Institutional Market

8/12/2019 Institutional Market

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The definition of business marketing is organizations,governments, businesses, or an individual facilitating thesale of their services or product to other organizationsthat resell them.

Marketplaces where organizations purchase rawmaterials, natural resources and components of otherproducts for their resale or for use in manufacturinganother product.

Business markets are generally made up of businesseswhich buy products and raw materials for their ownoperation.


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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.


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Fisher (1976) tabled that the following represents thenature of the decision making process in an organization

1. Problem Recog ni t io n- Recognition of a need or problem that can be met byacquiring a good or service.2.General Need Desc rip t io n

- Determination of characteristics, specifications andquantity needed.


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3.Prod uc t Specif icat ion-Value analysis(an approach to cost-reduction) in whichcomponents are studied carefully to determine if they canbe redesigned, standardized or made by less costly

methods of production.

4.Sup plier Searc h-Search for and qualification of potential sources

.5.Propo sal Sol ic i ta t ion -Acquisition and analysis of proposals.


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6.Sup plier Select ion

-Evaluation of proposals and selection of supplier orsuppliers

7.Ord er-Rou tin e Specif ic at ion

-selection of order-routine. The buyer writes the final orderwith the supplier chosen.

8.Perfo rm anc e Review

-performance feedback and evaluation


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1. Business market is huge.2. Similar to consumer market but not the

same.


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1. Sales are personally.2. Customized products.3. Purchaser is integrator.

4. Purchase cost is a small part of total cost.5. Exchange is of strategic intent.


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1. Demand2. Nature of buying unit3. Types of decision and the decision process.


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Business buyers respond to many influences when theymake their decision.

When supplier offers are similar, business buyers cansatisfy the purchase requirements with any supplier.

When supplier offers differ substantially, business buyers

are more accountable for their choices and pay moreattention to economic factor.


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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.


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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


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What is institutional market? Institutional Market:

consists of schools, hospitals, nursing homes, prisons,

and other institutions that provide goods and services topeople in their care. Example.


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Institutional markets are characterized by low budgetsand captive patrons.

Marketers set up separate divisions to meet the specialcharacteristics and needs of institutional buyers.


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The Background:Institutional market are oftenoverlooked in B2B Marketing

How to sell them:

Catalogs are often the bestmethod for contact.


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Governmental units federal,state, and local that purchase orrent goods and services for or carrying out the main functionsof government.


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More than 82,000 buying units. Require suppliers to sumbit it bids Extensive paperwork is required from suppliers .

Government buyers often favor ?


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Most firms that sell to government buyers are not marketing-oriented.

Some companies have separate government marketingdepartments.

Much of government buying has migrated online


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Documents

Institutional Market