The document discusses business buying behavior and the business buying process. It explains that business buying involves more complex decisions than consumer buying and often multiple people within an organization. The buying process can include initiators who identify the need, users of the product, influencers, deciders, approvers, and buyers. Environmental factors like the economy, materials shortages, and technology can also influence business buying decisions. Business purchases are generally made to support the production of other goods and services.

1. Marketing Information
system & Consumer Buying
behavior

2. Chapter Questions
 What are the components of a modern
marketing information system?
 What are useful internal records?
 What is involved in a marketing
intelligence system?
 What are the key methods for tracking
and identifying opportunities in the
macro environment?
 What are some important macro
environment developments?

3. What is a Marketing Information System
(MIS)?
A marketing information system
consists of people, equipment, and
procedures to gather, sort, analyze,
evaluate, and distribute needed,
timely, and accurate information to
marketing decision makers.

4. Marketing Information is the Foundation of the Value
Delivery Endeavour of the Firm
 Marketing Planning, Implementation, and Control, All
Rest on Marketing Information
• As knowledge becomes a major input in managing
businesses, importance of information keeps growing
From data to information to knowledge
• Marketing information becomes marketing knowledge/intellectual
capital
Attributes of good marketing information
Designing a Marketing Information System (MIS)
 Why do we need a system to handle marketing
information?
 MIS has to serve as a DSS (decision support system)
 MIS must be a unified system

5. Internal Records and
Marketing Intelligence
Order-to-Payment
Cycle
(e.g. Sales reps.,
dealers,
sales invoices)
Databases,
Warehousing,
Data Mining
Marketing
Intelligence
System
Sales
Information
System
(reports of
currents sales)

6. Data, Information, and Knowledge
Data are any facts, numbers, or text that can be processed by a
computer. Today, organizations are accumulating vast and growing
amounts of data in different formats and different databases. This
includes:
• operational or transactional data such as, sales, cost, inventory,
payroll, and accounting
• Non-operational data, such as industry sales, forecast data, and
macro economic data
• meta data - data about the data itself, such as logical database
design or data dictionary definitions
Information The patterns, associations, or relationships among all
this data can provide information. For example, analysis of retail point
of sale transaction data can yield information on which products are
selling and when

7.  Knowledge Information can be converted
into knowledge about historical patterns and
future trends.
 For example, summary information on retail
supermarket sales can be analysed in light of
promotional efforts to provide knowledge of
consumer buying behaviour. Thus, a manufacturer or
retailer could determine which items are most
susceptible to promotional efforts.
 Customer Relationship Management (CRM)
 Companies capture information at every possible
customer touch point.
 Customer relationship management (CRM) is used to
manage detailed information about individual
customers and carefully manage customer touch
points in order to maximize customer loyalty.

8.  Data mining is primarily used today by companies
with a strong consumer focus -
retail, financial, communication, and marketing
organizations
 It enables these companies to determine
relationships among "internal" factors such as
price, product positioning, or staff skills, and
"external" factors such as economic
indicators, competition, and customer
demographics
 It enables them to determine the impact on
sales, customer satisfaction, and corporate profits.
Finally, it enables them to "drill down" into
Data Mining

9.  with the data mining a retailer could use point-of-sale
records of customer purchases to send targeted
promotions based on an individual's purchase history
 Wal-Mart captures point-of-sale transactions from over
2,900 stores in 6 countries and continuously transmits this
data to its massive 7.5 terabyte Teradata data
warehouse. Wal-Mart allows more than 3,500 suppliers,
to access data on their products and perform data
analyses. These suppliers use this data to identify
customer buying patterns at the store display level

10. Data mining consists of five major elements:
 Extract, transform, and load transaction
data onto the data warehouse system.
 Store and manage the data in a
multidimensional database system.
 Provide data access to business analysts
and information technology professionals.
 Analyse the data by application software.
 Present the data in a useful format, such
as a graph or table.

11.  Data mining provides the link between the two. Data mining software
analyses relationships and patterns in stored transaction data based on
open-ended user queries, data mining applications are available on all size
systems for mainframe, client/server, and PC platforms
 Classes: Stored data is used to locate data in predetermined groups. For
example, a restaurant chain could mine customer purchase data to
determine when customers visit and what they typically order. This
information could be used to increase traffic by having daily specials
 Clusters: Data items are grouped according to logical relationships or
consumer preferences. For example, data can be mined to identify market
segments or consumer affinities.
 Associations: Data can be mined to identify associations. E.g. weekend
offers might not be available in weekdays
 Sequential patterns: Data is mined to anticipate behaviour patterns and
trends. For example, an outdoor equipment retailer could predict the
likelihood of a backpack being purchased based on a consumer's
purchase of sleeping bags and hiking shoes.
How does Data mining work?

13. Architecture to Support E-Mail Campaigns and Response
Management (CRM-ready Data Warehouse)

14.  The Data Warehouse system is a
complete, powerful, scalable, and
customizable intelligent data warehouse
solution, which optionally offers the most
complete analytic functionality available
on the market, fully integrated into the
system
 “Data warehouses store current as well as
historical data and are used for creating
trending reports for senior management
reporting such as annual and quarterly
comparisons.”
DATAWAREHOUSE

15.  Marketing Intelligence System. (MIS) :
(MIS) Consists of people, equipment, and procedures
to gather, sort, analyse, evaluate and distribute
timely and accurate information to decision makers
 Consumer Intelligence System:
This provides useful information on a customer’s
business, preferences or loyalties, personal
demographic details
 Competition Intelligence: This gives information on
strengths and weaknesses of each competitor in
the territory, the strategy and the tactics being
used by them.
Marketing Intelligence System

16. Managers collect info in variety of different
ways:
 Reading books
 Newspapers
 Trade publications
 Talking to customers
 Suppliers
 Distributors
 Monitoring social media on internet
 meeting with other co.'s managers

18.  Hyderabad: An advocate in
Hyderabad was shocked after
finding a dead rat in his Real
Active+ fruit drink on Friday. The
advocate, Achyut Rao, is also a
child rights activist in the city. He is
set to approach the consumer
forum soon.
 According to Rao, the fruit juice
pack was purchased along with
four others from a local eatery on
Thursday. “On Friday, I opened one
of the tetra packs and was struck
by an unbearable stink coming
from it. When I tried to poured the
juice, the nozzle was obstructed. I
squeezed the pack harder and a
squashed body of a dead rat
came out,” he claimed.
 Mr Rao says he will be approaching
the consumer forum. While saying
that he was sure this was an
accident, he
added, “Dabur, which owns the
Real brand, is a reputed company.
The company must ensure that its
customers get its fullest attention.”

19. Consumer Intelligence

21.  Customer satisfaction
 Creative and effective marketing
strategy
 Realities of the company
Its competitors Strengths and weaknesses
 Realities of the marketplace
Opportunities and threats
 Competitive advantage
 Anticipate the competitive move and
develop competitive strategies
Purposes of Marketing Intelligence:

22. Analyzing the Meta-Environment
Demographic
EconomicPolitical-Legal
Socio-CulturalTechnological
Natural

23.  Educational groups: who
can read, who can’t
read, who can read&
write, illiterate etc.
 Household patterns:
rural, urban, semi-urban,
tribe's etc.
 Population growth
 Population age mix:
Fastrack by Titan. Spirit;
bravo By Bajaj. MTV,
Channel V (youth
target), Bacardi Tagline
“be what you want to
be”
 Ethnic markets:
The GODREJ Agrovet: Best known for the Real
Good Chicken and Yummiez brands, is now a JV
with Tyson Foods and has 45% market share in
processed poultry.
For example:
 Many Chinese prefer pork and poultry.
Most Hindus are vegetarian but some do
consume meat (though it is not likely to
be beef or horse).
 Jews who keep kosher will eat kosher
beef, goat, lamb and poultry but not
horse, pork or rabbit.
 Muslims will eat halal beef, goat, horse,
lamb, rabbit and poultry and avoid pork.
 Many Hispanics, especially those from
the Caribbean, enjoy goat meat as do
many from the Middle East, southeast
Asia, north Africa and Greece. Horse
meat is a delicacy in Japan, is widely
consumed in francophone Canada and
is popular in Belgium, France, Italy and
many other European countries as well

Population and Demographics

24. Steps to Improve Marketing Intelligence
Train sales force to scan for new developments
Motivate channel members to share
intelligence
Network externally
Utilize a customer advisory panel
Utilize government data resources
Purchase information
Collect customer feedback
online

25.  Define the problem and research objective: A
marketing research project might have one of three
types of objectives
 Exploratory research: to gather preliminary
information that will help define the problem and
suggest hypotheses.
 Descriptive research: to describe things, such as the
market potential for a product
 Causal research: to test hypotheses about
cause-and-effect relationships.
 develop the research plan: primary & secondary
data
 collect the information: surveys, telephonic, internet,
personal interviewing
 analyze the information
 present the findings
 decision making
MIS PROCESS

26. 1. Observational research
2. Focus Group
3. Survey Research
4. Behavioral research
INSTRUMENT OF RESEARCH
 questionnaire
 qualitative techniques
 quantitative techniques
 technological devices
Research approaches

27.  sampling unit: whom should we survey?
 sample size: how many people should
we survey?
 sampling procedures: how should we
choose the respondents?
 mail contact
 personal contacts
 online contacts
Sampling plan

28.  Managers of small businesses and nonprofit
organizations can obtain marketing insights by
observing things around them.
 Managers can conduct informal surveys using
small convenience samples.
 Managers can glean a wealth of competitive
data and information by turning to the Internet.
Marketing Research in Small
Businesses and Nonprofit
Organizations

29.  International marketing researchers follow the same
steps as domestic researchers.
 The international researcher may have a difficult time
finding good secondary data.
 International researchers often must collect their own
primary data.
 Reaching respondents is often not easy in other parts
of the world.
 Few international research agencies like
 GALLUP
 NIELSEN
 MOODY’S
 BOSTON CONSULTING GROUP
International Marketing Research

30. Sources of Competitive Information
 Independent customer goods and
service review forums
 Distributor or sales agent feedback sites
 Combination sites offering customer
reviews and expert opinions
 Customer complaint sites
 Public blogs

31. Intrusions on Consumer Privacy
 Many consumers strongly resent or even mistrust
marketing research.
 Increasing consumer resentment has led to lower
survey response rates in recent years.
 The best approach is for researchers to ask only for
the information they need, to use it responsibly to
provide customer value, and to avoid sharing
information without the customer’s permission.
Misuse of Research Findings
 Many research studies appear to be little more than
vehicles for pitching the sponsor’s products.
 Several associations have developed codes of
research ethics and standards of conduct
Public Policy and Ethics in
Marketing Research

32. THE BUYER DECISION MAKING
PROCESS

33. Case let
Less than one-third of GE’s annual
sales come from consumer
products. The vast majority of sales
for GE come from commercial and
industrial customers across a wide
range of industries.
GE locomotives might not seem
glamorous, but they provide big
dollars to the bottom line. The
challenge is to win buyers’ business
by building day-in, day-out, year-in,
year-out partnerships with them
based on superior products and
close collaboration.
Locomotive performance is only
part of the buying equation. GE
wins contracts by partnering with
business customers to help them
translate that performance into
moving their passengers and freight
more efficiently and reliably.
Business customer buying decisions
are made within the framework of a
strategic, problem-solving
partnership. Says GE chairman and
CEO Immelt, “We are viewed as a
technical partner by customers
around the world.”
• Why does GE have to go to such
lengths to help their customers
succeed?
• What is GE doing when it
“partners” with an industrial
customer?

34. What is Organization/Business Buying
Business buyer behavior refers to the buying behavior of the
organizations that buy goods and services for use in the production of
other products and services that are sold, rented, or supplied to others.
It also includes the behavior of retailing and wholesaling firms that
acquire goods for the purpose of reselling or renting them to others at a
profit.
The business market is huge. In fact, business markets involve far more
dollars and items than do consumer markets.
The main differences between consumer and business markets are in
market structure and demand, the nature of the buying unit, and the
types of decisions and the decision process involved.

35.  The business marketer normally deals with far
fewer but far larger buyers than the consumer
marketer does.
 Even in large business markets, a few buyers
often account for most of the purchasing.
 Business demand is derived demand—it
ultimately derives from the demand of
consumer goods. B2B marketers sometimes
promote their products directly to final
consumers to increase business demand.
 Business markets are more geographically
concentrated. More than half the business
buyers are concentrated in eight states.

Market Structure and Demand

36. Characteristics of Business Markets
 Fewer, larger buyers
 Close supplier-
customer
relationships
 Professional
purchasing
 Many buying
influences
 Multiple sales calls
 Derived demand
 Inelastic demand
 Fluctuating
demand
 Geographically
concentrated
buyers
 Direct purchasing

37.  Business buyers usually face more complex buying
decisions than do consumer buyers.
 Purchases often involve large sums of money, complex
technical and economic considerations, and
interactions among many people at many levels of the
buyer’s organization.
 The business buying process also tends to be more
formalized than the consumer buying process.
 In the business buying process, buyer and seller are
often much more dependent on each other.
 Many customer companies are now practicing supplier
develop-ment, systematically developing networks of
supplier-partners to ensure an appropriate and
dependable supply of products and materials that they
will use in making their own products or reselling to
others.
TYPES OF DECISIONS AND THE DECISION PROCESS

39.  Compared with consumer purchases, a
business purchase usually involves more
decision participants and a more
professional purchasing effort.
 Often, business buying is done by trained
purchasing agents who spend their
working lives learning how to buy better.
 The more complex the purchase, the
more likely that several people will
participate in the decision-making
process.

Nature of the Buying Unit

40. Major Types of Buying Situations
Straight rebuy:
the buyer reorders something without any modifications. It is usually
handled on a routine basis by the purchasing department
Modified rebuy
the buyer wants to modify the product specifications, prices,
terms, or suppliers. The modified rebuy usually involves more
decision participants than does the straight rebuy.
New task
A company buying a product or service for the first time
faces a new task situation. In such cases, the greater the
cost or risk, the larger the number of decision participants
and the greater their efforts to collect information will be.

41. Systems Buying and Selling
Turnkey solution
desired;
bids solicited
Prime
contractors
Second-tier
contractors
System
subcomponents
assembled

42. PARTCIPANTS IN THE BUSINESS
BUYING PROCESS

43. The Buying Center
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers

44. Environmental Factors:
 Business buyers are heavily influenced by factors in the current
and expected economic environment, such as the level of
primary demand, the economic outlook, and the cost of
money.
 shortages in key materials are creating situations for many
companies to buy and hold larger inventories of scarce
materials to ensure adequate supply. Business buyers also are
affected by technological, political, and competitive
developments in the environment
 Culture and customs can strongly influence business buyer
reactions to the marketer’s behavior and strategies, especially
in the international marketing environment.
Business buyers respond to both economic and personal factors. They
react to both reason and emotion
BUYING CENTER INFLUENCE

45.  Organizational Factors:
Each buying organization has its own objectives, policies,
procedures, structure, and systems, and the business
marketer must understand those factors as well.
 Interpersonal Factors:
The buying center usually includes many participants who
influence each other; so interpersonal factors also influence
the business buying process. It is often difficult to assess such
interpersonal factors and group dynamics.
 Individual Factors:
Age, income, education, job position, personality, and risk
attitudes.
Each participant in the business buying-decision process
brings in personal motives, perceptions, and preferences.
These individual factors are affected by personal
characteristics such as age, income, education,
professional identification, personality, and attitudes toward
risk.
Continued…..

46. The purchasing &
procurement process

47.  Some MNC’s now a days implementing
“strategic supply department” viz.
purchasing, inventory control, production
scheduling, combined into one
department.
 Business Marketers Must Upgrade Their Sales
Personnel To Match The Higher Caliber Of
The Business Buyers
 “surveyed that buying group was more
involved in new product-development than
it was 5r years ago”
 decentralizing small ticket items, resulting
less paper work and increasing efficiency
The purchasing department

48. Stages in the Organizational Buying
Process
 Problem recognition:
Internally, the company may decide to launch a new
product that requires new production equipment and
materials. Externally, the buyer may get some new
ideas at a trade show, see an ad, or receive a call from
a salesperson who offers a better product or a lower
price.
 General need description:
For standard items, this process presents few problems.
For complex items, however, the buyer may have to
work with others—engineers, users, and consultants—to
define the item.
 Product specification: For standard items, this process
presents few problems. For complex
items, however, the buyer may have to work with
others—engineers, users, and consultants—to define
the item.

49.  Supplier search:
Search to find the best vendors. The buyer can compile a small
list of qualified suppliers by reviewing trade directories, doing a
computer search, or phoning other companies for
recommendations.
E.G Us Recruiters Depends On Huge Vendor Listings To Market It
Consultants For Various Projects
 Proposal solicitation:
Buyer invites qualified suppliers to submit proposals.
When the item is complex or expensive, the buyer will usually
require detailed written proposals or formal presentations from
each potential supplier.
 Supplier selection:
Buyers may attempt to negotiate with preferred suppliers for
better prices and terms before making the final selections. In
the end, they may select a single supplier or a few suppliers.
Many BUYERS PREFER MULTIPLE SOURCES OF
SUPPLIERS TO AVOID BEING TOTALLY DEPENDENT ON
ONE SUPPLIER AND TO ALLOW COMPARISONS OF
PRICES AND PERFORMANCE OF SEVERAL SUPPLIERS
OVER TIME.

50.  Order-routine specification:
The final order with the chosen supplier or suppliers
and lists items such as technical specifications,
quantity needed, expected time of delivery, return
policies, and warranties.
In The Case Of Maintenance, Repair, And Operating
Items, Buyers May Use Blanket Contracts Rather
Than Periodic Purchase Orders. A Blanket Contract
Creates A Long-term Relationship In Which The
Supplier Promises To Resupply The Buyer As Needed
At Agreed Prices For A Set Time Period.
 Performance review:
Buyer may contact users and ask them to rate their
satisfaction. This review may lead the buyer to
continue, modify, or drop the arrangement.

52.  Electronic purchasing (E-procurement) is now standard
procedure in most companies.
 E-procurement gives buyers access to new suppliers and
lower purchasing costs, and hastens order processing
and delivery. In turn, business marketers can connect
with customers online to share marketing information, sell
products and services, provide customer support
services, and maintain ongoing customer relationships.
 Companies can conduct reverse auctions or engage in
online trading exchanges.
E-PROCUREMENT: BUYING ON THE INTERNET

53.  Companies can also conduct e-
procurement by setting up their own
company buying sites or by setting up
extranet links with key suppliers.
 E-procurement reduces the time between
order and delivery. Time savings are
particularly dramatic for companies with
many overseas suppliers.
 Beyond the cost and time savings, e-
procurement frees purchasing people to
focus on more strategic issues.
 The use of e-procurement also presents some
problems.
E-PROCUREMENT: BUYING ON THE INTERNET

54.  Institutional Markets
 The institutional market consists of schools, hospitals, nursing homes, prisons, and other
institutions that provide goods and services to people in their care. Institutions differ from
one another in their sponsors and in their objectives.
 Many institutional markets are characterized by low budgets and regular customers
 Many marketers set up separate divisions to meet the special characteristics and needs
of institutional buyers.
 Government Market
 The government market offers large opportunities for many companies, both big and
small.
 Government buyers are asked to favor depressed business firms and areas; small business
firms; minority-owned firms; and business firms that avoid race, gender, or age
discrimination.
 Many firms that sell to the government have not been marketing oriented.
 Total government spending is determined by elected officials rather than by any
marketing effort to develop this market.
 Government buying has emphasized price, making suppliers invest their effort in
technology to bring costs down.
 When the product’s characteristics are specified carefully, product differentiation is not a
marketing factor.
 Nor do advertising or personal selling much matter in winning bids on an open-bid basis.