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Marketing Management

Hussain Al Awami, B.Sc. Pharm., M.Sc., MBA

Analyzing Business Markets

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Analyzing Business Markets

Business Buying Process

Organizational Buying
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.

Characteristics of Business Markets


Fewer, larger buyers Close suppliercustomer relationships Professional purchasing Many buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing

Fewer larger buyers


Buyer
Few major supplier (complete solution)

Competition pose pressure On purchasing

Small supplier might be more efficient

Close supplier customer relationship


Strong relation
Few major customers (High purchasing power)

Customized products or services

Might be two way selling

Professional purchasing
Trained staff RFP Organization policies Proposal

Purchase contracts

Greater technical data are required Competitative advantage

Several buying influences


Bu ye r

More people involved (committees)

Se lle r

Well trained sales staff

Multiple sales calls


Bu ye r

More people AND Process

Se lle r

Multiple calls (might takes years)

Derived demand
Wholesaler Retailer Consumer

Inelastic demand
Short term
Difficult to change Price is shouldered to consumers

Long term

Depends on situation

Fluctuation demand
More volatile

Acceleration effect

Geographically concentrated buyers

Headquarters

Direct purchasing

Bypass intermediaries

Buying Situation
Straight rebuy Modified rebuy New task

System buying & selling


All from one seller Common in certain industries Need to compete on many attributes

The Buying Center


Initiators Users Influencers Deciders Approvers Buyers Gatekeepers

Of Concern to Business Marketers


Who are the major decision participants? What decisions do they influence? What is their level of influence? What evaluation criteria do they use?

Types of Business Customers


Price-oriented Solution-oriented Gold-standard Strategic-value

Purchasing Orientations
Buying Procurement Supply chain management

Product-Related Purchasing Processes


Value
Low High High Low

Risk

Routine products Leverage products Strategic products Bottleneck products

Low Low High High

Stages in buying process

Step I: Problem Recognition


Internal recognition External recognition

Qualifications

Marketers

Step II & III: General Need Description & product specification


Simple Products Complicated products

Purchasing alone

Involve others

Step IV: Supplier Search


Current suppliers Trade adz Trade directories Exhibitions Contacts W companies Internet

E Procurement

Step V: Proposal Solicitation


Simple Quotation
Confidence Capability Reputation Cooperation

Detailed Proposal

Quality of report or proposal

Oral presentation

Step VI: Supplier Selection


Company thinking Product Nature

Step VII: Order Routine Specification


Technicalities Delivery schedule Quantity ordered Return Policy
In full On time

Delivery time Warranties

OTIFNE

No errors

Step VIII: Performance Review Evaluation

Continue

Modify

Stop

CRM in B2B
Strong or Integrated relationship

Ideal

Practice

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