1. A FRAMEWORK for MARKETING MANAGEMENT
Chapter 6
Analyzing
Business
Markets
Kotler Keller Cunningham 1

2. © Copyright 2008 Pearson Education Canada
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, and how are buying decisions made?
How can marketers build strong relationships with business customers?
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3. Profile: Canadian Marketing Excellence VANCITY
Vancouver’s Vancity is Canada’s largest credit union (institution that is owned by its members)
Vancity was recently ranked as one of Macleans “Top 100 Employers”
Launched Canada’s first low-interest loan for hybrid vehicles and won an innovation award for its gay and lesbian marketing campaign
Business-to-business marketing has also been successful:
Through the use of touch-point marketing, Vancity has been able to tailor products specifically to the business segment
It launched a direct mail campaign aimed at 2,800 business owners for a new Vancity Expense Gold Visa, rewarding members for their business purchases
By 2004, Vancity had managed to triple its business accounts
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4. 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
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5. Organizational Buying
Compared to Consumer Markets, Business Markets Have
Fewer buyers
Larger buyers
Geographically concentrated buyers
Closer relationships with suppliers/customers
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6. Organizational Buying
Fluctuating demand
Multiple sales calls
Other Business Market Characteristics
Inelastic demand
Derived demand
Leasing
Reciprocity
Professional purchasing
Direct purchasing
Multiple buying influences
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7. Organizational Markets GOVERNMENT OF CANADA
The Canadian government buys around
$13 billion worth of goods and services annually from various suppliers
Over 85 departments, agencies, Crown Corporations, and special operating agencies
Public Works and Government Services Canada (PWGSC) is the government’s largest purchasing organization;
Averaging 33,000 contracts and totalling $10 billion annually
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8. Organizational Buying
Routine reorders from approved vendor list
Low involvement, minimal time commitment
Example: copier paper
Buying Situations
Straight rebuy
Modified rebuy
New task
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9. Organizational Buying
Buying Situations
Straight rebuy
Modified rebuy
New task
Specifications, prices, delivery terms, or other aspects require modification
Moderate level of involvement and time commitment
Example: desktop computers
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10. Organizational Buying
Buying Situations
Straight rebuy
Modified rebuy
New task
Purchasing a product or service for the first time
High level of involvement and time commitment; multiple influences
Example: selecting a website design firm or consultant
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11. Systems Buying and Selling
Turnkey solution
desired;
bids solicited
System
subcomponents
assembled
Prime
contractors
Second-tier
contractors
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12. © Copyright 2008 Pearson Education Canada
The Buying Centre
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
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13. Types of Business Customers
Price-
oriented
Solution-
oriented
Gold-
standard
Strategic-
value
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14. Handling Price-oriented Customers
Limit quantity purchased
Allow no refunds
Make no adjustments
Provide no services
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15. © Copyright 2008 Pearson Education Canada
Solution Selling
Solutions to enhance customer revenues
Solutions to decrease customer risks
Solutions to reduce customer costs
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16. Buyphases: Stages in the Business Buying Process
Problem recognition
General need description
Product specification
Supplier search
Proposal solicitation
Supplier selection
Order-routine specification
Performance review
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17. Table 6.3 Buygrid Framework
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18. Order Routine Specification
Stockless
purchase plans
Vendor-managed
inventory
Continuous
replenishment
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19. Establishing Corporate Credibility
Expertise
Likeability
Trustworthiness
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20. Factors Affecting Buyer- Supplier Relationships
Availability of
alternatives
Importance of
supply
Complexity of
supply
Supply market
dynamism
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21. Opportunism Some form of cheating or undersupply relative to
an implicit or explicit contract
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22. For Discussion How can we apply what we know about consumer behaviour
to the behaviour of organizations
in business-to-business
situations?
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