MARKETING MANAGEMENT BY SIR ASHNA.MGT1.pptx

1. MARKETING
MANAGEMENT
TABESH UNIVERSITY
Sir Hayatullah Ashna

2. YOU WILL LEARN ABOUT
 BUSINESS BUYING
 BUYING CENTRE
 STAGES IN BUSINESS BUYING
 FACTORS INFLUENCING BUSINESS BUYING

3. BUSINESS BUYING
 Business/industrial market consists of:
Business Firms (manufacturers, wholesaler and retailers).
Governments (central, state and local).
Organizations (universities, hospitals).
Business buying behavior, the personal needs and goals play a secondary role;
here the formal organization structure influences the buying process. The
process of organizational buying behavior is complex. It’s carried out
consciously and in a more formalized manner.

4. DIFFERENCE BETWEEN BUSINESS BUYING AND CONSUMER BUYING
No Business buying Consumer buying
1 Raw material. Final product.
2 Bulk purchase. Small quantity as per requirement.
3 Fixed specifications. No fixed specification.
4 Organized purchase. Any time purchase.
5 Price no bar. Price affects purchase decision.
6 Purchase of need satisfier only. Purchase of products with or without any need possible.
7 Cost effective purchase, brand has no value. Brand plays major role.
8 Purchase by decision making body. Purchase by consumer.

5. BUSINESS BUYING CENTER
The decision making unit of a buying organization products, the buying center, it consist of all those individuals and groups
who participate in the purchasing decisions making process. The buying center includes all members of the organization
who play any of seven role in the purchase decision process:
1. Initiators: Users or others in organization who request that something be purchased.
2. Users: Those who will use the product or services.
3. Influencers: People who influence the buying decision, often by helping define specifications and providing information
for evaluating alternatives. Technical personnel.

6. Con…
4. Deciders: People who decide on product requirements or on suppliers.
5. Approvers: People who authorize the proposed actions of deciders or buyers.
6. Buyers: People who have formal authority to select the supplier and arrange the
purchase terms.
7. Gatekeepers: People who have the power to prevent sellers or information from
reaching members of the buying centers. Purchasing agents, receptionists, telephone
operators, may prevent sales persons from contacting users or deciders.

7. BUSINESS BUYING PROCESS
The business buyer’s decision making is an eight stage process:
 Need recognition: This is the stage where customer perceives a need for the product. But
the exact specification of the products is generally not defined at this stage. Typically this is
the stage where the customer has a problem and is looking for acceptable solution.
 Product specification: This is the stage where customer is more specific about what he is
looking for. He lays down specifications for product he is looking for. He also spells out the
services he is looking for or as per his requirement.

8.  Laying down qualification for potential vendors: At times, organizational buyers lay down the
qualification for potential vendors. This is one of the ways where the buyer is able to screen out a
large number of vendors who may not be able to meet his requirements. Here the buyer lays
down the technical and commercial qualification for potential vendors.
 Inviting proposals for qualified vendors: This is the stage when proposals often sealed are
invited from qualified vendors. These invitations are either and open tender notice to all
prequalified vendors or the suppliers. They may float an enquiry to seek proposal from only a few
prequalified vendors.

9. • Evaluating the proposals: The proposals are evaluated for their technical contents
capability to meet the customer’s requirements.
• Selecting the vendor: Once the technical evaluation is completed and vendors are short
listed for final selection, commercial evaluation of the proposal is done. Also, vendors
accessed more closely on their competence in meeting their customer’s requirement.
This is the stage where negotiation takes place. Having evaluated and negotiated the
vendors are then selected.

10.  Determination of the order size and placement of order: During this stage the buyer determines
the size of the order lot. In case the product in question is raw material or any other consumable,
this stage will involve determining specific quantities customer wants at specific time intervals.
But if the customers have selected two or more suppliers, he may choose to apportion the order
among them at this stage.
 Review and feedback: This is very critical stage for the seller. Generally the buyer views the
performance of the vendors and also obtains feedbacks from all the departments using supplier’s
products. The buyer then gives a feedback to the seller by either repeating his purchase or reducing
or increasing the quantity of material purchased or may float a subsequent enquiry only to those
suppliers who have lived up to his expectations.

11. FACTORS INFLUENCES BUSINESS BUYING BEHAVIOR
 Economic Influence: Business buying behavior is influenced by the economic
factors affecting business. When the economy is growing at a high rate, there
would be higher demand for product and services required to fulfill by business
the growing demand from the market.
 Political Influence: The political climate prevailing in the country is a major
influence in the buying behavior of business. Business flourishes in a more or less
stable political environment.

12.  Legal Influence: These include legal infrastructure, the set of legislature that
govern individuals and organizations, including consumer protection, labor
protection, minimum wages, employees unionization as well as the overall law
and order situation determine the outlook of business and also the approach of the
business to implement innovative projects and grow.
 Supplier’s Influence: The supplier can influence the buying behavior of business
in a number of ways. The supplier may organized unit or belongs to the small
scale sector. Big industries may not want to buy product especially high
technology oriented or complex product from a small firm.

13.  Technological Influence: Technological changes are not easy to introduce,
but become inevitable if the industry trends indicate the need for them.
Organization need to be aware of the trends and adopt suitable measures for
technology adoption of new technology.
 Customer Influence: If a buyer is buying a product for further processing or
use in another product that goes into the market, it’s imperative for the
business to understand the market.

14. • Government Influence: the government of the land yields a lot of influence in the
buying behavior of organizations. This influence is the result of the law making
and regulatory powers the government has.
• Labor Influence: the labor situation in a country and the availability of appropriate
or trainable manpower at considerably low cost will determine the buying decision
of the business. For instance, in these days of globalization, industries are located
where there are labors advantages and process and products are out-sourced to
location where there is cost advantage of labors.

15. THE END