Transcript Kotler_ch06 - Pearson Canada

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 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?
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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
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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
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Organizational Buying
Compared to Consumer Markets,
Business Markets Have
Fewer buyers
Larger buyers
Geographically
concentrated buyers
Closer relationships with
suppliers/customers
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Organizational Buying
Fluctuating
demand
Multiple sales
calls
Other
Business
Market
Characteristics
Inelastic
demand
Leasing
Professional
purchasing
Derived
demand
Reciprocity
Direct
purchasing
Multiple buying influences
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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
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Organizational Buying
Buying Situations
• Straight rebuy
• Modified rebuy
• New task
• Routine reorders from
approved vendor list
• Low involvement,
minimal time
commitment
• Example: copier
paper
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Organizational Buying
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
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Organizational Buying
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
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Systems Buying and Selling
Turnkey solution
desired;
bids solicited
Prime
contractors
System
subcomponents
assembled
Second-tier
contractors
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The Buying Centre
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
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Types of Business Customers
Priceoriented
Solutionoriented
Goldstandard
Strategicvalue
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Handling Price-oriented Customers
Limit quantity purchased
Allow no refunds
Make no adjustments
Provide no services
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Solution Selling
• Solutions to enhance customer revenues
• Solutions to decrease customer risks
• Solutions to reduce customer costs
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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
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Table 6.3 Buygrid Framework
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Order Routine Specification
Stockless
purchase plans
Vendor-managed
inventory
Continuous
replenishment
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Establishing Corporate Credibility
Expertise
Trustworthiness
Likeability
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Factors Affecting BuyerSupplier Relationships
Availability of
alternatives
Importance of
supply
Complexity of
supply
Supply market
dynamism
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Opportunism
Some form of cheating or
undersupply relative to
an implicit or explicit contract
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For Discussion
How can we apply what we know
about consumer behaviour
to the behaviour of organizations
in business-to-business
situations?
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