Analyzing Business Markets and Business Buying Behavior by

1. PowerPoint by Fatima Ahmed Hadi AMA University Analyzing Business Markets and Business Buying Behaviorby

2. Kotler on Marketing Many businesses are wisely turning their suppliers and distributors into valued partners.

3. In this chapter, we focus on six 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 buying process? What are the major influences on organizational buyers? How do business buyers make their decisions? How do institutions and government agencies do their buying? Chapter Objectives

4. Organizational buying The business market versus the consumer market Business market Fewer buyers Larger buyers Close supplier-customer relationship Geographically concentrated buyers What is Organizational Buying?

5. Derived demand Inelastic demand Fluctuating demand Professional purchasing What is Organizational Buying?

6. Blue Shield of California’s mylifepath

7. Several buying influences Multiple sales calls Directed purchasing Reciprocity Leasing What is Organizational Buying?

8. Buying Situations Straight rebuy Modified rebuy New Task Systems Buying and Selling Systems buying Turnkey solution Systems selling What is Organizational Buying?

9. The Buying Center Initiators Users Influencers Deciders Approvers Buyers Gatekeepers Key buying influencers Multilevel in-depth selling Participants in the Business Buying Process

10. Major Influences on Industrial Buying Behavior

11. Environmental Factors Organizational Factors Purchasing-Department Upgrading Cross-Functional Roles Centralized Purchasing Decentralized Purchasing of Small-Ticket Items Internet Purchasing Major Influences on Buying Decisions

12. The e-hub Plastics.com home page offers buyers and sellers of plastics a marketplace plus news and information

13. Covisint’s Web site offers both services and information

14. Other Organizational Factors Long-Term Contracts Vendor-managed inventory Continuous replenishment programs Purchasing-Performance Evaluation and Buyers’ Professional Development Improved Supply Chain Management Lean Production Just-in-time Major Influences on Buying Decisions

15. Interpersonal and Individual Factors Cultural Factors France Germany Japan Korea Latin America Major Influences on Buying Decisions

16. Incentive to purchase Three Company Purchasing Orientations Buying Orientation Commoditization Multisourcing Procurement Orientation Materials requirement planning (MRP) Supply Chain Management Orientation The Purchasing/ Procurement Process

17. Types of Purchasing Processes Routine products Leverage products Strategic products Bottleneck products The Purchasing/ Procurement Process

18. Stages in the Buying Process Problem Recognition General Need Description and Product Specification Product value analysis Supplier Search Vertical hubs Functional hubs Direct external links to major suppliers Buying alliances Company buying sites Request for proposals (RFPs) The Purchasing/ Procurement Process

19. Table 8.1: Buygrid Framework: Major Stages (Buyphases) of the Industrial Buying Process in Relation to Major Buying Situations (Buyclasses)

20. General Need Description and Product Specification Product value analysis Supplier Search Vertical hubs Functional hubs Direct extranet links to major suppliers Buying alliances Company buying sites Request for proposals (RFPs) The Purchasing/ Procurement Process

21. Proposal Solicitation Supplier Selection The Purchasing/ Procurement Process

22. Table 8-2: An Example of Vendor Analysis

23. Customer value assessment Routine-order products Procedural-problem products Political-problem products Order-Routine Specification Blanket contract Stockless purchase plans Performance Review Buyflow map The Purchasing/ Procurement Process

24. Major Influences on Industrial Buying Behavior

25. Institutional market Institutional and Government Markets