GROUP G Group Members Arshad Ali Memon Noman

GROUP - G Group Members: Arshad Ali Memon Noman Akhtar Santosh Kumar Rahol Sharma 2 k 11/PA/14 2 k 11/PA/50 2 k 11/PA/64 2 k 11/PA/53

Chapter # 07 Analyzing Business Market Content: 1. Analyzing Business Market 2. Business Market versus the Customer Market 3. System Buying and Selling 4. Participants in the Business Buying process 5. Targeting Firms and Buying Center 6. Big Sales to Small Business 7. The purchasing / Procurement Process 8. Stages in the Buying Process 9. Supplier Search 10. Proposal Solicitation 11. Managing Business-to-Business customer relationship 12. The benefits of vertical coordination 13. Establishing corporate trust, Credibility and reputation 14. Business Relationships Risks and Opportunism 15. New Technology and Business Customers

Analyzing Business Market Business organizations do not only self; they also buy vast quantities of raw materials, manufactured components, plan and equipment, supplies and business services. According to the Census Bureau there are roughly 6 million business with paid employees in the united states alone, to create and capture value, seller need to understand these organizations, need, resources and buying procedures.

Business Market versus the Customer Market The 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 other. . The major industries making up the business market are agriculture, forestry fisheries, mining , manufacturing, construction, public utilities, communication, Insurance and services.

System Buying and Selling Many business buyers prefer to buy a total problem solution from one seller called systematic buying, this practice originated with government purchases of major weapons and communication system. System selling is a key industrial marketing strategy in bidding to build large-scale industrial projects such as dams, steel factories, irrigation system etc. Customer present potential supplies with a list of projects specification.

Participants in the Business Buying process Purchasing agents are influential in straight re-buy and modified re-buy situations, whereas other department personnel are more influential in new buy situations. The buying center 1. Initiators: users or others in organizations who request something to purchase 2. user: Those who use products or services. 3. Decider: people who decide on product requirements or on suppliers.

Targeting Firms and Buying Center Successful business to business marketing requires that business marketers know which type of companies to focus on in their selling efforts as well as who to concentrate on within the buying centers in those organizations. TARGETING FIRMS Finding those business sectors with the greatest growth prospects, most profitable customer and most promising opportunities for the firm is crucial.

Big Sales to Small Business American Express has been steady adding new features to its credit card for small business , which some small companies use to cover hundred of thousands of dollars a month in cash needs. It has also created a small business network called open forum to bring to-gather various services , web tools and discount programs with other giants. Small and mid size business present huge opportunities and huge challenges.

The purchasing / Procurement Process In principle business buyers seek to obtain the highest benefit package (economic , technical, services and social) in relation to market offering’s costs. To make comparisons, they will try to translate all costs and benefits into monetary terms. A business buyer’s incentive to purchase will be a function of the difference between perceived benefits and perceived costs. Business marketers must therefore ensure that customer fully appreciate how the firm’s offering are different and better.

Stages in the Buying Process Buygrid Framework: Major Stages (Buyphases) of the Industrial Buying Process in Relation to Major Buying Situations (Buyclasses) Buyclasses New Task Modified Rebuy Straight Rebuy Buyphasses 1. Problem recognition Yes Maybe No 2. General need description Yes Maybe No 3. Product specification Yes Yes 4. Supplier search Yes Maybe No 5. Proposal sollicitation Yes Maybe No 6. Supplier selection Yes Maybe No 7. order- routine specification Yes Maybe No 8. Performance review Yes Yes

Supplier Search The buyer next tries to identify the most appropriate suppliers through trade directories , contacts with other companies, trade advertisement , trade shows and the internet. Companies purchase over internet are utilizing electronic marketplace in several form, Catalog sites: Companies can order thousands of items through electronic catalog distributed by software. Vertical market: Companies buying industrial products such as; Plastics, steel, chemicals or services such as logistics or media can go to specialized web sites.

Proposal Solicitation The buyer next invites qualified suppliers to submit proposals. If the item is complex or expensive the proposal will be written and detailed. After evaluating the proposals, the buyer will invite a few suppliers to make formal presentations. Business marketers must be skilled in researching , writing and presenting proposals. Written proposals should be marketing documents that describe value and benefits in customers terms. Oral presentations must inspire confidence and position the company's capabilities and resources so they stand out from the competition. Proposals and selling are often team efforts. pittsburgh based Cutler-Hammer develop “Pods” of sales people focused on a particular geographical region, industry or market concentration.

Managing Business-to-Business customer relationship To improve effectiveness and efficiency, business suppliers and customer are exploring different ways to manage their relationships, closer relationships are driven in part by supply chain management , early supplier involvement and purchasing alliances . Cultivating the right relationships with business with paramount for any holistic marketing program. Business to business marketers are avoiding “spray and pray ” approaches to attracting

and retaining customers in favor of honing in on their targets and developing one to one marketing approaches. They are increasingly using online social media in the form of company blogs, online press release and forums or discussion groups to communicate with exisisting as well as prospective customers…

The benefits of vertical coordination Much research has advocated greater vertical coordination between buying partners and sellers, so they can transcend merely transacting and instead engage in activities that create more value for both parties. Building trust is one prerequisite to healthy long-term relationship. “Market insight establishing corporate trust , credibility and reputation” A number of forces influence the development of a relationship between business partner.

Establishing Corporate trust, Credibility and reputation Corporate credibility is the extent to which customers believe a firm can design and deliver products and services that satisfy their needs and wants. It reflects the supplier’s in the market place and is the foundation for a strong relationship. Corporate credibility depends upon three factors Corporate expertise: Company is seen as able to make and sell product and conduct services. Corporate Trustworthiness: The extent to which a company is seen as motivated to be honest, dependable, and sensitive to customer needs. Corporate Likability: The extent to which a company is seen as likable, attractive, prestigious, dynamic and so on.

Business Relationships Risks and Opportunism Researchers have noted that establishing a customer – supplier relationship creates tension between safeguarding (ensuring predictable solutions) and adaptation (allowing for flexibility for unanticipated events). Vertical coordination can facilitate stronger customer – seller ties but at the same time may increase the risk to the customer’s and supplier’s specific investments. Specific investments are those expenditures tailored to a particular company and value chain partner.

New Technology and Business Customers Top firms are comfortable using technology to improve the way they do business with their business-to-business customers. Here are some examples of how they are redesigning Web sites, improving search results, leveraging e-mail, engaging in social media, and launching Webinars and podcasts to improve their business performance. Chapman Kelly Provides audit and other cost containment products to help firm reduce their health care and insurance costs. The company originally tried to acquire new customer through traditional cold calling and outbound selling techniques. After it redesigned its web site and optimized the site’s search engine so the company’s name moved close to the top of relevant online searches, revenue nearly doubled.