PUNE INSTITUTE OF BUSINESS MANAGEMENT
MARKETING RESEARCH
DR. Prantosh Banerjee
GROUP NO: 09
2023-2208-0001-
0004 Rajshekhar Singh
2023-0809-0001-
0010 Rishiraj Swami
2023-0909-0001-
0001 Laveena Rupani
2023-1208-0001-
0008 Phijam Bebeto Singh
2023-1208-0001- Yumkhaibam Swami
0010 Singh
2023-2208-0001-
0011 Sneha Mohis
Chapter 7. Analyzing business markets
Organizational Buying
Business Market characteristics vs. Consumer Market
Business market: Fewer buyers, larger buyers, geographically concentrated
buyers, close supplier-customer relationship, inelastic demand, derived
demand, fluctuating demand, several buying influences, professional
purchasing, multiple sales calls (takes long to finalize a sale), direct
purchasing (as opposed to through intermediaries), leasing, reciprocity.
Three buying situations:
Straight rebuy: when a consumer buys routinely.
Modified rebuy: when the consumer wants to modify product
specifications and prices.
New Task: when the purchaser buys a product/service for the first time.
Participants in the Business Buying Process
The buying center – consists of all those people and groups who participate
in the purchasing decision-making process, who share some common goals
and the risks arising from the decisions. There are seven roles group
members can play in a buying decision:
Initiators, users, influencers, deciders, approvers, buyers, and gatekeepers.
The Purchasing/Procurement Process
Companies have different purchasing orientations than individuals:
Buying Orientation: Focus on lowest price at a given quality level. The
buyer’s Tactics can be of commonization: where the product is viewed as
a commodity thus only price matters, or of Multi sourcing: where the
suppliers are allowed to compete for their purchases.
Procurement Orientation: Focus on cost reductions, quality improvements,
improved relations with supplier. (e.g. through longer term contracts,
MRP)
Supply Chain Management: Focus on improving the entire value chain.
The Purchasing process varies according to different products:
Routine products: products with low prices and low value. Suppliers can
offer blanket offers and facilities management.
Leverage products: products with high cost, high value and with many
sources of supply. Supplier can show own product as total cost minimizer.
Strategic products: products with high cost, high value and they involve
risk. Supplier can work on strategic alliances co-development programs,
co-investment.
Bottleneck products: low cost, low value, involves risk. Suppliers can
decrease uncertainty by offering a help desk, offer tracking system, and
delivery-demand.
Stages in the Buying Process:
Stage1: problem recognition, 2: the general need description and product
specification, 3: search for supplier, 4: proposal solicitation, 5: selection of
the supplier, 6: order routine specification, and finally the 7: performance
review.
Product value analysis, PVA, can help determine the required quantity and
the general characteristics of the needed item (Step 2), since it is an
approach to cost reduction in which components are studied to determine
if they can be standardized or redesigned or made by cheaper methods of
production.
Vertical Hubs and Functional Hubs – these are e-hubs that help search for
customers. (Step 3)
E-procurement methods: 1. Direct extranet links to major suppliers, 2:
Buying alliances, 3: Company buying sites.
Customer value assessment, CVA – these are methods to assess customer
value.
Blanket contract (a stockless purchase plan)– binds a long-term buyer-
supplier relationship to resupply buyer as needed, at agreed upon prices,
over a specified period.
Buy flow map – helps the marketer specifies which buying company
personnel is involved at which stage of the purchasing process.
The Procurement Process from the Suppliers Point of View
(Job of Marketers):
1. Stimulate problem recognition; direct mail, telemarketing, calling on
prospects.
2. Use PVA as a tool to make themselves more attractive.
3. Get listed in major online catalogs or services, strong ad. And promotion
program, build a reputation.
4. Describe value and benefits in customer terms in marketing documents,
work on oral presentations.
5. Maintain satisfaction high.
6. Monitor the same variables that are monitored by the product’s buyers
and end users.
Institutional and Government Markets
Major buyers of goods and services:
A. Institutional market – consists of hospitals, nursing homes, schools,
prisons, and other institutions that are obligated to provide goods and
services to people in their care.
Companies produce, package, and price their products depending on
meeting these institutions’ particular requirements, because they can
generate large income.
B. Government organizations – are also major buyers.
For suppliers:
Much paperwork is involved, favor domestic suppliers.
Must prepare bids carefully, since open bids are preferred by
governments
The feature of certainty motivates suppliers to try and sell to government
organizations (no check bounces, loyalty (repeated business)).
Market orientation is generally not used for selling to governments.
Advertising and personnel are not very effective, because the government
focuses on lower costs.
