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Chapter 8 Analyzing Business Markets and Business Buying Behavior by

Chapter 8 Analyzing Business Markets and Business Buying Behavior by. PowerPoint by Milton M. Pressley University of New Orleans. Kotler on Marketing. Many businesses are wisely turning their suppliers and distributors into valued partners. Chapter Objectives.

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Chapter 8 Analyzing Business Markets and Business Buying Behavior by

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  1. Chapter 8Analyzing Business Markets and Business Buying Behaviorby PowerPoint by Milton M. Pressley University of New Orleans

  2. Kotler on Marketing Many businesses are wisely turning their suppliers and distributors into valued partners.

  3. Chapter Objectives • In this chapter, we focus on six 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 buying process? • What are the major influences on organizational buyers? • How do business buyers make their decisions? • How do institutions and government agencies do their buying?

  4. What is Organizational Buying? • Organizational buying • The business market versus the consumer market • Business market • Fewer buyers • Larger buyers • Close supplier-customer relationship • Geographically concentrated buyers

  5. What is Organizational Buying? • Derived demand • Inelastic demand • Fluctuating demand • Professional purchasing

  6. Blue Shield of California’s mylifepath

  7. What is Organizational Buying? • Several buying influences • Multiple sales calls • Directed purchasing • Reciprocity • Leasing

  8. What is Organizational Buying? • Buying Situations • Straight rebuy • Modified rebuy • New Task • Systems Buying and Selling • Systems buying • Turnkey solution • Systems selling

  9. Participants in the Business Buying Process • The Buying Center • Initiators • Users • Influencers • Deciders • Approvers • Buyers • Gatekeepers • Key buying influencers • Multilevel in-depth selling

  10. Figure 8-1: Major Influences on Industrial Buying Behavior

  11. Major Influences on Buying Decisions • Environmental Factors • Organizational Factors • Purchasing-Department Upgrading • Cross-Functional Roles • Centralized Purchasing • Decentralized Purchasing of Small-Ticket Items • Internet Purchasing

  12. The e-hub Plastics.com home page offers buyers and sellers of plastics a marketplace plus news and information

  13. Covisint’s Web site offers both services and information

  14. Major Influences on Buying Decisions • Other Organizational Factors • Long-Term Contracts • Vendor-managed inventory • Continuous replenishment programs • Purchasing-Performance Evaluation and Buyers’ Professional Development • Improved Supply Chain Management • Lean Production • Just-in-time

  15. Major Influences on Buying Decisions • Interpersonal and Individual Factors • Cultural Factors • France • Germany • Japan • Korea • Latin America

  16. The Purchasing/ Procurement Process • Incentive to purchase • Three Company Purchasing Orientations • Buying Orientation • Commoditization • Multisourcing • Procurement Orientation • Materials requirement planning (MRP) • Supply Chain Management Orientation

  17. The Purchasing/ Procurement Process • Types of Purchasing Processes • Routine products • Leverage products • Strategic products • Bottleneck products

  18. The Purchasing/ Procurement Process • Stages in the Buying Process • Problem Recognition • General Need Description and Product Specification • Product value analysis • Supplier Search • Vertical hubs • Functional hubs • Direct external links to major suppliers • Buying alliances • Company buying sites • Request for proposals (RFPs)

  19. Table 8.1: Buygrid Framework: Major Stages (Buyphases) of the Industrial Buying Process in Relation to Major Buying Situations (Buyclasses)

  20. The Purchasing/ Procurement Process • General Need Description and Product Specification • Product value analysis • Supplier Search • Vertical hubs • Functional hubs • Direct extranet links to major suppliers • Buying alliances • Company buying sites • Request for proposals (RFPs)

  21. The Purchasing/ Procurement Process • Proposal Solicitation • Supplier Selection

  22. Table 8-2: An Example of Vendor Analysis

  23. The Purchasing/ Procurement Process • Customer value assessment • Routine-order products • Procedural-problem products • Political-problem products • Order-Routine Specification • Blanket contract • Stockless purchase plans • Performance Review • Buyflow map

  24. Figure 8-2: Major Influences on Industrial Buying Behavior

  25. Institutional and Government Markets • Institutional market

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