Sunday, January 3, 2010

Top Ten Concepts from Chapter 7 - Analyzing Business Markets

1. Organizational buying is the decision-making process by which formal organizations establish the need to purchase products and services and identify, evaluate and choose among alternative brands and suppliers.
2. Business Markets as compared with Consumer Markets have fewer, larger buyers, have close supplier-customer relationship and more geographically concentrated buyers.
3. Three types of buying situations are the (1) straight rebuy, (2) modified rebuy and (3) new task.
4. Many business buyers prefer to buy a total solution to a problem from one seller. This is called systems buying.
5. Participants in the business buying process include: (1) initiators (2) users (3) influencers (4) deciders (5) approvers (6) buyers (7) gatekeepers
6. Purchasing departments were perceived to occupy a low position in the management hierarchy, in spite of often managing more than half the company’s costs. However, nowadays, most purchasing professionals describe their jobs as more strategic, technical, team oriented and involving more responsibility than ever before.
7. Stages in the buying process include: (1) problem recognition (2) general need description (3) product specification (4) supplier search (5) proposal solicitation (6) supplier selection (7) order-routine specification (8) performance review
8. To improve effectiveness and efficiency, business suppliers and customers are exploring different ways to manage their business relationships. Closer relationships are driven in part by supply chain management, early supplier involvement and purchasing alliances.
9. Business marketers must form strong bonds and relationships with their customers and provide them added value. However, in establishing these relationships, risks and opportunisms arise in the form of taking advantage of the business situations. These risks and opportunism should be assessed and calculated to determine its business effects.
10. Institutional & Government Markets consist of schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care. Buyers for government organizations tend to require a great deal of paperwork from their vendors and to favor open bidding and domestic companies. Suppliers must be prepared to adapt their offers to the special needs and procedures found in institutional and government markets.

Ronaldo S. Batisan (Dec. 1, 2009)

V47 Ch7 Business Markets Batisan Ronaldo

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