chapter 7 analyzing business markets

Phillip

Kevin Lane

Kotler • Keller
Marketing Management • 14e


Analyzing Business
Markets


Discussion Questions
1. What is the business market, and how does it differ
from the consumer market?
2. What buying situations do organizational buyers face?
3. Who participates in the B2B buying process?
4. How do business buyers make their decisions?
5. How can companies build strong relationships with
business customers?
6. How do institutional buyers and government agencies
do their buying?
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Organizational Buying
The decision-making process by which
formal organizations establish the need
for purchased products and services and

identify, evaluate, and choose among
alternative brands and suppliers.
-- F. Webster Jr and Y. Wind

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Business Markets
Transportation &
Distribution

Construction

Agriculture

Forestry
Manufacturing

Communications
Banking & Finance
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Business Markets
Similarities to the Consumer Market
• Understanding deep customer needs

• Identify areas for growth
• Improving value management techniques

• Calculating better marketing metrics
• Competing and growing in global markets

• Countering product commoditization
• Gain support for the marketing concept
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Business Markets
Differences to the Consumer Market

Geographically
Concentrated

Fewer, Larger
Buyers

Professional
Buyers
Multiple
Sales Calls
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Personal

Relationships
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Business Markets
Differences to the Consumer Market
Derived Demand
Inelastic Demand

Demand
• Derived
• Inelastic
• Fluctuating

Fluctuating Demand
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Buying Situations

New Task

Straight Rebuy

Modified Rebuy
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Systems Buying and Selling

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Business Buying Participants

Initiator/
Users

Buyers

Influencer

Gatekeeper

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Decider

Approver
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Buying Center Influences
Participants differ by:

•
•
•
•
•

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Interest
Authority
Status
Persuasiveness
Decision criteria

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Targeting Firms and Buying Centers

Who to target?
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Purchasing/Procurement Process

Diverse supplier base

Benefits vs. Costs

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Stages in the Buying Process
Problem
Recognition

Description and
Characteristics

Supplier
Search
Proposal
Solicitations

Performance
Review

Order
Specification

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Supplier
Selection

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Stages in the Buying Process
Problem
Recognition

Internal stimuli
• New product being developed
• Broken machine
• Low stock level
External stimuli
• Trade show visit

• Advertisement

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Stages in the Buying Process
Description and
Characteristics

Technical specifications
• Reliability
• Durability
• Price

Product value analysis
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Stages in the Buying Process
Supplier
Search

Trade directories
Trade advertisements

Trade shows

E-Procurement
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Lead generation
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Stages in the Buying Process
Proposal
Solicitations

Formal presentation

Written
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Stages in the Buying Process
Supplier
Selection

Supplier-evaluation model
Number of suppliers

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Stages in the Buying Process
Order
Specification

Stockless
purchase
plan

Technical specifications

Quantity
Delivery time

Return policy
Warranties
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Stages in the Buying Process
Performance
Review

End user evaluations

Weighted-score
method

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7

9

4
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Buygrid Framework
Table 7.1

Buyphases

Buyclasses
New Task

Modified
Rebuy

Straight
Rebuy

1. Problem Recognition

Yes

Maybe

No

2. General need description

Yes

Maybe

No

3. Product specification

Yes

Yes

Yes

4. Supplier search

Yes

Maybe

No

5. Proposal solicitation

Yes

Maybe

No

6. Supplier Selection

Yes

Maybe

No

7. Order-routine specification

Yes

Maybe

No

8. Performance review

Yes

Yes

Yes

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Managing B2B Relationships
Online social media

One-to-one Marketing
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Managing B2B Relationships
Vertical Coordination

Relationship Factors
Availability of alternatives

Importance of supply
Complexity of supply
Supply market dynamism

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