Marketing Environment | Business to Business Markets | Alison
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Business to Business Markets

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What are the dimensions which we are looking at we are looking at the Nature ofDemand, the Buying influences, the Market structure, the Purchase Motives, then thePurchasing Decision Process and the Purchasing Skills depending on these dimensions.Suppose you are able to identify the characteristic of the business market. Let us say thenature of demand is a derive demand, what you mean by saying that it is a derivedemand. You provide a service and the demand gets derived from it is own volume ofsales, what could be an example. Let us say in a place like Bangalore you provide aservice to Vidhan Soudha a bus service from a place where it was not availablepreviously ok.Let us say there is a layout where this direct service to Vidhan Soudha was not available.You introduce a bus service where you can come directly from this particular layout or
region to Vidhana Soudha. Now the first bus which you used you may find that this busis more than full that is more people are standing not getting seats and when is thisdemand coming it is coming perhaps in the peak hours that is the office hours.Suppose the office is to start in and around Vidhan Soudha around 10 o clock, you mayfind between 9 and 10 or 8 and 10 a huge travelling population to Vidhan Soudha fromthis layout. You introduced this bus service to find out what is going to be the sales, youfind that the sales is encouraging instead of one you may increase this two more numberof buses.You may say increase it to two or three or four this is what the decision of the manger isdepending on this situation. This is the dynamic decision making. A derived demandcreates or gets from it is own volume of sales is derived from it is own volume of sales.Suppose buying influences there are many influences which can influence your buyingdecision may be your immediate family members; Maybe it is your parents or yourbrother, your wife or sister.There are many interested priorities that influence the buying decision you want to makethe purchase of a saree let us say to your mother, you may not like to ask your motherwhat type of saree she would like to wear. But give it to her as a surprise, then you maytry to get your decision of buying the saree influenced by your sister or your motherssister or your mothers relative saying that this is her preference and you buy thisparticular saree, it is likely to find favor with her.Now, suppose your market structure says that there is a concentrated demand oftenconcentrated demand. That is a small number of large customers often make a make up asubstantial share of the market. In marketing terminologies sometimes also in inventoryterminologies, you say A account A capital A account what is this capital A account.These are large customers many times making up a substantial share of the market andthat is there almost able to take up the entire whatever you have produced so, but theirrelative number might be small. Some three or more large customers might account forthe entire sales volume that you are getting. You may not be looking at your B and Ccategory customers at all you may at best come from A to B, but never move to C thisalso happens in many of the situations.
If you look at the market in Bangalore with respect to flowers, many times when youmay find in the main market the flowers are available to you at a particular rate. Which isalways much lower compared to what is available to you in the retail market. Supposeyou are wanting a large quantity of flowers what will be your decision making yourdecision making is not to go to this retail market. But go to this whole sale market in themain market place pick up the entire stock.Many times in the main market place you find that these entire stock gets exhaustedwithin a few hours. So, a large large buying by a small number of customers takes placehere. Depending on the where what is the type of decision that you want to makewhether it is with respect to individual or with respect to organization, your purchasingmotives are going to be different. That is the business products are purchased tocontribute to the achievement of organizational objectives.If you are taking a product to achieve an organizational objective, your decision makingis different. Suppose it is for an individual objective your decision making is different.An example could be your TV for an organization you might like to have a very widescreen TV, for your individual use you may not like to have that wide a screen you maysay this is enough for me.Whereas, for an organization you may say make this screen 50 plus whereas, when youcome to the individual your happy enough to be at 32 also. This is the way yourpurchasing motives are likely to get influenced. Many times’ if you are in anorganization the purchasing decision process is often complex, it is not going to besomething like where you just like I make a buy of this product no it is not going tohappen.So many people are involved in the decision making. Major organizational buyingdecisions they involve long and complex analysis. Suppose you want to buy computersto the supercomputing center in the institute of science. Let us say your decision is manytimes complex and also lengthy you are not going to make an immediate decision.You go through a complex process and a lengthy process before you zero in on thisparticular supplier, whether it is Hp or Dell. In order pick up that particular supplier youhave gone through a large number of suppliers and a lengthy evaluation process. Large
number of parameters on which you have looked at the product and then said this is thebest which is available to us and which we can going for this organization.All these calls for good professional skills and these professionals have to be well trainedto take these decisions. All these purchasing skills in order words have to come from agood professional training. You cannot say all of a sudden you will make a purchasingdecision a novice will not be in a good position to take professional decisions. He has tobe trained and this training only is likely to give him the ability to make professionaldecisions.(Refer Slide Time: 11:19)
When you are looking at the Macro Environment, today we are having in addition toSWOT analysis that is the strength weakness opportunity and threat. Two other types offrameworks which are invoke one is called the PEST Framework. What is this PESTframework? This is you are looking at the macro environment kindly note that. You arelooking at political, economic, social and technological environment.What is the type of political environment around, is it suitable to your business or notsuitable to your business. What is the type of economic environment is the purchasingpower good enough to buy your product. If you look at the present day scenario anIndian consumer a few decades back may be one decade back only, you could neverhave though that he can afford a Benz that is a large section of this.
But what is the present day scenario? The present day scenario is quite a good number ofIndian consumers can afford Benz, can afford even the Rolls Royce also. This is the typeof a economic scenario that has presented itself. Many of them use the Jaguar. These arethe trends which the companies look at. The PEST framework helps the organization tofind out whether the product which they are selling is likely to find to favor in the marketplace.In addition to the pest framework you also have in the present-day macro environment afew more items added in this deep list framework. You add demography you addenvironmental you add legal you add informational to all the once which we just listedabove.You look that you are getting a eight factor environment macro environment analysis, aframework for macro environment analysis coming into place. You have the PESTframework you have the DEEPLIST framework, organizations adopt either thisframework or combination of the frameworks in combination. They may adopt both thepest and the deep list to decide which is the best marketing strategy to be adopted.We are looking at all these environments to tailor the marketing strategy for theorganization. The originations do what we call an environmental analysis. Thisenvironmental analysis helps them to do a good marketing strategy and in order todevelop this marketeering strategy these two frameworks can be help full. One is thePEST framework where we look at political economic social and technological aspects.The second one is the deep list framework where we look at demographic, economic,environmental, political, legal, informational, social and technological factors. These canbe help full for an organization.
(Refer Slide Time: 15:44)
Now around with all these we can draw these strategies and we can also draw themarketing plan for a product or a market. What is this marketing plan? If you look at themarketing plan the focus is on the product or market details, strategies and programs, forachieving the products objectives in that market. This is in contrast to a business strategicplan you are looking at the marketing plan as a whole. It may be marketing plan for thecompany.You are looking at individually with respect to products and markets, then gives thedetails strategies programs you would like that you go through the entire gamete of thecompany as a whole. In other words, these strategies form a subset of the marketing plan,that is the marketing strategies with respect to the product or the market form a subset ofthe whole marketing plan.In order to draw these strategies, we make use of what is called the Market InformationSystems. This marketing information systems has got four important components one iscalled the internal reports, where we get the current data and sales costs inventories cashflows accounts receivable and payable. In other words, the internal reports provide youwith what is happening on the field that is the happening on the field on a day to daybasis current data, not the past data kindly note that.Then the second one which comes in is what is called the marketing intelligence. Youmake use of many marketing people to gather data on a day to day basis, to provide
information on the external environment. The third one is what is called the MarketingResearch. What is this marketing research? It is information relevant to a specificmarketing problem.You are posed with a specific marketing problem, when you are given that specificmarketing problem. How do you define that problem and how what is your researchobjectives, how do you develop that research plan in order to execute that plan what typeof information needs to be collected and how do you analyze that information and comeout with the findings?This market research involves information relevant to a specific marketing problem. Aproblem definition and research objectives developing research plan informationcollection analysis and findings. The fourth component of the marketing informationsystem is what we call the analytical marketing system.This analytical marketing system deals with advanced statistical procedures and models,you adopt different statically models. It may be there in your statistical bank or you maydevelop a model for that particular situation, it is it will in that case it will become asituations specific model. Depending on what you are going to do you are going to adaptthat particular procedure and model, depending on the type of problem that is posed.Many times, you may have to develop an algorithm a marketing algorithm to solve aproblem. What is the present-day trend? The present-day trend is marketing analytics.They are making use of this analytical trends to find out what the consumer might beinterested in. It is basically a method to find out the interests of the consumer.Suppose you expressed interest in a particular product say A, there may be so manyproducts which are similar to A. What is this analytics going to tell you this analytics isgoing to throw up so many particular products? Let us say give an example you want togo from here to Cochin, then making you may say I want to look at the morning flightsfrom Bangalore to Cochin.Now, this analytical marketing might ask you few more questions. What is the type ofquestions, you may they may ask you which time are you looking at are you looking atflying between 6 and 9 or between 9 and 12 or between 8 and 10 or between 8 and 11 inthe morning how is the this thing.
Suppose you say I do not mind any flight going from starting from 8 o clock up to 11 oclock. What does this analytical marketing going system going to do? It will throw up foryou a number of options saying look indigo is coming operating at this level at 9 o clock.You have the Air India operating at this time. It is a straight flight to Cochin suppose youare abled, you want a hopping flight say via Hyderabad to Cochin you have these optionsavailable to you. This is what the marketing analytics team does and throws up.You have many sites of this nature which are available to you in the market place today,thanks to all the digital marketing going on. You go to a site like make my trip and thatmake my trip will ask you all these details go to Yatra dot com again different options.Then there are s, many sites of this nature which can give you lot of inputs and you needin addition to giving you input they also provide you different incentives to buy fromtheir sites.They say if you buy 10 percent off 5 percent off on this domestic route all these types ofthings. In order to make your decision-making process easier and also more comfortableto you that is you will think, that I got a good deal from this particular site. So, these sitesare giving making use of marketing analytics in a wonderful manner.Many times, some of these if you go to an airport today, you have it is not like theprevious few decades back scenario. You use to get these flights coming into a city notso frequently. Say once in half an hour or once in 1 hour and the turnaround time wouldalso be a little higher. But what is the present day? The present data scenario is yourlanding in a city and before you can come to your baggage collection area you find thatyour baggage has already come in.This baggage collection and putting it on the conveyor belt the particular conveyor belt isdone by different people. So, that as soon as you come to your baggage collection areayour baggage is available to you to be picked up and walked out of walked out of theairport. So, this particular baggage handling is also being done by so many companies indifferent airports.These different companies are looking at different analytics. Suppose what do you meanby this different suppose we the baggage arrival gets delayed by say 5 minutes or 10minutes. What is it is effect on the turnaround time is the next flight going to be delayedhow much?
So, in the present-day marketing conditions what is happening is, you are saying thatsuppose your flight is taking more than 15 minutes than the scheduled. Suppose it was totake off at 8 o clock and they put up to you that it is taking off at 8:20 or 8:30. Then thatmeans, to say that there is a delay from 8 to 8:5 or 8:10, the airport does not consider itas a delay.Suppose it crosses that 15 minutes it is considered a delay. It may be due to so manyreasons now this baggage handling companies are also looking at analytics to find outwhether this is being contributed through them and how best to solve or get over thisproblem. We stop here we will continue in the next class.

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