4.
Marketing
Business markets,
Measuring demand
Chap. 7 & 8
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Agenda
• Consumer vs. business markets
• Model of business buyer behavior
• Characteristics affecting business buyer
behavior
• The decision process
• Goverment market
• Defining market
• Measuring & forecasting demand
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Consumer vs. business markets
• Consumer market
– final consumers
– buying goods & services for personal use
– final demand
• Business market
– organizations
– buy to use in production, re-sell or rent
– derived demand
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Business market
Other Special issues,
• inelastic demand tendencies
• concentrated market • direct purchasing
• professionals • reciprocity
• sophisticated buying • leasing
process • system buying
• formalized (buying • long-term contracts
center) • performance
• dependency evaluation
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Model of consumer behavior
Marketing Other Buyer’s black box Buyers
stimuli stimuli responses
Product Political Buyer Product, Brand,
Buyer
Price Economic decision Dealer choice
characteristics
Place Social process Purchase timing,
Promotion Technological amount
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Types of buying situation
• Straight rebuy
– current suppliers: maintain quality, automatic
reordering system
– potential s.: offer something new, exploit
dissatisfaction, start with small
• Modified rebuy
– new specifications, price, terms
– for current s. threat, for potential s. a possibility
• New task
– most complex, information need
– the greatest opportunity and challenge
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Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
• Gatekeeper
controls the flow of information
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Characteristics
• Environmental
• Organizational
• Interpersonal
• Individual
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Environmental
• Laws and regulations
• Level of primary demand
• Economic outlook
• Inflation, interest rates
• Technology change
• Market structure, competition
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Interpersonal & individual
• Members of the decision center
– age, education, position, personality
– interaction, teamwork
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The decision process
1. Need recognition
2. General need description
3. Product specification
4. Supplier search
5. Proposal solicitation
6. Supplier selection
7. Order-routine specification
8. Performance evaluation
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Government
• large quantities
• price in center
• fame
• red tape
• special priorities
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Defining „market” I.
• Market:
– set of actual and potential buyers of a product (service)
– place where D meets S
• Industry: the sellers
• Product level: total, industry, company, product
line, product
• Space level: world, country, region, territory,
customer
• Time level: long, medium, short
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Defining „market” II.
• keywords: interest, income, access
• potential – some interest
• available – all 3
• qualified available – 3+ other conditions
• served – chosen
• penetrated – already bought
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Total market demand
• volume bought of a
quantity
product
sold – by a defined consumer
group
Market potential – in a defined region
– in a defined time period
• expandable vs.
Market minimum nonexpendable markets
Q=nxqxp
Marketing expenditure • market-buildup
pp. 221
Planned expenditure• market-factor index
Market forecast method
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Forecasting
• What people say
– surveys of buyers’ intention
– composite sales force opinions
– expert opinion
• What people do
– test markets
• What people have done
– time-series analysis
– statistical demand analysis
– leading indicators
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