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Basics of Marketing - Kotler Philip

Summary

The enterprise market is a set of individuals and organizations that purchase goods for use in further production, for resale or redistribution. Enterprises are the market of raw materials, components, devices, auxiliary equipment, supplies and services.

The market of industrial goods consists of individuals and organizations that purchase goods and services to increase sales, reduce production costs, fulfill any public or legal requirements. Compared with the consumer goods market, there are fewer buyers on the market of industrial goods, these few buyers are larger and more closely geographically concentrated. Demand for industrial goods is determined by the demand for consumer goods, inelastic and dramatically changing. Procurement in the market of industrial goods is carried out by professionals, and decisions taken by buyers for the needs of industry vary depending on the situation. There are three main types of purchasing situations: re-purchase without changes, re-purchase with changes, and purchase of a day to solve new tasks. The structure of the administrative department of the purchasing organization (the so-called purchasing center) is used by all those who play a role in the procurement decision-making process. Among them are the actual users of the product, all those who influence decision-making, suppliers, decision makers, and persons controlling procurement information. The seller of industrial goods needs to know who are the main participants in the decision-making, what decisions are affected by their impact, what is the relative degree of significance of this influence, what evaluation criteria each participant in the decision-making process has. In addition, the seller of industrial goods must understand the factors that affect the decision to purchase, as factors of the environment, organizational characteristics, interpersonal relations and individual characteristics of the individual. The procurement process itself consists of eight stages: awareness of the problem, a general description of the need, an assessment of the characteristics of the goods, the search for suppliers, the solicitation of proposals, the selection of the supplier, the development of the procedure for issuing the order and the evaluation of the supplier. Buyers of goods for the needs of the industry become more sophisticated, and sellers of these goods should improve their marketing capabilities.

The market of intermediate sellers consists of individuals and organizations that purchase and sell goods produced by others. Intermediaries need to make decisions about suppliers, prices, terms of delivery and product range. In small wholesale or retail organizations, purchases can be made by one or more persons, in large organizations - by a special purchasing department. When working with new products, intermediate sellers adhere to the same procurement process as buyers of industrial goods. In the case of standard goods, the procurement process consists of a routine procedure for issuing a re-order and reviewing the terms of the contract.

The market of state institutions has a huge capacity. Its participants annually spend more than $ 476 billion to purchase goods and services for defense, education, public welfare and other social needs. The practice of public procurement is characterized by pronounced specificity and the availability of clear technical requirements. At the same time, a large part of purchases are carried out by the method of open tenders or the method of concluding contracts based on the results of negotiations. The activity of government buyers is closely watched by the Congress, the Budget Bureau and a number of private monitoring and control groups. Therefore, when carrying out public procurement, it is usually required to make out a large number of documents, more signatures, and the process of issuing an order is delayed.