A FRAMEWORK for MARKETING MANAGEMENT Chapter 6 Analyzing

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

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

Chapter Questions • What is the business market, and how does it differ from

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-tobusiness buying process, and how are buying decisions made? • How can marketers build strong relationships with business customers? © Copyright 2008 Pearson Education Canada 6 -2

Profile: Canadian Marketing Excellence VANCITY • Vancouver’s Vancity is Canada’s largest credit union (institution

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 © Copyright 2008 Pearson Education Canada 6 -3

Organizational Buying Decision-making process by which formal organizations establish the need for purchased products

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 © Copyright 2008 Pearson Education Canada 6 -4

Organizational Buying Compared to Consumer Markets, Business Markets Have Fewer buyers Larger buyers Geographically

Organizational Buying Compared to Consumer Markets, Business Markets Have Fewer buyers Larger buyers Geographically concentrated buyers Closer relationships with suppliers/customers © Copyright 2008 Pearson Education Canada 6 -5

Organizational Buying Fluctuating demand Multiple sales calls Other Business Market Characteristics Inelastic demand Leasing

Organizational Buying Fluctuating demand Multiple sales calls Other Business Market Characteristics Inelastic demand Leasing Professional purchasing Derived demand Reciprocity Direct purchasing Multiple buying influences © Copyright 2008 Pearson Education Canada 6 -6

Organizational Markets GOVERNMENT OF CANADA • The Canadian government buys around $13 billion worth

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 © Copyright 2008 Pearson Education Canada 6 -7

Organizational Buying Situations • Straight rebuy • Modified rebuy • New task • Routine

Organizational Buying Situations • Straight rebuy • Modified rebuy • New task • Routine reorders from approved vendor list • Low involvement, minimal time commitment • Example: copier paper © Copyright 2008 Pearson Education Canada 6 -8

Organizational Buying Situations • Straight rebuy • Modified rebuy • New task • Specifications,

Organizational 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 © Copyright 2008 Pearson Education Canada 6 -9

Organizational Buying Situations • Straight rebuy • Modified rebuy • New task • Purchasing

Organizational 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 © Copyright 2008 Pearson Education Canada 6 -10

Systems Buying and Selling Turnkey solution desired; bids solicited Prime contractors System subcomponents assembled

Systems Buying and Selling Turnkey solution desired; bids solicited Prime contractors System subcomponents assembled Second-tier contractors © Copyright 2008 Pearson Education Canada 6 -11

The Buying Centre Initiators Users Influencers Deciders Approvers Buyers Gatekeepers © Copyright 2008 Pearson

The Buying Centre Initiators Users Influencers Deciders Approvers Buyers Gatekeepers © Copyright 2008 Pearson Education Canada 6 -12

Types of Business Customers Priceoriented Solutionoriented Goldstandard Strategicvalue © Copyright 2008 Pearson Education Canada

Types of Business Customers Priceoriented Solutionoriented Goldstandard Strategicvalue © Copyright 2008 Pearson Education Canada 6 -13

Handling Price-oriented Customers Limit quantity purchased Allow no refunds Make no adjustments Provide no

Handling Price-oriented Customers Limit quantity purchased Allow no refunds Make no adjustments Provide no services © Copyright 2008 Pearson Education Canada 6 -14

Solution Selling • Solutions to enhance customer revenues • Solutions to decrease customer risks

Solution Selling • Solutions to enhance customer revenues • Solutions to decrease customer risks • Solutions to reduce customer costs © Copyright 2008 Pearson Education Canada 6 -15

Buyphases: Stages in the Business Buying Process Problem recognition General need description Product specification

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 © Copyright 2008 Pearson Education Canada 6 -16

Table 6. 3 Buygrid Framework © Copyright 2008 Pearson Education Canada 6 -17

Table 6. 3 Buygrid Framework © Copyright 2008 Pearson Education Canada 6 -17

Order Routine Specification Stockless purchase plans Vendor-managed inventory Continuous replenishment © Copyright 2008 Pearson

Order Routine Specification Stockless purchase plans Vendor-managed inventory Continuous replenishment © Copyright 2008 Pearson Education Canada 6 -18

Establishing Corporate Credibility Expertise Trustworthiness Likeability © Copyright 2008 Pearson Education Canada 6 -19

Establishing Corporate Credibility Expertise Trustworthiness Likeability © Copyright 2008 Pearson Education Canada 6 -19

Factors Affecting Buyer. Supplier Relationships Availability of alternatives Importance of supply Complexity of supply

Factors Affecting Buyer. Supplier Relationships Availability of alternatives Importance of supply Complexity of supply Supply market dynamism © Copyright 2008 Pearson Education Canada 6 -20

Opportunism Some form of cheating or undersupply relative to an implicit or explicit contract

Opportunism Some form of cheating or undersupply relative to an implicit or explicit contract © Copyright 2008 Pearson Education Canada 6 -21

For Discussion How can we apply what we know about consumer behaviour to the

For Discussion How can we apply what we know about consumer behaviour to the behaviour of organizations in business-to-business situations? © Copyright 2008 Pearson Education Canada 6 -22

Analyzing Project Profitability Concept Analyzing Project Profitability AnalyzingAnalyzing Project Profitability Concept Analyzing Project Profitability Analyzing
Analyzing Vendor Rebates Concept Analyzing Vendor Rebates AnalyzingAnalyzing Vendor Rebates Concept Analyzing Vendor Rebates Analyzing
A FRAMEWORK for MARKETING MANAGEMENT Chapter 5 AnalyzingA FRAMEWORK for MARKETING MANAGEMENT Chapter 5 Analyzing
The Marketing Process The marketing process Analyzing marketingThe Marketing Process The marketing process Analyzing marketing
MARKETING PLANNING Marketing Management Marketing Planning Marketing StrategyMARKETING PLANNING Marketing Management Marketing Planning Marketing Strategy
CHAPTER 13 MARKETING WHAT IS MARKETING Marketing MarketingCHAPTER 13 MARKETING WHAT IS MARKETING Marketing Marketing
LECTURE5 Analyzing the Marketing Environment Topic Outline AnalyzingLECTURE5 Analyzing the Marketing Environment Topic Outline Analyzing
Regionlny marketing Marketing reginu Marketing zemia Marketing lokalityRegionlny marketing Marketing reginu Marketing zemia Marketing lokality
Niche Marketing Niche Marketing Niche marketing is marketingNiche Marketing Niche Marketing Niche marketing is marketing
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Conceitos Marketing Marketing eletrnico Planejamento de marketing MarketingConceitos Marketing Marketing eletrnico Planejamento de marketing Marketing
Marketing What is Marketing Segmentation and Marketing MarketingMarketing What is Marketing Segmentation and Marketing Marketing
MARKETING Marketing MARKETING Learning Intentions To introduce marketingMARKETING Marketing MARKETING Learning Intentions To introduce marketing
MARKETING The Marketing Concept Marketing and the MarketingMARKETING The Marketing Concept Marketing and the Marketing
Marketing Introduccin Marketing Definicin de marketing Marketing esMarketing Introduccin Marketing Definicin de marketing Marketing es
Marketing Chapter 4 Analyzing the Marketing Environment DhruvMarketing Chapter 4 Analyzing the Marketing Environment Dhruv
Chapter 2 Analyzing the Marketing Environment Marketing EnvironmentChapter 2 Analyzing the Marketing Environment Marketing Environment
Chapter 5 Analyzing Consumer Markets Marketing Management ChapterChapter 5 Analyzing Consumer Markets Marketing Management Chapter
Chapter 2 Project Management Framework Project Management FrameworkChapter 2 Project Management Framework Project Management Framework
Marketing An Introduction 3 Analyzing the Marketing EnvironmentMarketing An Introduction 3 Analyzing the Marketing Environment
3 Principles of Marketing Analyzing the Marketing Environment3 Principles of Marketing Analyzing the Marketing Environment