Download - Ch08 - Business Market and Behaviour
-
8/13/2019 Ch08 - Business Market and Behaviour
1/27
Copyright 2003 Prentice-Hall, Inc.
8-1
Chapter 8
Analyzing Business Marketsand Business Buying
Behaviorby
PowerPoint by
Milton M. Pressley
University of New Orleans
-
8/13/2019 Ch08 - Business Market and Behaviour
2/27
Copyright 2003 Prentice-Hall, Inc.
8-2
Kotler on
Marketing
Many businesses
are wisely
turning their
suppliers and
distr ibutors into
valued partners.
-
8/13/2019 Ch08 - Business Market and Behaviour
3/27
Copyright 2003 Prentice-Hall, Inc.
8-3
Chapter Objectives
In this chapter, we focus on six 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 buying process?
What are the major influences on organizationalbuyers?
How do business buyers make their decisions?
How do institutions and government agencies dotheir buying?
-
8/13/2019 Ch08 - Business Market and Behaviour
4/27
Copyright 2003 Prentice-Hall, Inc.
8-4
What is Organizational
Buying? Organizational buying
The business market versus the consumer
market
Business market
Fewer buyers
Larger buyers
Close supplier-customer relationship
Geographically concentrated buyers
-
8/13/2019 Ch08 - Business Market and Behaviour
5/27
Copyright 2003 Prentice-Hall, Inc.
8-5
What is Organizational
Buying?
Derived demand
Inelastic demand Fluctuating demand
Professional purchasing
-
8/13/2019 Ch08 - Business Market and Behaviour
6/27
Copyright 2003 Prentice-Hall, Inc.
8-6
Blue Shield of Californias mylifepath
http://www.mypath.com/ -
8/13/2019 Ch08 - Business Market and Behaviour
7/27
Copyright 2003 Prentice-Hall, Inc.
8-7
What is Organizational
Buying?
Several buying influences
Multiple sales calls
Directed purchasing
Reciprocity
Leasing
-
8/13/2019 Ch08 - Business Market and Behaviour
8/27
Copyright 2003 Prentice-Hall, Inc.
8-8
If you were tasked with marketing a
product or service to an organization,
would you attempt to initially contact the
purchasing department, or potential
usersof your companys offerings? Why?
Would the product youwere selling make a
difference? Why?
-
8/13/2019 Ch08 - Business Market and Behaviour
9/27
Copyright 2003 Prentice-Hall, Inc.
8-9
What is Organizational
Buying? Buying Situations
Straight rebuy
Modified rebuy New Task
Systems Buying and Selling
Systems buying Turnkey solution
Systems selling
-
8/13/2019 Ch08 - Business Market and Behaviour
10/27Copyright 2003 Prentice-Hall, Inc.
8-10
What are some of the benefits to an
organization that can be derived
from a single source solution, or asystems buyingarrangement with a
prime contractor? What are some of
the potential pitfalls? What
can the company do to
protect itself from
these hazards?
-
8/13/2019 Ch08 - Business Market and Behaviour
11/27Copyright 2003 Prentice-Hall, Inc.
8-11
Participants in the Business
Buying Process The Buying Center
Initiators
Users
Influencers
Deciders
Approvers
Buyers Gatekeepers
Key buying influencers
Multilevel in-depth selling
-
8/13/2019 Ch08 - Business Market and Behaviour
12/27Copyright 2003 Prentice-Hall, Inc.
8-12
Figure 8-1: Major Influences on
Industrial Buying Behavior
-
8/13/2019 Ch08 - Business Market and Behaviour
13/27Copyright 2003 Prentice-Hall, Inc.
8-13
Major Influences on Buying
Decisions Environmental Factors
Organizational Factors
Purchasing-Department Upgrading Cross-Functional Roles
Centralized Purchasing
Decentralized Purchasing of Small-TicketItems
Internet Purchasing
-
8/13/2019 Ch08 - Business Market and Behaviour
14/27Copyright 2003 Prentice-Hall, Inc.
8-14
The e-hub Plastics.com home page offers buyers and
sellers of plastics a marketplace plus news and
information
http://www.plastics.com/ -
8/13/2019 Ch08 - Business Market and Behaviour
15/27Copyright 2003 Prentice-Hall, Inc.
8-15
Covisints Web site offers both services and
information
http://www.covisint.com/ -
8/13/2019 Ch08 - Business Market and Behaviour
16/27Copyright 2003 Prentice-Hall, Inc.
8-16
Major Influences on Buying
Decisions Other Organizational Factors
Long-Term Contracts
Vendor-managed inventory Continuous replenishment programs
Purchasing-Performance Evaluation and Buyers
Professional Development
Improved Supply Chain Management Lean Production
Just-in-time
-
8/13/2019 Ch08 - Business Market and Behaviour
17/27Copyright 2003 Prentice-Hall, Inc.
8-17
Major Influences on Buying
Decisions Interpersonal and Individual Factors
Cultural Factors
France
Germany
Japan
Korea
Latin America
-
8/13/2019 Ch08 - Business Market and Behaviour
18/27Copyright 2003 Prentice-Hall, Inc.
8-18
The Purchasing/
Procurement Process Incentive to purchase
Three Company Purchasing Orientations
Buying Orientation Commoditization
Multisourcing
Procurement Orientation
Materials requirement planning (MRP) Supply Chain Management Orientation
-
8/13/2019 Ch08 - Business Market and Behaviour
19/27Copyright 2003 Prentice-Hall, Inc.
8-19
The Purchasing/
Procurement Process Types of Purchasing Processes
Routine products Leverage products
Strategic products
Bottleneck products
-
8/13/2019 Ch08 - Business Market and Behaviour
20/27Copyright 2003 Prentice-Hall, Inc.
8-20
The Purchasing/
Procurement Process Stages in the Buying Process Problem Recognition
General Need Description and
Product Specification Product value analysis
Supplier Search
Vertical hubs
Functional hubs Direct external links to major suppliers
Buying alliances
Company buying sites
Request for proposals (RFPs)
-
8/13/2019 Ch08 - Business Market and Behaviour
21/27Copyright 2003 Prentice-Hall, Inc.
8-21
Table 8.1: Buygrid Framework: Major Stages (Buyphases) of the
Industrial Buying Process in Relation to Major Buying Situations
(Buyclasses)Buyclasses
New Modified Straight
Task Rebuy Rebuy
1. Problem recognition Yes Maybe No
2. General need description Yes Maybe No
3. Product specification Yes Yes Yes
Buyphases 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
-
8/13/2019 Ch08 - Business Market and Behaviour
22/27Copyright 2003 Prentice-Hall, Inc.
8-22
The Purchasing/
Procurement Process General Need Description and
Product Specification
Product value analysis
Supplier Search
Vertical hubs
Functional hubs
Direct extranet links tomajor suppliers
Buying alliances
Company buying sites
Request for proposals (RFPs)
-
8/13/2019 Ch08 - Business Market and Behaviour
23/27Copyright 2003 Prentice-Hall, Inc.
8-23
The Purchasing/
Procurement Process Proposal Solicitation
Supplier Selection
-
8/13/2019 Ch08 - Business Market and Behaviour
24/27Copyright 2003 Prentice-Hall, Inc.
8-24
Table 8-2: An Example of Vendor Analysis
Attributes Rating Scale
Importance
Weights
Poor
(1)
Fair
(2)
Good
(3)
Excellent
(4)
Price .30 x
Supplier reputation .20 x
Product reliability .30 x
Service reliability .10 x
Supplier Flexibility .10 x
Total score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5
-
8/13/2019 Ch08 - Business Market and Behaviour
25/27Copyright 2003 Prentice-Hall, Inc.
8-25
The Purchasing/
Procurement Process Customer value assessment
Routine-order products
Procedural-problem products Political-problem products
Order-Routine Specification
Blanket contract
Stockless purchase plans
Performance Review
Buyflow map
-
8/13/2019 Ch08 - Business Market and Behaviour
26/27Copyright 2003 Prentice-Hall, Inc.
8-26
Figure 8-2: Major Influences on
Industrial Buying Behavior
-
8/13/2019 Ch08 - Business Market and Behaviour
27/27
8-27
Institutional and
Government Markets Institutional market