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Business Markets andBusiness Buyer Behavior

Chapter 6

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DefinitionBusiness Buyer Behavior:

The buying behavior of organizations that buygoods and services for use in the production ofother products and services that are sold, rented,or supplied to others.

Also included are retailing and wholesaling firmsthat acquire goods for the purpose of reselling orrenting them to others at a profit.

Goal 1: Define the business market

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Sales in the business market far exceed salesin consumer markets.

Business markets differ from consumer

markets in many ways. Marketing structure and demand

Nature of the buying unit

Types of decisions and the decision process

Characteristics of

Business Markets

Goal 1: Define the business market

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Business Markets

Compared toconsumer markets:

Business markets have fewer but larger

customers

Business customers are more

geographicallyconcentrated

Demand is different Demand is derived Demand is price

inelastic Demand fluctuates

more

Characteristics

Goal 1: Define the business market

Marketing Structureand Demand

Nature of theBuying Unit

Types of Decisions andthe Decision Process

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Business Markets

Marketing Structureand DemandNature of theBuying UnitTypes of Decisions and

the Decision Process

Compared to consumerpurchases:

Involve more buyers inthe decision process

More professionalpurchasing effort

Characteristics

Goal 1: Define the business market

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Business Markets

Marketing Structureand DemandNature of theBuying UnitTypes of Decisions and

the Decision Process

Compared to consumerpurchases More complex buying

decisions The buying process is

more formalized

Buyers and sellers workmore closely together and

build long-termrelationships

Goal 1: Define the business market

Characteristics

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Major Types of Buying Situations

Straight rebuy Reordering without modification

Modified rebuy

Requires modification to prior purchase

New task First-time purchase

Business Buyer Behavior

Goal 1: Define the business market

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Business Buyer Behavior

Systems Selling Buying a packaged solution to a

problem from a single seller. Often a key marketing strategy for

businesses seeking to win and holdaccounts.

Goal 1: Define the business market

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Business Buyer Behavior

Buying Center The decision-making unit of a buying

organization Includes all individuals and units

that participate in the decisionmaking

Goal 1: Define the business market

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Major Influences on

Business Buyers

Environmental

Organizational

Interpersonal

Individual

Economic trends

Supply conditionsTechnological, politicaland competitivechangesCulture and customs

Key Factors

Goal 2: Identify the major factors that influence business buyer behavior

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Major Influences on

Business Buyers

Environmental

Organizational

Interpersonal

Individual

Objectives

PoliciesProceduresOrganizationalstructure

Systems

Key Factors

Goal 2: Identify the major factors that influence business buyer behavior

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Major Influences on

Business Buyers

Influence of

members in thebuying center Authority Status Empathy Persuasiveness

Key Factors

Goal 2: Identify the major factors that influence business buyer behavior

Environmental

Organizational

Interpersonal

Individual

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Major Influences on

Business Buyers

Personal characteristics ofmembers in the buying

center Age and income Education Job position Personality Risk attitudes Buying styles

Key Factors

Goal 2: Identify the major factors that influence business buyer behavior

Environmental

Organizational

Interpersonal

Individual

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Stages in the Business

Buying ProcessStage 1: Problem Recognition

Stage 2: General Need Description

Stage 3: Product Specification Value analysis helps to reduce costs

Stage 4: Supplier Search

Supplier development

Goal 3: List and define the steps in the business buying decision process

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Stage 5: Proposal Solicitation

Stage 6: Supplier Selection

Stage 7: Order-RoutineSpecification

Blanket contracts are often used for

maintenance, repair and operatingitems.

Stage 8: Performance Review

Stages in the Business

Buying Process

Goal 3: List and define the steps in the business buying decision process

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E-procurement is growing rapidly

Online auctions and online tradingexchanges (e-marketplaces) account formuch of the online purchasing activity

E-procurement offers many benefits: Access to new suppliers

Lower purchasing costs Quicker order processing and delivery

Business Buying

on the Internet

Goal 3: List and define the steps in the business buying decision process