Page 206 - Marketing Management

Analyzing

Business Markets

Business organizations do not only sell; they also buy vast quantities of raw
materials, manufactured components, plant and equipment, supplies, and business services.
According to the Census Bureau, there are roughly 6 million businesses with paid employees in the
United States alone. To create and capture value, sellers need to understand these organizations’
needs, resources, policies, and buying procedures.

Business-software giant Oracle became an industry leader by offering a whole range of
products and services to satisfy customer needs for enterprise software. Known origi-
nally for its flagship database management systems, Oracle spent $30 billion in recent
years to buy 56 companies, including $7.4 billion to buy Sun Microsystems, doubling
the company’s revenue to $24 billion and sending its stock soaring in the process.
To become a one-stop shop for all kinds of business customers, Oracle seeks to offer the
widest ranges of products in the software industry. It now sells
everything from server computers and data storage devices to
Some of the world’s most valuable brands belong to
operating systems, databases, and software for running account-
business marketers: ABB, Caterpillar, DuPont, FedEx, GE,
ing, sales, and supply-chain management. At the same time,
Hewlett-Packard, IBM, Intel, and Siemens, to name a few. Many
Oracle has launched “Project Fusion” to unify its different appli-
principles of basic marketing also apply to business marketers.
cations, so customers can reap the benefits of consolidating
They need to embrace holistic marketing principles, such as
many of their software needs with Oracle. Oracle’s market power
building strong relationships with their customers, just like any
has sometimes raised both criticism from customers and con- marketer. But they also face some unique considerations in
cerns from government regulators. At the same time, its many selling to other businesses. In this chapter, we will highlight
long-time customers speak to its track record of product innova- some of the crucial similarities and differences for marketing in
tion and customer satisfaction. 1 business markets. 2

What Is Organizational Buying?

Frederick E. Webster Jr. and Yoram Wind define organizational buying as the decision-making
process by which formal organizations establish the need for purchased products and services and
identify, evaluate, and choose among alternative brands and suppliers. 3

The Business Market versus the Consumer Market
The business market consists of all the organizations that acquire goods and services used in
the production of other products or services that are sold, rented, or supplied to others. The major
industries making up the business market are agriculture, forestry, and fisheries; mining; manufac-
turing; construction; transportation; communication; public utilities; banking, finance, and insur-
ance; distribution; and services.

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