10 concepts: chapter 7 analyzing business markets

1

CHAPTER 7: ANALYZING BUSINESS MARKETS

Briand R. DaydaySeptember 1, 2011

Top 10 Concepts

www.brianddayday.blogspot.com

The Manila Jockey Club, Inc. is one of Asia’s oldest racing clubs, founded in 1867. It is operating under a 25 year franchise granted by the Philippine Congress, which covers off-track betting throughout the country, SMS and internet gaming, as well as simulcast racing. Races in the Philippines alternate every two weeks between MJC and the Philippine Racing Club (PRC), the only other operating race club in the Philippines. Races are Held at MJC 12-14 days a month. Having moved to a new modern location, The San Lazaro and Leisure and Business Park (SLLBP), in Carmona Cavite, MJC is fast evolving into a diversified property and gaming concern.

COMPANYPROFILE

In year 2003, the San Lazaro Leisure and Business Park was developed by the leading architectural firm of Recio & Casas.

This modern racing facility is a 77-hectare (770,000 sqm) integrated horseracing complex that blends world-class sports, leisure, entertainment, and business facilities, located in the foothills of Carmona, Cavite.

The centerpiece of the development is a twin-oval thoroughbred race-track comparable to the best racing facilities in the world.

Concept Outline:

1. Characteristics of Business Markets2. Business Buying Situations3. Roles in Business Buying Process4. Of Concern to Business Marketers5. Stages in Buying Process 6. Overcoming Price Pressures


Concept Outline:

7. Searching for Suppliers8. Researching Customer Value9. Buyer-supplier relationship Factors10. Buyer-seller relationships


Fewer, larger buyers Close supplier-customer relationships Professional purchasing Multiple buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing

Concept 1:

Characteristics of Business Markets


Example 1:

Horseracing (San Lazaro)Manila Jockey Club, Inc.


San Lazaro has ready direct suppliers and standard purchasing procedures for specific construction requirements, and racetrack maintenance. E.G. High voltage lights, sea sand, sandy soil, etc.

Strategic location of OFF-TRACK Betting Stations (OTBs) to penetrate specific target markets, OTB = 93% of its total racing sales.San Lazaro’s strategic move to Cavite is to expand and to penetrate Cavite’s booming economy, Cavite logs in an average of 48M in recreational expenditures.

Concept 2:

Business Buying Situations


Purchase decisions are based on these buying situationsPurchase decisions are based on these buying situations

Example 2:

San Lazaro Horseracing Buying Needs


Concept 3:

Roles in Business Buying Process


Buying Center

Members can play several roles in the purchase decision process

Example 3:

Racetrack ManagementPurchasing Roles

Buying Center

initiators

users

influencers

decidersapprovers

buyers

Gate keepers

Who are the major decision participants?

What decisions do they influence? What is their level of influence? What evaluation criteria do they use?

Concept 4:

Of Concern to Business Marketers


Who are the major decision participants? Division Head, Upper Management

What decisions do they influence? Almost all managerial decisions

What is their level of influence? Final say on all matters

What evaluation criteria do they use? Product quality or service, price, efficiency

of product or service.

Example 4:

San Lazaro Example


Concept 5:

Stages in Buying Process


Concept 5:

Stages in Buying Process


New Task Modified Rebuy

Straight Buy

Problem recognition

General need description

Product specification

Supplier search

Proposal solicitation

Supplier selection

Order-routine specification

Performance review

Maybe

Maybe

Maybe

Maybe

Maybe

Maybe

Example 5:

San Lazaro Examples (refer to Example 2)


CCTV order

Racetrack Maintenan

ce

Office Supplies

Problem recognition

General need description

Product specification

Supplier search

Proposal solicitation

Supplier selection

Order-routine specification

Performance review

Limit quantity purchased Allow no refunds Make no adjustments Provide no services

Concept 6:

Overcoming Price Pressures


Scenario: Unexpected increase in price of raw materials Lessen order of sea sand from supplier. Try other suppliers.

Example 6:

San Lazaro Example


Catalog sites Vertical markets Pure play auction sites Spot markets Private exchanges Barter markets Buying alliances

Concept 7:

Searching for Suppliers


Specific catalog sites Pure play auction sites

Ebay, Amazon, Sulit.com Direct from suppliers

Example 7:

How San Lazaro looks for suppliers


Internal engineering assessment Field value-in-use assessment Focus-group value assessment Direct survey questions Conjoint analysis Benchmarks Compositional approach Importance ratings

Concept 8:

Researching Customer Value


Goal: To further improve service quality of racetrack and off-track betting stations.

San Lazaro does a yearly Customer value research using Focus Group Discussions, and Direct Surveys.

Satisfaction based surveys are also used by San Lazaro for Importance Ratings.

Benchmarking of competitor performance is also used to measure company performance.

Concept 8:

San Lazaro Example


Availability of alternatives Importance of supply Complexity of supply Supply market dynamism

Concept 9:

Buyer-supplier Relationship Factors


Must maintain good relationships with racetrack element suppliers (sea sand, sandy soil), since there are only a handful of suppliers.

Must maintain good relationships with suppliers since if not delivered, horses cannot run properly on the racetrack, ergo no races, therefore no sales.

Example 9:

San Lazaro Buyer-supplier Relationships


Basic buying and selling Bare bones Contractual transaction Customer supply Cooperative systems Collaborative Mutually adaptive Customer is king

Concept 10:

Buyer-seller Relationships


Organizational buying is the decision making process by which formal organizations establish the need for purchased products and services, then identify, evaluate, and choose among alternative brands and suppliers.

The buying center is the decision making unit of a buying organization.

Summary


The buying process consists of eight stages; problem recognition, general need description, product specification, supplier research, proposal solicitation, supplier selection, order routine specification, and performance review.

Business marketers must form strong bonds and relationships with their customers and provide them added value.

Summary


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CHAPTER 7: ANALYZING BUSINESS MARKETS

Briand R. DaydaySeptember 1, 2011

Top 10 Concepts


10 concepts: chapter 7 analyzing business markets

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san lazaro examplesrefer

concept outline

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