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Business Markets and Business Buyer Behaviour

Business Markets and Business Buyer Behaviour. Chapter 6. Using the SWOT analysis framework. SWOT is the technique for organising the collection and presentation of data that allows marketers to make qualified decisions about their actions. SWOT - Strengths.

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Business Markets and Business Buyer Behaviour

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  1. Business Markets and Business Buyer Behaviour Chapter 6

  2. Using the SWOT analysis framework • SWOT is the technique for organising the collection and presentation of data that allows marketers to make qualified decisions about their actions.

  3. SWOT - Strengths • What advantages does your business have? • What do you do better than anyone else? • What unique or lowest-cost resources can you draw upon that others can't? • What do people in your market see as your strengths?

  4. SWOT - Weaknesses • What could you improve? • What should you avoid? • What are people in your market likely to see as weaknesses? • What factors lose you sales?

  5. SWOT - Opportunities • What good opportunities can you spot? • What interesting trends are you aware of? • Useful opportunities can come from such things as: • Changes in technology, markets or government policy related to your field. • Changes in social patterns, population profiles, lifestyle changes, and so on.

  6. SWOT - Threats • What obstacles do you face? • What are your competitors doing? • Are quality standards or specifications for your job, products or services changing? • Is changing technology threatening your position? • Could any of your weaknesses seriously threaten your business?

  7. Characteristics of BusinessMarkets • Fewer but larger buyers • Demand often derived from consumer demand - e.g. car industry buys steel because consumers buy cars • Demand less elastic – price • Demand may fluctuate quickly • Buying unit differs - more rational approach, more people involved - CBA • Buying process usually more formalised • Quantity – bulk

  8. Marketing Mix - keydifferences • Greater degree of negotiation TERMS.. • Bid pricing may be involved • Greater emphasis on personal selling • Increasing use of e-commerce,- e-procurement • Partnership – extranets automatic reordering • Distributors and agents may be involved

  9. Decision Making Unit (DMU) • User -end user, may initiate request and help specify • Influencer –technical personnel or specialists, help specify, provide information • Buyer -formal authority holders, help specify, select vendors, negotiate • Decider -final approver (often also buyer) • Gatekeeper –control information flow to others, can prevent sales people gaining access

  10. Types of Buying Decisions • Straight Rebuy • Modified Rebuy • New Task

  11. Modified re-buy • Similar but with - goods ordered with modification • Better processor • Bigger Screen • New classroom furniture • opportunity for competitors to enter discussions, essential service quality is good.

  12. New buy • Buying for the first time- • HAUT buying a bike hire contract • New smart boards for classrooms. • greater risk or cost, the fuller decision making unit involved

  13. Straight rebuy • goods re-ordered without modification • More chalk • More power ROUTINE

  14. Steps in the Organisational Buying Decision Process • Problem Recognition • Information Search • Alternate evaluation • Purchase Decision • Product Usage • Ongoing Evaluation

  15. Problem Recognition • New Task? SR MR • Remember a problem is not necessarily bad…

  16. Information Search More Structured than consumer but still uses similar sources… Trade / Industry sources – directories, Magazines, exhibitions……. Supplier salesmen

  17. Alternative Evaluation • Specification Brief = exact requirements • Tender Process

  18. Purchase Decision • Supplier Credentials Quality Systems Reputation • Terms and Conditions • Quality / Reliability / Support No one got fired for buying an IBM (computer)

  19. Product Usage • On going performance • Actual Product • Delivery • Contractual obligations met…

  20. Factors influencingindustrial buying behaviour ENVIRONMENTAL • Levels of demand • Economic prospects • Interest rates • The pace of technological change • Political and legal structures • Competitive structures

  21. Factors influencingindustrial buying behaviour ORGANISATIONAL • Objectives • Policies • Structures • Systems & degree of centralisation • Processes and procedures • Managerial attitudes to risk • Financial resource • Previous experiences

  22. Factors influencingindustrial buying behaviour BUYING CENTRE • Roles in DMU • Group processes • Interpersonal interactions

  23. Factors influencingindustrial buying behaviour INDIVIDUAL • Personal objectives • Job position • Attitude to risk • Previous experiences • Technical knowledge • Motivation

  24. Organisational Culture - The 7S Framework • Staff • Strategy • Systems • Structure • Superordinate Goals / Shared Values • Style • Skills McKinsey Management Consultancy

  25. Strategy is the key • What is a strategy? • Strategy is a coherent set of actions aimed at gaining a sustainable advantage over the competition.. • Integrated plan for development of marketing orientation SYSTEMS/STRUCTURE • Formalised definitions of markets and mission -SHARED VISION/STYLE • Detailed specification of marketing objectives • Commitment to implementation SKILLS/STAFFING

  26. Shared values • The ideas of what is right and desirable - the mores of the organisation / individuals • Typified by catch phrases / sound bites • “We will become a fully customer driven organisation • Customers come first • Marketing expenditures are an investment • Service is paramount” • ??

  27. Style • The way that management behaves... • Top management support - visible commitment to customer related activities • Open communications between all functional groups and marketing staff • Recognition/reward of customer /market oriented behaviour

  28. Structure • Clearly defined responsibilities and reporting lines • Key accounts - recognising important customers • Decentralised marketing staff to provide close and fast support to customers • Staff rotation of non-marketing staff through customer contact positions

  29. Systems • Procedures and processes • Information - flow • Customer intelligence • Competitor intelligence • Marketing planning and control systems • Providing information to customer facing staff • Process easy for both customers and staff.

  30. Skills/Staffing • People in the organisational rather than personal context • Recruitment of people with requisite skills / ability to acquire • Provision of adequate number of customer service staff • Marketing training -programmes and market • Analytical skills in segmentation

  31. China Southern • Buying new aircraft. • What is the buying decision process?

  32. HAUT • New IT System • What would be important in the buying decision?

  33. Mars Confectionery • New packaging for new product? • What would be important in the buying decision

  34. Zara • New supplier for garments • What would be important in the selection process?

  35. Samsung • New revolutionary folding screen • New app.. • What would be important in the selection process?

  36. Starbucks • New truly recyclable drinks container.

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