Business Marketing

The difference between the consumer and business market is that the latter’s target customers are not consumers, or private individuals, or households – its target customers are other businesses and organizations that purchase products and services in order to resell or provide another kind of service. (Dibb, Ferrell, Simkin, & Pride, 2012, p. 178)

Coca-Cola is definitely not just in consumer markets, but also in business markets. Coca-Cola is sold to reseller markets: both wholesaler and retailer markets (i.e. Jumbo, Albert Hein, Plus in the Netherlands). Furthermore, it is also sold in institutional market, for example Saxion University, and other schools, museums, hospitals, and more public-sector bodies. This is to provide goods (in this case, drinks) to students and/or members of each sector.

Business purchases are categorized into three: new task purchase, modified rebuy purchase, and straight rebuy purchase. For Coca-Cola, straight rebuy purchase will be most likely applicable for other businesses, as purchases are done routinely under the same terms of sale. This also requires little additional information therefore re-ordering can be done relatively quicker than the first two types of purchasing mentioned. (Dibb, Ferrell, Simkin, & Pride, 2012, p. 188)

Each organization has a group of people who make business-to-business purchasing decisions – this is called a buying center. For example, in an institutional market, there are the ‘buyers’ who are responsible for selecting suppliers and making negotiations. They are more commonly known as the purchasing managers. However, they may not be the ones using the products to be purchased therefore they must take into consideration the opinions of the so-called ‘users’. These people evaluate the product’s performance and make relevant suggestions as to whether the product is suitable for use or not. Moreover, there are people responsible for the flow of information between the two, such as secretaries and technical personnel – these are the gatekeepers. (Dibb, Ferrell, Simkin, & Pride, 2012, p. 190)

For an institutional market, such as Saxion University perhaps, the buying process is characterized by five different stages. Firstly, a problem may be recognized (there are not enough drinks to sell in the canteen) by one of the canteen employees or students. Normally, in the buying process comes the development of product specifications, but since the product to be purchased is drinks to resell to customers in the university then this stage may not be necessary. Then, the search for possible products and suitable suppliers are done by the buyer. A supplier analysis may be done. The fourth stage will be the evaluation of the products. Lastly, for Saxion, the buyers can chose whether to involve only one supplier (sole sourcing from a Coca-Cola distributor) or more suppliers (multiple sourcing from other drink distributors).

Most business customers, like producers, purchase products to be used in the production of new goods and services for their own customers, directly and/or indirectly. Consequently, the demand for business products are proportional to the demands for consumer products – also known as derived demand. (Dibb, Ferrell, Simkin, & Pride, 2012, p. 188) This applies to Coca-Cola as a business product. The buyer/purchaser will order a certain number of Coca-Cola bottles that will suffice with how many customers they can get. For example, in Saxion, Coca-Cola bottles will be perhaps equivalent to the number of students and employees they have. Moreover, the demand for cool drinks may be higher during the summer than in winter, therefore Saxion’s purchasing department may consider ordering more Coca-Cola bottles during the summer.

Bibliography

Dibb, S., Ferrell, O., Simkin, L., & Pride, M. (2012). Marketing Concepts & Strategies (6th ed.). Cengage Learning EMEA.