li></ul><ul><li>What is their level of influence </li></ul><ul><li>What evaluation criteria do they use </li></ul>
    15. 15. <ul><li>Examples </li></ul><ul><ul><li>Kotler: Symantec executive sponsorship program </li></ul></ul><ul><ul><li>Local: BizBox IT system – BGH </li></ul></ul><ul><ul><li>Medical: pharma companies sending MDs to conferences </li></ul></ul>Concept 5 Business marketers must target efforts to efficiently acquire and keep customers
    16. 16. Problem Recognition Post Purchase Purchase Info Search/ Eval Need Recognition Concept 6 8 stages in the buying process Product Specification Proposal Solicitation Supplier Selection Order Routine Specification Performance Review
    17. 17. <ul><li>Examples </li></ul><ul><ul><li>Kotler: need description and product specification - Hewlett-Packard “trusted advisor; everything is possible” </li></ul></ul><ul><ul><li>Local: problem recognition - Jollibee seafood offerings for holy week </li></ul></ul><ul><ul><li>Medical: supplier search - for alternative intraocular lenses (eg MSM, Hoya) </li></ul></ul>Concept 6 8 stages in the buying process
    18. 18. Concept 7 Internet facilitates procurement: e-procurement <ul><li>Direct extranet links to major suppliers </li></ul><ul><li>Buying alliances for lower raw material prices </li></ul><ul><li>Company buying sites </li></ul>
    19. 19. <ul><li>Examples </li></ul><ul><ul><li>Kotler: Covisint </li></ul></ul><ul><ul><li>Local: PLDT Clark Telecom using BuySite applic of Bayan Trade </li></ul></ul><ul><ul><li>Medical: procuring hospital supplies on line </li></ul></ul>GM, Ford, Chrysler Concept 7 Internet facilitates procurement: e-procurement
    20. 20. Concept 8 Buyer-supplier relationships affect business processes. <ul><li>Basic buying and selling </li></ul><ul><li>Bare bones </li></ul><ul><li>Contractual transaction </li></ul><ul><li>Customer supply </li></ul><ul><li>Cooperative systems </li></ul><ul><li>Collaborative </li></ul><ul><li>Mutually adaptive </li></ul><ul><li>Customer is king </li></ul>
    21. 21. <ul><li>Examples </li></ul><ul><ul><li>Kotler: Motoman and Stillwater Technologies (collaborative) </li></ul></ul><ul><ul><li>Local: The Oasis and Hizons (cooperative) </li></ul></ul><ul><ul><li>Medical: pharma companies and Mercury (customer is king) </li></ul></ul><ul><ul><li> </li></ul></ul>Concept 8 Buyer-supplier relationships affect business processes.
    22. 22. Concept 9 Opportunism is a form of cheating relative to a contract. Buyer Supplier Monitor C H E A T
    23. 23. <ul><li>Examples </li></ul><ul><ul><li>Kotler: Ford and Lear Corporation </li></ul></ul><ul><ul><li>Local: Smartmatic </li></ul></ul><ul><ul><li>Medical: IT supplier of NKTI </li></ul></ul>Concept 9 Opportunism is a form of cheating relative to a contract.
    24. 24. Concept 10 Institutions and Governments are also business markets. <ul><li>Institutions: </li></ul><ul><ul><li>Schools, hospitals, nursing homes, prisons </li></ul></ul><ul><li>Low budgets </li></ul><ul><li>Captive clientele </li></ul><ul><li>Examples </li></ul><ul><li>Kotler - ARAMARK Corp and US prisons </li></ul><ul><li>Local – NBS supplying schools </li></ul><ul><li>Medical – Fresenius and NKTI; pharma companies and private hospitals </li></ul>
    25. 25. <ul><li>Governments </li></ul><ul><li>Spending decisions based on public review </li></ul><ul><li>Strict protocols followed – bidding, red tape </li></ul><ul><li>Examples </li></ul><ul><li>Kotler – ADI Technology spending on bids </li></ul><ul><li>Local – NBN deal </li></ul><ul><li>Medical – supplier bidding at PGH </li></ul>Concept 10 Institutions and Governments are also business markets.
    26. 26. SUMMARY <ul><li>Business markets: </li></ul><ul><ul><li>differ from consumer markets </li></ul></ul><ul><ul><li>are affected by various buying situations </li></ul></ul><ul><ul><li>have many participants, each playing any of 7 roles </li></ul></ul><ul><ul><li>are influenced by several factors </li></ul></ul>
    27. 27. <ul><ul><li>Marketers need to target efforts. </li></ul></ul><ul><ul><li>There are 8 stages in the buying process. </li></ul></ul><ul><ul><li>Internet facilitates procurement. </li></ul></ul><ul><ul><li>Buyer-supplier relationships are important. </li></ul></ul><ul><ul><li>Opportunism is a form of cheating. </li></ul></ul><ul><ul><li>Business markets also exist in institutions and governments. </li></ul></ul>SUMMARY
    28. 28. CONCLUSION <ul><li>Business markets </li></ul><ul><li>Dynamic </li></ul><ul><li>Create and capture value </li></ul><ul><li>Understand needs, resources and buying procedures </li></ul>
    29. 29. Chapter 7 ANALYZING BUSINESS MARKETS Kristine Bacsal-Flores Marketing Management MBAH Top 10 Concepts

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