Business Market

Topics: Marketing, Decision making, Market Pages: 8 (1216 words) Published: November 19, 2014


A Written Report
Presented to Prof. Maria Theresa Ranquilman
Pamantasan ng Lungsod ng Maynila
Intramuros, Manila

In Partial Fulfillment of the Requirements for the Degree
Master in Business Administration

Analyn P. Deogracias
October 2014

Connecting with Customers: Business Markets

Organizational Buying
It is a 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.

Business Market versus Consumer Market

Business Markets comprises all organizations that buy goods and services for use in the production of other products and services or for the purpose of reselling or renting them to others at a profit.

The major industries making up the business market are agriculture, forestry, and fisheries; mining, manufacturing; construction; transportation; communication; public utilities; banking, finance, and insurance; distribution; and services.

Consumer Markets is dominated by products and services designed for the general consumer. Industries in the consumer markets often have to deal with shifting brand loyalties and uncertainty about the future popularity of products and services.

Differences of Business Market from Consumer Marker

Market structure and demand
Business market contain Fewer but larger buyers
Business buyer demand is derived from final consumer demand
Inelastic demand is not affected as much in the short run by price changes Demand in business markets fluctuates more and more quickly
Geographically concentrated buyers

Nature of the buying unit
Buying business involves a more professional purchasing effort Involves multiple buying influences

Types of decisions and the decision-making process
Business buyers usually face more complex buying decisions
Business buying process is more formalized
In business buying, buyers and sellers work more closely together and build close long-term relationships

Buying Situation

Straight rebuy is a routine purchase decision such as a reorder without any modification

Modified rebuy is a purchase decision that requires some research where the buyer wants to modify the product specification, price, terms, or suppliers

Straight or Modifies rebuy may skip some of the stages of the buying process.

New task is a purchase decision that requires thorough research such as a new product or service for the first time. It usually go through all stages of the buying process.

System Buying – business buyers prefer to buy a total problem from one seller. A good example of this is the point of view of those prime contractors who buy projects in the government such as building and re-constructing bridges and public highways. This prime contractor who bought different projects from the government has also different sub-contractors or second-tier contractors who do the actual work for the project.

System Selling – a key industrial marketing strategy in bidding to build large-scale industrial project such as dams, steel factories, irrigation systems, sanitation systems, pipelines, utilities, and even new towns.

In related with my example in system buying, we will look in with the point of view of the government which is the customer. Different firms will sell their services and submit their proposals to the customer to bid for the project. In the end, the customer will choose the offer that is more advantageous to their part.

Buying Center – all those individuals and groups who participate in the purchasing decision-making process, who share common goals and the risks arising from the decisions.

Business Buying Process Participants

Initiators are the one who initiates the business buying
Users are those that will use the product or service
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