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Understanding Business Markets and Environment

Learning Objectives

Who are the business customers?


How are industrial products classified?
What are the marketing implications for different types of customers and
products?
What are the business customers purchasing orientations and practices?
What are the different types of environment?
Managing external environment

Types of Business Customers

Commercial enterprises (Private Sector firms)

Government customers

Institutional customers

Cooperative societies

>> Users, OEMs, Industrial Distributors & Dealers,

>> DGS&D governed

>> Hospitals, Edu institutions, prisons, etc.

overlapping categories

Classification of Industrial Products

Materials and parts

Capital items

Supplies and services

>> Raw materials, Manufactured Materials (Transformed from raw materials), Component or OEM
parts(Part of a completed product)

>> Installations/Heavy Equipment, Accessories/Light


Equipment, Plant & Buildings

Marketing Implications for Different


Products and Customers

Materials and parts often sold to business customers directly.


Capital items often sold to business customers directly.
Supplies and services often sold to business customers directly.

Purchasing Orientations of Business Customers

Buying orientation

>> lowest price, gain power, risk avoidance

Procurement orientation

>> collaborative relationship with major suppliers, working closely with other depts.

Supply chain management orientation

>> Deliver value to end users, outsource non-core activities, support collaborative relationship
with major suppliers

Purchasing Practice of Business


Customers
> In commercial Enterprises

Involvement of various departments


Major tasks performed
Identify, negotiate, Select suppliers.
Ensure purchase objectives and efficiency achieved.
Good relationship with suppliers.
Establish procedure and documentation.

> Purchasing in Government Organizations

Establish purchase procedure.


Purchasing through Competitive Bidding / Tenders
Closed / sealed tenders
Open / limited tenders
Other Government contracts
DGS & D contracts

> Purchasing in Institutions and


Cooperative Societies

Government institutes follow government process.


Often private sector institutes follow commercial enterprises buying process.

Better to study each major customers purchase process.

Types of environment

Managing External Environment

First, continuously collect and monitor relevant information on external


environment.
Identify changes in opportunities and threats
Manage proactively, using strategies:
Independent
Cooperative
Strategic planning

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