Ayesha Bakhtawar

Roll no. 01
BBA-6th Regular
Marketing Management

Submitted To:
Sir Hammad Zafar
 TABLE OF CONTENTS

i. ORGANIZATIONAL BUYING

ii. BUSINESS MARKETS

iii. THREE BIG CHALLENGES FACED BY

B TO B MARKETING

iv. CHARACTERISTICS OF A BUSINESS

MARKET

v. BUYING SITUATIONS

vi. PARTICIPANTS IN THE BUSINESS BUYING

PROCESS

vii. BUYING CENTER INFLUENCES

viii. TARGETING FIRMS AND BUYING CENTERS

 ANALYZING BUSINESS MARKETS
ORGANIZATIONAL BUYING
Organizational buying is the 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. 

FOR EXAMPLE: organization buys telephones, computers and office supplies

for firm’s own use.

BUSINESS MARKETS
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 or we can say that business market consists of organizations
that that buy or sell goods for business purpose.

FOR EXAMPLE: : rather than manufacturing the parts themselves, computer

manufacturers often buy computer parts and put them together to create a finished
product. Intel supplies processors, graphics chips, and motherboard chipsets for
computer system manufacturers such as Apple, Lenovo, HP, and Dell. 

THREE BIG CHALLENGES FACED BY B TO B MARKETING

1. ALIGNING MARKETING & SALES

Aligning the marketing and sales activities is indeed a great challenge for
the b to b markets. Marketing reaches out to the potential customers and
provides them with knowledge and incentives about their company and
their products through promotions and campaigns. The Sales team
develops a one on one relationship with the customer, and they work hard
to ensure that the customer evolves from having an interest in their
company, to signing a contract and paying for a service. Sales and
Marketing are often seen as two separate departments within a company.
But although their daily operations are focused on different aspects of the
customer relationship, they should function together as single unit. Their
relationship is irrevocably interconnected, and recognizing where each
team specializes and how they can come together to generate growth.

How marketing & sales can be aligned?

The most effective technology used by companies with high sales and

marketing alignment is customer relationship management software.
CRM software provides you with a 360-degree view of a customer, and
having that single view enables teams to act quickly and decisively to
deliver more value to prospects. Putting the right systems and
technologies in place will help you draw the bridge between the
marketing data being gathered about a prospect and their
transformation into leads and sales opportunities. FOR EXAMPLE Popular
CRM software include zoho, Insightly, Sugar CRM etc.

2. BUILDING STRONGER INNOVATIVE MARKETING

INTERFACE

Marketing interface is the media by which an organization communicates

with its consumers. Innovation in marketing interface means bringing
about new ways to attract the customer. Bringing a change in the already
established marketing interface in a business community is difficult and a
hectic amount of brain storming is required to bring innovation. Coming
up with innovative marketing innovation is vital and is also better for the
business to increase its profit and market share. Digital marketing
(websites, online advertisements, and posts on social media) is one of the
tools through which an organization may grow at its peak.

3. EXTRACTING MORE CUSTOMER AND MARKET

KNOWLEDGE

Extracting more and more customer and gaining wide market knowledge
allows a business to know the ongoing trend of the market proves to be
helpful for a business to come up with competitive strategies and policies
in order to survive in the highly competitive market. Increasing more
customers directly benefits the business hence increasing its sales as well
as profits. To extract more customer and market knowledge an
 organization needs to conduct extensive and expensive market research.
This process is time consuming and also very costly. The business will
need to weigh the pros and cons for conducting such research. A
preliminary research can be a good idea to check the effectiveness.

CHARACTERISTICS OF A BUSINESS MARKET

FEWER, LARGER BUYERS

In business market, the buyers are few but the amount of purchase is large. There
are simply less companies acting as purchasers on the B2B market than consumers
on the B2C market. However, the amount they purchase is much larger.
EXAMPLE : Industries such as aircraft engines and defense weapons.

CLOSE CUSTOMER SUPPLIER RELATIONSHIPS

Due to smaller customer base and the power of larger customers, suppliers are
expected to customize their offerings to individual business customers needs.

PROFESSIONAL PURCHASING

Business goods are often purchased by trained purchasing agents, who must follow
their organization’s purchasing polices, constraints and requirements .Many
business buying instruments such as quotations, proposals and purchase contracts
are not typically found in consumer buying.

MULTIPLE BUYING INFLUENCES

More people influence business buying decisions. Buying committees that include
technical experts and even senior management are common in purchase of major
goods.

MULTIPLE SALES CALLS

In business markets it takes multiple sale calls to close an average industrial sale.
For capital equipment sales for large project it may take many attempts to fund a
project and even delivering product can take years.
DERIVED DEMAND

Another aspect of the B2B market characteristics is that business demand is

derived demand. In fact, demand on the B2B market is derived from the demand
for consumer goods. FOR EXAMPLE If consumer demand for computers goes
down, so will demand for microprocessors  Therefore, the demand for
microprocessors comes from the demand for final consumer goods.

INELASTIC DEMAND

 This means that demand is not affected that much by short-term price changes.
The total demand for many business products is, in fact, not dramatically affected
by price changes.

FOR EXAMPLE If the price for leather goes down, a shoe manufacturer will not
buy much more leather than he usually does, because his demand is based on
consumer demand. If the price for leather goes up, will he buy less? Probably not,
since he still needs the leather to produce shoes to satisfy consumer demand.

FLUCTUATING DEMAND

The demand for business goods and services tends to be more volatile than the
demand for consumer goods and services. A given percentage increase in
consumer demand can lead to a much larger percentage increase in the demand for
plant and equipment necessary to produce the additional output. Economists refer
to this as the acceleration effect consumer demand increases by only 10 per cent,
the retailer may think that it would be wise to order 20% more to have enough
stock for the rising demand in the future. The wholesaler supplying the retailer is
likely to order much more than the 20% increase, let it be 40%. And so it continues
up to the beginning of the whole chain. Therefore, a 10% rise in consumer demand
can cause as much as a 200% rise in business demand. As a result, demand on the
B2B demand fluctuates much more than demand on the B2C market.

 GEOGRAPHICALLY CONCENTRATED

Business market is concentrated geographically, that means business

market is established in a certain area. 
DIRECT PURCHASING
Business buyers often buy directly from manufacturers rather than through
intermediaries, especially items that are technically complex or expensive.

BUYING SITUATIONS
The business buyer faces many decisions in making a purchase. Three types of
buying situations are the straight rebuy, modified rebuy, and new task.

 STRAIGHT REBUY

A business buying situation in which the buyer routinely reorders something

without any modifications. The purchasing department reorders supplies
such as office supplies and bulk chemicals on a routine basis and chooses
from suppliers on an approved list. The suppliers make an effort to maintain
product and service quality and often propose automatic reordering systems
to save time. AN EXAMPLE for straight rebuy would be the purchase of
office supplies or bulk chemicals.

 MODIFIED REBUY

A business buying situation in which the buyer wants to modify product

specifications, prices, terms or suppliers. E.g. buyer has purchased a similar
product in the past, but has decided to change some specifications (price,
quality level, customer service level, options, etc.). The out-suppliers see an
opportunity to propose a better offer to gain some business.

 NEW TASK

A new-task purchaser buys a product or service for the first time (an office
building, a new security system). New-task buying is the marketer’s greatest
opportunity and challenge. The process passes through several stages:
awareness, interest, evaluation, trial, and adoption. Over time, new-buy
situations become straight rebuys and routine purchase behavior. In the
new-task situation, the buyer must determine product specifications, price
 limits, delivery terms and times, service terms, payment terms, order
quantities, acceptable suppliers, and the selected supplier.

PARTICIPANTS IN THE BUSINESS BUYING PROCESS

 INITIATORS

Initiators are the ones who initiate or recognize the need of a particular
product requirement in the organization.

 USERS

People who will use the product or service, in many cases, the users initiate
the buying proposal and help define the product requirements.

 INFLUENCERS

People who influence the buying decision, often by helping define

specifications and providing information for evaluating alternatives.
Technical personnel are particularly important influencers. These are
basically the people who will influence the decision of which product to buy
from where and what suitable price to buy it in.

 DECIDERS

People who decide on product requirements or on suppliers  or have the

authority to decide whether to buy a certain product or not.

 APPROVERS

People who authorize the proposed actions of deciders or buyers are called
Approvers.

 BUYERS

People who have formal authority to select the supplier and arrange the
purchase terms are called buyers. Buyers may help shape product
specifications, but they play their major role in selecting vendors and
negotiating. In more complex purchases, buyers might include high-level
managers.
 GATEKEEPERS

People who have the power to prevent sellers or information from reaching
members of the buying center. FOR EXAMPLE, purchasing agents,
receptionists, and telephone operators may prevent salespersons from
contacting users or deciders.

BUYING CENTER INFLUENCES

Buying centers usually include several participants with differing interests,
authority, status, and persuasiveness, and sometimes very different decision
criteria. Engineers may want to maximize the performance of the product;
production people may want ease of use and reliability of supply; financial
staff focus on the economics of the purchase; purchasing may be concerned
with operating and replacement costs; union officials may emphasize safety
issues. Business buyers also have personal motivations, perceptions, and
preferences influenced by their age, income, education, job position,
personality, attitudes toward risk, and culture. Buyers definitely exhibit
different buying styles.

TARGETING FIRMS AND BUYING CENTERS

Successful business-to-business marketing requires that business marketers
know which types of companies to focus on in their selling efforts, as well
as who to concentrate on within the buying centers in those organizations.

 TARGETING FIRMS

Business marketers may divide the marketplace in many different ways to

decide on the types of firms to which they will sell. Finding those business
sectors with the greatest growth prospects, most profitable customers, and
most promising opportunities for the firm is crucial.
 TARGETING WITHIN THE BUSINESS CENTER

Once it has identified the type of businesses on which to focus marketing

efforts, the firm must then decide how best to sell to them. To target their
efforts properly, business marketers need to figure out: Who are the major
decision participants? What decisions do they influence? What is their level
of influence? What evaluation criteria do they use?

FOR EXAMPLE: A company sells disposable surgical gowns to hospitals.

The hospital staffs who participate in this buying decision include the vice
president of purchasing, the operating-room administrator, and the surgeons.
The vice president of purchasing analyzes whether the hospital should buy
disposable gowns or reusable gowns. If the findings favor disposable gowns,
then the operating-room administrator compares various competitors
‘products and prices and makes a choice. This administrator considers
absorbency, antiseptic quality, design, and cost and normally buys the brand
that meets functional requirements at the lowest cost. Surgeons influence the
decision by reporting their satisfaction with the particular brand.
The business marketer is not likely to know exactly what kind of group
dynamics take place during the decision process, although whatever
information he or she can obtain about personalities and interpersonal
factors is useful.