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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-tobusiness 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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7-5

Characteristics of
Business Markets

Fewer buyers
Close suppliercustomer
relationships
Professional
purchasing
Many buying
influences

Multiple sales calls

Derived demand
Inelastic demand
Fluctuating demand
Geographically
concentrated buyers
Direct purchasing

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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
Users
Influencers
Deciders

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Approvers
Buyers
Gatekeepers

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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
assessment
Field value-in-use
assessment
Focus-group value
assessment
Direct survey
questions

Conjoint analysis
Benchmarks
Compositional
approach
Importance ratings

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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

selling
Bare bones
Contractual
transaction
Customer supply

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Cooperative
systems
Collaborative
Mutually adaptive
Customer is king

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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