This document discusses business markets and organizational buying. It covers key differences between business and consumer markets. The business buying process involves multiple roles and stages. Buyers consider various factors like price, quality, and relationships. Suppliers build trust and collaborate with buyers to establish long-term relationships. Various research methods and tools help understand customer needs better to improve the buying and decision process.

1. Analyzing
Business Markets
Prepared By,
Mr. Nishant Agrawal

2. 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-to-
business buying process?

3. Chapter Questions
• How do business buyers make their
decisions?
• How can companies build strong
relationships with business customers?
• How do institutional buyers and
government agencies do their buying?

4. What is Organizational Buying?
Organizational buying refers to the 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.

5. Top Business Marketing Challenges
• Expand understanding of customer needs
• Compete globally as China and India reshape markets
• Master analytical tools and improve quantitative skills
• Innovation as an engine of growth
• Create new organizational models and linkages

6. Characteristics of Business Markets
• Fewer, larger
buyers
• Close supplier-
customer
relationships
• Professional
purchasing
• Many buying
influences
• Multiple sales calls
• Derived demand
• Inelastic demand
(not affected by
price change)
• Fluctuating demand
• Geographically
concentrated buyers
• Direct purchasing

7. Buying Situation
• Straight rebuy
• Purchasing department reorder supplies such as office supplies and
bulk order.
• Goal is to get small order and then enlarge their purchase share over
time
• Modified rebuy
• The buyer in modified rebuy want to change product specification ,
prices, delivery requirement.
• New task
• A new task purchaser buy a product for first time. New task buying is
marketer’s greatest opportunity and challenge.

8. Participants in Business Buying Process
The Buying Center
• Initiators
• Users
• Influencers
• Deciders
• Approvers
• Buyers
• Gatekeepers (Ex.
Purchasing agent ,
receptionists, telephone
operators)
The buying center include all members of organization who play any of the
Following 7 roles in purchasing decision process

9. Stages in the Buying Process: Buyphases
Buygrid framework
• Problem recognition
• General need description
• Product specification
• Supplier search
• Proposal solicitation / Tender
• Supplier selection
• Order-routine specification

10. Supplier Search
Forms of Electronic Marketplaces
• Catalog sites
• Vertical markets / specialized website
• Pure play auction sites
• Spot / exchange markets
• Private exchanges
• Barter markets : trade a goods
• Buying alliances (Ex. Flipkart + SBI)

11. Methods of e-Procurement
• Websites organized using vertical hubs
• Websites organized using functional
hubs
• Direct extranet links to major suppliers
• Buying alliances
• Company buying sites

12. Supplier Selection
Handling Price-Oriented Customers
Some companies handle price oriented buyers by setting a lower
price but establishing restrictive condition:
• Limit quantity purchased
• Allow no refunds
• Make no adjustments
• Provide no services

13. Methods for Researching
Customer Value
• Internal engineering
assessment
• Field value-in-use
assessment
• Focus-group value
assessment
• Direct survey
questions
• Conjoint analysis
• Benchmarks
• Compositional
approach
• Importance ratings

14. Order Routine Specification
• After selecting suppliers buyer negotiate final order, listing
technical specification , quantity needed, expected time of
delivery , return policy etc.
• Stockless purchase plans
• Buyer’s computer automatically sends an order to seller when stock is
needed.
• Vendor-managed inventory
•

15. Establishing Corporate Trust
and Credibility
• Expertise
• Trustworthiness
• Likability

16. Trust Dimensions
• Transparent
• Product/Service
Quality
• Incentive
• Partnering
• Cooperating design
• Product comparison
• Supply chain
• Pervasive advocacy
/ support

17. Factors Affecting
Buyer-Supplier Relationships
• Availability of alternatives
• Importance of supply
• Complexity of supply
• Supply market dynamism

18. Managing B to B Customer relationship
Categories of Buyer-Seller Relationships
• Basic buying and
selling
• Bare bones
• Contractual
transaction
• Customer supply
• Cooperative
systems
• Collaborative
• Mutually adaptive
• Customer is king

19. What is Opportunism?
•Opportunism is some form of cheating or
undersupply relative to an implicit or explicit contract.
•When buyers cannot easily monitor supplier
performance , supplier might cheat and not deliver
expected value.

20. Thank You