GROUP - G
Group Members:
Arshad Ali Memon
Noman Akhtar
Santosh Kumar
Rahol Sharma
2k11/PA/14
2k11/PA/50
2k11/PA/64
2k11/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
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
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 co-
ordination 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.