1

7
Analyzing
Business Markets
 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?

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 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?

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 What is Organizational Buying?

Organizational buying refers to 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.

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 Top Marketing Challenges
 Understanding customer needs in new ways;
 Identifying new opportunities for growth;
 Improving value management techniques
 Calculating better marketing performance and
accountability metrics;
 Competing and growing in global markets
 Countering the threat of product and service
commoditization
 Convincing C-level executives to embrace the
marketing concept

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

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 Buying Situation

Straight Rebuy

Modified Rebuy

New Task

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 Systems Buying And Selling

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 The Buying Center
 Initiators  Approvers
 Users  Buyers
 Influencers  Gatekeepers
 Deciders

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 Of Concern to Marketers
 Who are the major decision participants?
 What decisions do they influence?
 What is their level of influence?
 What evaluation criteria do they use?

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 Stages in the Buying Process:
Buyphases
 Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order-routine specification
 Performance review

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 Table 7.1 Buygrid Framework

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 Forms of Electronic Marketplaces

 Catalog sites
 Vertical markets
 Pure play auction sites
 Spot markets
 Private exchanges
 Barter markets
 Buying alliances

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 Table 7.2 An Example of
Vendor Analysis

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 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

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 Order Routine Specification
 Stockless purchase plans
 Vendor-managed inventory
 Continuous replenishment

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 Categories of Buyer-Seller
Relationships

 Basic buying and  Cooperative

selling systems
 Bare bones  Collaborative
 Contractual  Mutually adaptive
transaction  Customer is king
 Customer supply

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 Institutional Markets

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 For Review
 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?

Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 7-19

 For Review
 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?

Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 7-20