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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Slide 6 of 27

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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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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Buyer-Seller Relationship Categories

Cooperative systems

Collaborative

Customer is king

Contractual transaction
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Mutually adaptive
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Institutional and Governments Markets

Prisons

Government
agencies

Schools

Hospitals
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