kotler_mm13e_im_07 - C BUSINESS NG H A P T E R MARKETS...

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7 ING BUSINESS MARKETS C H A P T E R LEARNING OBJECTIVES After reading this chapter, students should: Know what is the business market, and how it differs from the consumer market Know what buying situations do organizational buyers face Know who participates in the business-to-business buying process Know how business buyers make their decisions Know how companies can build strong relationships with business customers Know how institutional buyers and government agencies do their buying CHAPTER SUMMARY Organizational buying is the decision-making process by which formal organizations establish the need for purchased products and services, then identify, evaluate, and choose among alternative brands and suppliers. 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 others. Compared to consumer markets, business markets generally have fewer and larger buyers, a closer customer-supplier relationship, and more geographically concentrated buyers. Demand in the business market is derived from demand in the consumer market and fluctuates with the business cycle. Nonetheless, the total demand for many business goods and services is quite price inelastic. Business marketers need to be aware of the role of professional purchasers and their influencers, the need for multiple sales calls, and the importance of direct purchasing, reciprocity, and leasing. The buying center is the decision-making unit of a buying organization. It consists of initiators, users, influencers, deciders, approvers, buyers, and gatekeepers. To influence these parties, marketers must be aware of environmental, organizational, interpersonal, and individual factors. The buying process consists of eight stages called buyphases: (1) problem recognition, (2) general need description, (3) product specification, (4) supplier search, (5) proposal solicitation, (6) supplier selection, (7) order-routine specification, and (8) performance review. Business marketers must form strong bonds and relationships with their customers and provide them added value. Some customers, however, may prefer more of a transactional relationship. The institutional market consists of schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care. Buyers for governmental organizations tend to require a great deal of paperwork from their vendors and to favor open bidding and domestic companies. Suppliers 216
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Chapter-by-Chapter Instructional Material must be prepared to adapt their offers to the special needs and procedures found in institutional and government markets. DETAILED CHAPTER OUTLINE
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This note was uploaded on 11/29/2010 for the course KELLER MM522 taught by Professor Kissi during the Spring '10 term at Keller Graduate School of Management.

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kotler_mm13e_im_07 - C BUSINESS NG H A P T E R MARKETS...

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