Business Markets and Business Buyer Behaviour Chapter 6
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. Definition STRENGTHS Positive internal factors within the control of the organisation, usually in the present - that set the company up for success. These factors are also known as assets. WEAKNESSES Negative internal factors within the control of the organisation, usually in the present - that detract from the potential for success or value OPPORTUNITIES External factors that the organisation has little or no control over that are encouraging for the company and show a clear benefit and motivation for the future success of the organisation. THREATS External factors that the organisation has little control over that put the business at risk and require significant consideration to be aware of and overcome www. abeuk. com
SWOT - Strengths • What advantages does your business have? • • What do you do better than anyone else? • What do people in your market see as your strengths? What unique or lowest-cost resources can you draw upon that others can't? Place image here
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? Place image here
SWOT - Opportunities • • • What good opportunities can you spot? • Changes in technology, markets or government policy related to your field. • Changes in social patterns, population profiles, lifestyle changes, and so on. What interesting trends are you aware of? Useful opportunities can come from such things as: Place image here
SWOT - Threats • • • What obstacles do you face? • Is changing technology threatening your position? • Could any of your weaknesses seriously threaten your business? What are your competitors doing? Are quality standards or specifications for your job, products or services changing? Place image here
Characteristics of Business Markets • 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
Marketing Mix - key differences • 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
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
Types of Buying Decisions • Straight Rebuy • Modified Rebuy • New Task
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.
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
Straight rebuy • goods re-ordered without modification • More chalk • More power ROUTINE
Steps in the Organisational Buying Decision Process • • • Problem Recognition Information Search Alternate evaluation Purchase Decision Product Usage Ongoing Evaluation
Problem Recognition • New Task? SR MR • Remember a problem is not necessarily bad…
Information Search More Structured than consumer but still uses similar sources… Trade / Industry sources – directories, Magazines, exhibitions……. Supplier salesmen
Alternative Evaluation • Specification Brief = exact requirements • Tender Process
Purchase Decision • Supplier Credentials Quality Systems Reputation • Terms and Conditions • Quality / Reliability / Support No one got fired for buying an IBM (computer)
Product Usage • On going performance • Actual Product • Delivery – Contractual obligations met…
Factors influencing industrial buying behaviour ENVIRONMENTAL • Levels of demand • Economic prospects • Interest rates • The pace of technological change • Political and legal structures • Competitive structures
Factors influencing industrial buying behaviour ORGANISATIONAL • Objectives • Policies • Structures • Systems & degree of centralisation • Processes and procedures • Managerial attitudes to risk • Financial resource • Previous experiences
Factors influencing industrial buying behaviour BUYING CENTRE • Roles in DMU • Group processes • Interpersonal interactions
Factors influencing industrial buying behaviour INDIVIDUAL • Personal objectives • Job position • Attitude to risk • Previous experiences • Technical knowledge • Motivation
Organisational Culture - The 7 S Framework • Staff • Strategy • Systems • Structure • Superordinate Goals / Shared Values • Style • Skills • • • Mc. Kinsey Management Consultancy
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
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” ? ?
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
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
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.
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
China Southern • Buying new aircraft. • What is the buying decision process?
HAUT • New IT System • What would be important in the buying decision?
Mars Confectionery • New packaging for new product? • What would be important in the buying decision
Zara • New supplier for garments • What would be important in the selection process?
Samsung • New revolutionary folding screen • New app. . • What would be important in the selection process?
Starbucks • New truly recyclable drinks container.
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