What is the business market, and how does it differ from the consumer market?
The business market includes the variety of organizations and firms that are related to each other because both producers and suppliers of different goods and services are presented in it. Therefore, business markets are typical for such industries as construction, finance, and agriculture among others because the buying-selling relations between different organizations within the industry influence the development of the market (Kotler and Keller 183). In contrast to the consumer market, this type of market is characterized by fewer buyers that are usually large companies; by specifically located buyers to address the needs of the concrete industry; by closer and developer relationships with suppliers to guarantee the continuous work of the firm; and by the inelastic and fluctuating demand that is derived referring to the monitoring of consumer behaviors and economic tendencies. In addition, the business market is different because much attention is paid to diverse buying influences and more sales calls to address the buying need. In the context of purchasing from manufacturers, business buyers need to demonstrate the effective or professional decision-making.
What buying situations do organizational buyers face?
Situations faced by organizational buyers can be divided into three types: “straight rebuy”, “modified rebuy”, and “new task” (Kotler and Keller 185-186). The straight rebuy is characterized by re-ordering the previously purchased goods because they are regularly used for the production process. This rebuy can be set as automatic. When a buyer decides to change some aspects of purchasing, including the goods’ characteristics or prices, he discusses this opportunity with suppliers directly, and this situation is known as the modified rebuy. When it is necessary to buy a new product or service, it is possible to speak about the new task situation, and it involves many participants representing the organization and supplier to agree on the purchase.
Who participates in the business-to-business buying process?
The main role in the buying process is played by the representatives of the “buying center” in the organization, who perform different roles. Initiators state the necessity of buying the certain goods or services. Users provide their opinion because they utilize the received goods and services directly. Influencers play the key role in deciding what features the purchased service or product should have. Deciders influence the process of selecting the product or supplier according to the stated features. Approvers are important to authorize the purchase. Buyers play the key role in contacting the supplier and negotiating the terms and conditions. Gatekeepers are those persons who can play their role in preventing the share of the information regarding sellers and suppliers. It is important to note that several roles can be performed by one person (Kotler and Keller 188).
How do business buyers make their decisions?
The decision-making is realized by business buyers during the specific stages of the buying process. The majority of decisions are made in relation to the new task situation, and a few decisions are made in relation to the straight rebuy. During the first stage of the problem recognition, decision-makers decide whether it is necessary to realize the new task or the modified rebuy (Kotler and Keller 200). Then, during the general need description, the managers provide arguments for the necessity of addressing the problem. The decisions regarding the product specification are made at the next stage in relation to all three buying situations. The following stage is the supplier search completed by deciders. During the next phase, approvers and buyers work at the proposal solicitation. The supplier selection is made by deciders, and it is relevant to the new task and modified rebuy situations. The order-routine specification is completed by buyers, and the performance review is realized by decision-making for three situations (Kotler and Keller 200).
How can companies build strong relationships with business customers?
Business marketers focus on developing close, profitable, and strong relationships with the business customers while addressing their interests, creating the idea of value, and using technologies to support the interaction. The effectiveness of relationships depends on the category to which marketers place these relationships (Kotler and Keller 205). The majority of strong and beneficial relationships are based on the idea of adaptation, transaction, the high level of trust, cooperation, and commitment. These factors are important to influence the profitable interactions between business marketers and customers (Kotler and Keller 206). It is important for companies to develop the supply chain while referring to the principles of the effective partnership.
How do institutional buyers and government agencies do their buying?
Such institutional buyers as healthcare organizations, educational institutions, and government organizations among others pay much attention to the abilities of suppliers to address certain requirements and quality expectations. Prior to deciding on buying, it is necessary for them to examine the goods and services provided by suppliers (Kotler and Keller 212). Moreover, before signing the agreement, it is also necessary to fill in the variety of documents in order to support the contract because it is based on other principles than for-profit agreements. As a result, the buying decision can also be supported by such practices as setting bids and selection among numerous alternative propositions. There are also specific guidelines to regulate the process of selling and purchasing in relation to institutional buyers.
Kotler, Philip, and Kevin Lane Keller. Marketing Management. New York: Prentice Hall, 2011. Print.