B2 b ch 7


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  • B2 b ch 7

    1. 1. Business Markets
    2. 2. 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?
    3. 3. 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?
    4. 4. CISCO Targets Businesses
    5. 5. What is Organizational Buying?Organizational buying refers to the decision-making process by which formal organizations establishthe need for purchased products and services, and identify, evaluate, andchoose among alternative brands and suppliers.
    6. 6. Top Business Marketing Challenges• Expand understanding of customer needs• Compete globally as China and India reshape markets• Master analytical tools and improve quantitative skills• Reinstate innovation as an engine of growth• Create new organizational models and linkages
    7. 7. Characteristics of Business Markets• Fewer, larger • Multiple sales calls buyers • Derived demand• Close supplier- • Inelastic demand customer • Fluctuating demand relationships • Geographically• Professional concentrated buyers purchasing • Direct purchasing• Many buying influences
    8. 8. Buying SituationStraight rebuy Modified rebuy New task
    9. 9. Systems Buying and SellingTurnkey solution System desired; subcomponents bids solicited assembled Prime Second-tier contractors contractors
    10. 10. The Buying Center Initiators Users Influencers Deciders Approvers Buyers Gatekeepers
    11. 11. Of Concern 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?
    12. 12. Sales Strategies Key BuyingSmall Sellers Influencers MultilevelLarge Sellers In-depth Selling
    13. 13. Stages in the Buying Process: Buyphases• Problem recognition• General need description• Product specification• Supplier search• Proposal solicitation• Supplier selection• Order-routine specification• Performance review
    14. 14. Table 7.2 Buygrid Framework
    15. 15. Forms of Electronic Marketplaces
    16. 16. Methods of e-Procurement• Websites organized using vertical hubs• Websites organized using functional hubs• Direct extranet links to major suppliers• Buying alliances• Company buying sites
    17. 17. Table 7.3 Vendor Analysis
    18. 18. Handling Price-Oriented Customers Limit quantity purchased Allow no refunds Make no adjustments Provide no services
    19. 19. Methods for Researching Customer Value• Internal engineering • Conjoint analysis assessment • Benchmarks• Field value-in-use • Compositional assessment approach• Focus-group value • Importance ratings assessment• Direct survey questions
    20. 20. Order Routine Specification Stockless purchase plansVendor-managed inventory Continuous replenishment
    21. 21. Establishing Corporate Trust and Credibility ExpertiseTrustworthiness Likeability
    22. 22. Figure 7.1 Trust Dimensions Cooperating Transparent DesignProduct/Service Product Quality Comparison Incentive Supply Chain Pervasive Partnering Advocacy
    23. 23. Factors AffectingBuyer-Supplier Relationships Availability of Importance of alternatives supply Complexity of Supply market supply dynamism
    24. 24. Categories of Buyer-Seller Relationships• Basic buying and • Cooperative selling systems• Bare bones • Collaborative• Contractual • Mutually adaptive transaction • Customer is king• Customer supply
    25. 25. What is Opportunism? Opportunism is some form ofcheating or undersupply relative to an implicit or explicit contract.
    26. 26. Marketing of Farm Output from Rural Areas• Contract Farming – Pepsi• Procuring from Cooperatives – Amul• Use ICT for procurement – ITC
    27. 27. Marketing Debate how different is B-to-B marketing?Take a position:4. Business-to-business marketingrequires a special, unique set of marketingconcepts and principles.or2. Business-to-business marketing is reallynot that different and the basic marketingprinciples apply.
    28. 28. Marketing Discussion Consider some of the consumerbehavior topics from Chapter 6. How might you apply them to business-to-business settings?