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  • Understanding Business Markets and Environment

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    Jayesh Kumar Yadav
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    This document discusses business markets and the external environment. It covers types of business customers like commercial enterprises, government customers, and institutions. Industrial products are classified as materials and parts, capital items, and supplies and services. Marketing channels vary based on customer and product types. Business customers have different purchasing orientations like lowest price, risk avoidance, and supply chain management. E-procurement is also discussed. The document also outlines types of external environment and strategies for managing external factors like independent, cooperative, and strategic planning approaches.

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    Chapter2

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    This document discusses business markets and the external environment. It covers types of business customers like commercial enterprises, government customers, and institutions. Industrial products are classified as materials and parts, capital items, and supplies and services. Marketing channels vary based on customer and product types. Business customers have different purchasing orientations like lowest price, risk avoidance, and supply chain management. E-procurement is also discussed. The document also outlines types of external environment and strategies for managing external factors like independent, cooperative, and strategic planning approaches.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    18 views12 pages

    Understanding Business Markets and Environment

    Uploaded by

    Jayesh Kumar Yadav
    This document discusses business markets and the external environment. It covers types of business customers like commercial enterprises, government customers, and institutions. Industrial products are classified as materials and parts, capital items, and supplies and services. Marketing channels vary based on customer and product types. Business customers have different purchasing orientations like lowest price, risk avoidance, and supply chain management. E-procurement is also discussed. The document also outlines types of external environment and strategies for managing external factors like independent, cooperative, and strategic planning approaches.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    of 12

    UNDERSTANDING

    BUSINESS MARKETS
    AND ENVIRONMENT
    Chapter 2
    Chapter Questions
    • Who are the business customers?

    • How are industrial products classified?


    • What are the marketing implications for different types of
    customers and products?
    • What are the business customers’ purchasing orientations and
    practices, including e-procurement?
    • What are the different types of environment?

    • How to manage external environment?


    2
    Types of Business Customers

    • Commercial / Private Sector Enterprises


    – Industrial distributors/dealers
    – Original equipment manufacturers (OEMS)
    – Users
    • Government Customers
    – Central & state government units
    – Public sector firms
    • Institutional customers
    – Public and private institutions
    • Cooperative societies
    – Manufacturing & Non-manufacturing units 3
    Classification of Industrial
    Products and Services
    • Materials & Parts(These enter final product)
    – Raw materials
    – Manufactured materials
    – Component parts
    – Subassemblies
    • Capital Items (These are used in production process)
    – Heavy and Light equipment
    – Plant and buildings
    • Supplies & Services (These support operations)
    – Operating and maintenance supplies
    – Wide range of Services 4
    Marketing Channels for
    Different Customers and
    Product Types
    Product Type Customer Type Marketing Channel
    Materials & Parts Large OEMS Company’s sales force
    (Standard ) Users & small OEMS Distributors/dealers
    Materials & Parts All types of Customers Company’s sales force
    (Customized )
    Heavy capital equipment All types of Customers Company’s sales force/agents
    Light equipment or Large volume buyers Company’s sales force/agents
    accessories Medium/small buyers Distributors/dealers
    Plant and building All types of Customers Company’s executives/agents
    Operating & maintenance Large volume buyers Company’s sales force/agents
    Supplies Medium/small buyers Distributors/dealers.
    Large customers Company’s sales force
    Wide range of services Medium/small customers Distributors/Franchisees

    5
    Purchasing Orientations of
    Business Customers
    • Buying orientation
    – Lowest price suppliers
    – Gain power over suppliers
    – Avoid risk
    • Procurement orientation
    – Collaborative relationship with major suppliers
    – Work closely with other departments internally
    – Achieve company objectives
    • Supply chain management orientation
    – Collaborative relationship with major suppliers
    – Deliver superior value to customers
    – Outsource non-core activities 6
    Purchasing Practice of
    Business
    Customers in Commercial
    Enterprises
    • Involvement of various departments

    • Major tasks performed:


    – Identify, negotiate, Select suppliers
    – Ensure purchase objectives and efficiency achieved
    – Good relationship with suppliers
    – Establish procedure and documentation
    7
    E - Procurement
    • Objective: To seek best value from better and fewer online
    suppliers.
    • Advantages: Reduce material & administrative costs ; minimize
    purchasing cycle time ; improved ability to identify new
    suppliers on global scale.
    • E-markets: offer online auctions, catalogues, bulletin boards to
    participants
    • Forward/English auction: One seller offers an item to many
    buyers. Sales goes to highest bidder.
    • Reverse/Dutch auction: One buyer invites many suppliers to bid.
    Lowest bidder gets the order. 8
    Purchasing in Government
    Organizations

    • Established Purchase Procedure

    • Purchasing through Competitive Bidding/ Tenders


    – Closed/sealed tenders
    – Open/limited tenders

    • Other Government contracts

    • DGS & D contracts


    9
    Purchasing in Institutions and
    Cooperative Societies

    • Government institutes follow government process

    • Often private sector institutes follow commercial


    enterprise’s buying process

    • Better to study each major customer’s purchase


    process

    10
    Types of Environment

    11
    Managing External
    Environment
    • First, continuously collect and monitor relevant
    information on external environment

    • Identify changes in opportunities and threats

    • Manage proactively, using strategies:


    – Independent
    – Cooperative
    – Strategic planning

    12

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