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Kotler Mm16e Inppt 04

The document summarizes key aspects of business marketing and organizational buying processes. It discusses the buying center which includes different roles that influence purchasing decisions. It also outlines the stages in the business buying process from problem recognition to performance review. Business marketers build relationships through systems selling, additional services, communication programs, and managing trust.

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Zahirrudin Mahmud
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457 views32 pages

Kotler Mm16e Inppt 04

The document summarizes key aspects of business marketing and organizational buying processes. It discusses the buying center which includes different roles that influence purchasing decisions. It also outlines the stages in the business buying process from problem recognition to performance review. Business marketers build relationships through systems selling, additional services, communication programs, and managing trust.

Uploaded by

Zahirrudin Mahmud
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Marketing Management

Sixteenth Edition, Global Edition

Chapter 4
Analyzing Business
Markets

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Learning Objectives
4.1 Explain the key aspects of the organizational buying
process.
4.2 Define the role of the buying center in an organization.
4.3 Describe the stages of the decision process in business
markets.
4.4 Explain how organizations develop marketing programs
to attract and retain business customers.
4.5 Describe how business-to-business marketers build and
maintain relationships with customers.

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What Is Organizational Buying?
• Business market
– Consists of all the organizations that acquire goods
and services used in the production of other products
or services that are sold, rented, or supplied to others

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Understanding Business Markets
• Fewer, larger buyers
• Close supplier–customer relationships
• Professional purchasing
• Multiple buying influences
• Multiple sales calls
• Derived demand
• Inelastic demand
• Fluctuating demand
• Geographically concentrated buyers
• Direct purchasing

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Types of Buying Situations
• Straight Rebuy
• Modified Rebuy
• New Task

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The Buying Center
• Initiators
• Users
• Influencers
• Deciders
• Approvers
• Buyers
• Gatekeepers

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What Is the Role of the Buying Center?

• Seek the best value from fewer and better suppliers

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Buying Center Dynamics
• Participants with differing interests, authority, status, and
susceptibility to persuasion, and sometimes with very
different decision criteria

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Selling to Buying Centers
• Who are the major decision participants?
• What decisions do they influence, and how deeply?
• What evaluation criteria do they use?

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Figure 4.1 Stages in the Business-Buying
Process

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Understanding the Buying Process (1 of 6)

• Problem recognition
– Someone in the company recognizes a problem or
need that can be met by acquiring a good or service
• Need description
– Next, the buyer determines the needed item’s general
characteristics and the required quantity

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Understanding the Buying Process (2 of 6)

• Product specification
– The buying organization now develops the item’s
technical specifications
▪ Product value analysis—an approach to cost
reduction that studies whether components can be
redesigned, standardized, or made by cheaper
methods of production without adversely affecting
product performance

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Understanding the Buying Process (3 of 6)

• Supplier search
– Catalog sites
– Vertical markets
– “Pure Play” auction
– Private exchanges
– Spot and barter markets

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Online Buying
• Vertical hubs
• Functional hubs

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Understanding the Buying Process (4 of 6)

• Proposal solicitation
– The buyer next invites qualified suppliers to submit
written proposals
• Supplier selection
– Before selecting a supplier, the buying center will
specify and rank desired supplier attributes

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Supplier Selection
• Evaluate vendors
– Price
– Reputation
– Reliability
– Agility

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Understanding the Buying Process (5 of 6)

• Contract negotiation
– the buyer negotiates the final order, which includes
listing the technical specifications, the quantity
needed, the expected time of delivery, return policies,
and warranties

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Contract Negotiation
• Blanket contracts v s periodic purchase orders
ersu

– Stockless purchase plans


• Long-term contracts to ensure supply
• Vendor-managed inventory

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Understanding the Buying Process (6 of 6)

• Performance review
– The buyer periodically reviews the performance of the
chosen supplier(s)

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Developing Effective Business Marketing
Programs

• Systems selling
• Additional services
• Customer reference programs
• Online and offline communications and branding

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From Products to Solutions
• Systems buying
– A total problem solution from one seller
• Systems selling as a marketing tool

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Enhancing Services
• Add high quality services to product offerings to provide
value and establish ties with customers
• Bundle services to improve customer satisfaction and
increase profits

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Building B2B Brands
• Value of a corporate brand

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Overcoming Price Pressures
• Haggling over price

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Managing Communication
• Inform customers
– Online presence
– Search engine optimization
– Social media
– Webinars and podcasts

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Managing B2B Relationships
• Relationship between supplier and customer
– Loyalty
– One-to-one marketing

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Understanding the Buyer–Supplier
Relationship

• Relevant forces
– Availability of alternatives
– Importance of supply
– Complexity of supply
– Supply market dynamism

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Trust, Credibility, and Reputation (1 of 2)
• Building trust
– Provide full, honest information
– Align employee incentives with customer needs
– Partner to create market value
– Offer valid product comparisons

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Trust, Credibility, and Reputation (2 of 2)
• Corporate credibility
• Corporate trustworthiness
• Corporate likeability

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Risks and Opportunism
• Risks
– Specific investments—expenditures tailored to a
particular company and value-chain partner
– Opportunism

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Managing Institutional Markets
• Institutional market
– Schools, hospitals, nursing homes, prisons, etc. that
must provide goods and services to people in their
care
• Government organizations
– Are a major buyer of goods and services in most
countries

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Discussion Questions
• Recall advertisements for computers that refer to the
micro processing chip included with the message “it’s
Intel inside.”
– Why does the computer company feature the Intel
brand in addition to their own?
– How does the Intel’s brand create value for its
customers?

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