Marketing Management
By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha logo copy.tif

SUMMARY by

Chapter

7

Analyzing Business Markets and Buyer Behavior
Business buyers purchase goods and services to achieve specific goals, such as making money, reducing operating costs, and satisfying social or legal obligations. Therefore to provide superior customer value to the business buyers this chapter familiarizes you with the underlying dynamics and process of business buying. Blanket contract establishes a long-term relationship in which the supplier promises to resupply the buyer as needed at agreed-upon prices over a specified period. Because the seller holds the stock, blanket contracts are sometimes called stockless purchase plans. Product value analysis is an approach to cost reduction in which components are carefully studied to determine if they can be redesigned or standardized or made by cheaper methods of production.

Organizational buying is the decisionmaking process by which organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

The Business Market versus the Consumer Market
• • • Fewer buyers: Business marketers normally deal with far fewer buyers than do consumer marketers. Larger buyers: Buyers for a few large firms do most of the purchasing in many industries. Close supplier customer relationship: Smaller customer base and importance of larger customers, suppliers have to customize offerings to meet the needs of individual customers. • Geographically concentrated buyers Derived demand: Demand for business goods is derived from demand for consumer goods, so business marketers must monitor the buying patterns of ultimate consumers. • Inelastic demand: Not much affected by price changes as producers cannot make quick production changes.

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