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Analyzing Business Markets Chapter 6 Phillip Kotler & Kevin Lane Keller Prepared for: Universitas Ciputra.

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Presentation on theme: "Analyzing Business Markets Chapter 6 Phillip Kotler & Kevin Lane Keller Prepared for: Universitas Ciputra."— Presentation transcript:

1 Analyzing Business Markets Chapter 6 Phillip Kotler & Kevin Lane Keller
Prepared for: Universitas Ciputra

2 What is Organizational Buyers?
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 The business market consists of all the organizations that acquire goods and services that are sold, rented, or supplied to others

3 Characteristics of Business Markets
Fewer, larger buyers Close supplier-customer relationship Professional purchasing Multiple buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated business Direct purchasing

4 Buying Situation Straight re-buy
a business buying situation in which the buyer routinely re-orders something without modification Modified re-buy a business buying situation in which the buyer wants to modify the product specifications, price, term or suppliers New task a business buying situation in which the buyer purchase a product or service for the first time

5 Participants in the Business Buying Process
The Buying Center  Buying Center Influences  Buying Center Targeting 

6 Buying Center all the individual and units that participate in the business buying decision process
Initiator: those who request something to be purchased Users: member of the organization who will use the product of service Influencers: people who affect the buying decision Deciders: people who have formal or informal power to select or approve the final suppliers Approvals: people who authorized the proposed actions of deciders or buyers Buyers: the person who make the actual process Gatekeeper: people who control the flow of information to others

7 Buying Center Influencers
Interest Authority Status Persuasiveness Age Income Education Job position Personality Attitude toward risk Culture Personal motivation Personal perception Personal preferences Buying style

8 Buying Center Targeting
Four types of Business costumers: Price-oriented customers Solution-oriented customers Gold-standard customers Strategic-value customers Solution Selling: Solution to enhance customer revenue Solution to decrease customer risk Solution to reduce customer cost

9 The Purchasing Process
Purchasing Orientations (Buying Orientation; Procurement Orientation; Supply Chain Management) Types of Purchasing Process (Routine Products; Leverage Products; Strategic Products; Bottleneck Products) Purchasing Organization and Administration (strategic, technical and teamwork oriented)

10 Stages in the Buying Process
someone in the company recognize the problem or need that can be met by acquiring a good or service Problem recognition General need description Product specification Supplier search E-procurement Proposal solicitation Supplier selection Order-routine specification Performance Review the buyer invites the qualified suppliers to submit proposal the buyer review proposals and selects supplier the buyer writes the final order with the chosen supplier(s), listing the technical specification, quantity needed, expected time of delivery, return policies and warranties the company describes the general characteristics and quantity of a need item direct extranet link to major supplier; buying alliances; company buying sites the buyer rates its specification with suppliers, deciding whether to continue, modify or drop them the buying organization decides on and specifies the best vendor trade directories, contact other companies, trade advertisement, attend trade show

11 Institutional & Government Market
Institutional Market: Schools, hospital, nursing homes, prisons and other institutions that provide goods and service to people Government Market: Government unit-federal, state and local that purchase or rent goods and services for carrying out the main of function government

12 The Characteristic Institutional: Government: Low budget
Captive patron Government: Require supplier to submit bid, and normally they award the contract to the lowest bidder Tend to favor domestic suppliers over foreign suppliers Provide would-be suppliers with detail guides describing how to sell to the government Non economic consideration: favor depressed business firm and areas, small business firms and minority Many companies that sell to the government have not been marketing oriented for some reasons.

13 Managing B2B Customer Relationship
Buyer-supplier relationship differed according to 4 factors: Availability of suppliers Importance of supply Complexity of supply Supply market dynamism

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