Institutional Market
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Bhupen YadavInstitutional Market
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Bhupen YadavThe definition of business marketing is organizations, governments, businesses, or an individual facilitating the sale of their services or product to other
organizations that resell them.
Marketplaces where organizations purchase raw materials, natural resources and components of other products for their resale or for use in manufacturing another product.
Business markets are generally made up of businesses which buy products and raw materials for their own operation.
1. Few large buyer. 2. Relationship with suppliers is much closer and long lasting. 3. Purchasing activities are embraced by professionals. 4. Inelastic demand in short run. 5. Direct purchasing from manufacturer. 6. The business market is huge and involves far more money and items than do consumer market.
Fisher (1976) tabled that the following represents the nature of the decision making process in an organization 1. Problem Recognition - Recognition of a need or problem that can be met by acquiring a good or service. 2.General Need Description - Determination of characteristics, specifications and quantity needed.
3.Product Specification -Value analysis(an approach to cost-reduction) in which components are studied carefully to determine if they can be redesigned, standardized or made by less costly methods of production. 4.Supplier Search -Search for and qualification of potential sources . 5.Proposal Solicitation -Acquisition and analysis of proposals.
6.Supplier Selection -Evaluation of proposals and selection of supplier or suppliers 7.Order-Routine Specification -selection of order-routine. The buyer writes the final order with the supplier chosen.
8.Performance Review -performance feedback and evaluation
1. Business market is huge. 2. Similar to consumer market but not the same.
1. 2. 3. 4. 5.
Sales are personally. Customized products. Purchaser is integrator. Purchase cost is a small part of total cost. Exchange is of strategic intent.
1. Demand 2. Nature of buying unit 3. Types of decision and the decision process.
Business buyers respond to many influences when they make their decision. When supplier offers are similar, business buyers can satisfy the purchase requirements with any supplier. When supplier offers differ substantially, business buyers are more accountable for their choices and pay more attention to economic factor.
1. ENVIRONMENTAL FACTORS: Close attention to present and expected economic factors. Make long term contracts with suppliers. 2. ORGANIZATIONAL FACTORS: Every organization structures and policies vary from others. So because of this above reason buying business behavior is affected inside the organization.
3. INTERPERSONAL & INDIVIDUAL FACTORS: Buying decision is influenced due to the interests, status, age and authority of the business buying. Also influenced by likes and dislikes of business buyers. 4. CULTURAL FACTORS
There are three types of buying situations. At one extreme is the straight rebuy, which is a fairly routine decision. At the other extreme is the new task,which may call for thorough research. N the middle is the modified rebuy, which requires some research
What is institutional market? Institutional Market: consists of schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care. Example.
Institutional markets are characterized by low budgets and captive patrons. Marketers set up separate divisions to meet the special characteristics and needs of institutional buyers.
The Background:
Institutional market are often overlooked in B2B Marketing How to sell them: Catalogs are often the best method for contact.
Governmental units federal,state, and local that purchase or rent goods and services for or carrying out the main functions of government.
More than 82,000 buying units. Require suppliers to sumbit it bids Extensive paperwork is required from suppliers. Government buyers often favor ?
Most firms that sell to government buyers are not marketingoriented. Some companies have separate government marketing departments. Much of government buying has migrated online
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