Business Markets

and Behavior

Dr. Shaphali Gupta

Business to Business Marketing

Marketing of those goods and services that

business and organizational customers need

to produce other goods and services for
resale or to support their operations

Dr. Shaphali Gupta

Characteristics of
Business Markets
1. Fewer buyers
2. Larger buyers
3. Close supplier
customer relationship
4. Geographically
concentrated buyers
5. Derived demand

6. Inelastic demand
7. Fluctuating demand
8. Professional
purchasing
9. Several buying
influences
10. Direct purchasing
11. Multiple sales calls

Dr. Shaphali Gupta

Organizational Buying
Buying Situations
Straight rebuy
Modified rebuy
New task

Routine reorders from

approved vendor list
Low involvement,
minimal time
commitment
Example: copier paper

Dr. Shaphali Gupta

Organizational Buying
Buying Situations
Straight rebuy
Modified rebuy
New task

Specifications, prices,
delivery terms or other
aspects require
modification
Moderate level of
involvement and time
commitment
Example: desktop
computers

Dr. Shaphali Gupta

Organizational Buying
Buying Situations
Straight rebuy
Modified rebuy
New task

Purchasing a product or
service for the first time
High level of involvement
and time commitment;
multiple influences
Example: selecting a web
site design firm or
consultant

Dr. Shaphali Gupta

Problem recognition
Purchase requisition
Buying Center formed if needed

Information Search
Product specifications developed
Potential suppliers identified
Proposals and quotations obtained

Steps in the
Business
Buying Process

Evaluation of Alternatives
Proposals evaluated

Samples evaluated
Product & Supplier Selection

Purchase order issued

Post Purchase Evaluation

Users surveyed
Performance
documented
Dr. Shaphali Gupta

Participants in the
Business Buying Process
Initiators

Those who requests that something be purchased

Those who will use the product

Users

Often those who help define the specs, and

provide info for evaluating alternatives

Influencers

Those who decide on product

requirements and/or suppliers

Deciders
Approvers
The business marketer will
have to identify the key
buying influences

Buyers
Gatekeepers
Dr. Shaphali Gupta

Those who authorize the

proposed action
Those who have the
authority to select the
supplier and arrange terms
People who have the
power to prevent sellers
or info reaching the
buying center

Economic Factors that Shape

Purchasing Practices
1.

Profit objective

2.

Long run development and nurturing of the

organizations supply system to assure supply
availability

3.

Return on Investment

4.

Impact of cost on the price to the end user

5.

Quality and delivery schedules

6.

Avoidance of manufacturing risk

7.

Suppliers technical contribution

Dr. Shaphali Gupta

The Influence of Functional Roles

in Buying Decision Making
1. Engineering influences
2. Manufacturing influences
3. Marketing influences
4. General management influences

5. Procurement itself as an influence

6. The ego factor
Dr. Shaphali Gupta

Types of Purchasing Processes

Routine products low value/low risk of supply

Leverage products high value/low risk of supply

Strategic products high value/high risk of supply
Bottleneck products low value/some risk of
supply
Dr. Shaphali Gupta

THATS ALL FOR

TODAY!!!

Dr. Shaphali Gupta