Marketing Management

Lecture-3
 Consumer Buying Behavior
Product Economic
Price Marketing and Technological
Place Other Stimuli Political
Promotion Cultural

Buyer
Buyer’s decision Buyer’s Black Box characteristics
process ”what” & “how” affecting consumer
behavior

Product choice Purchase timing

Brand choice Buyer’s Response
Purchase quantity
Dealer choice
 Characteristics Affecting Consumer
Behavior

◆ Cultural
◆ Social
◆ Personal
◆ Psychological
Buyer Decision Process
 Need Recognition

Information Search
Cultural, Social,
Individual and
Psychological Evaluation
of Alternatives
Factors
affect
all steps
Purchase

Postpurchase
Behavior
Cultural Social
Factors Factors
CONSUMER BUY /
DECISION- DON’T BUY
MAKING
PROCESS
Psycho-
Individual logical
Factors Factors
Today’s Topics
Business Markets and Buying
Behavior
 What is a Business Market?

The Business Market - all the organizations that buy goods and
services to use in the production of other products and services
that are sold, rented, or supplied to others.
Characteristics of Business Markets
 Market Structure and Demand
▪ Fewer, larger buyers
▪ Geographically concentrated
▪ Demand derived from consumers
▪ Inelastic demand
▪ Fluctuating demand
 Nature of the Buying Unit

▪ More buyers
▪ More professional purchasing effort
 Types of Decisions & the
Decision Process

▪ More complex decisions

▪ Process is more formalized
▪ Buyer and seller are more dependent on each other
▪ Build close long-term relationships with customers
 Business Buyer Behavior

The buying behavior of the organizations that buy goods and

services for use in the production of other products and
services or for the purpose of reselling or renting them to others
at profit.
Model of Business Buyer Behavior
 Marketing and
Product Other Stimuli Economic
Price Technological
Place Political
Promotion Cultural

The Buying Organization

Organizational The Buying Center
Interpersonal
Influences and Individual
Buying Decision
Process
Influences

Delivery Terms
Product or Service
Choice Buyer’s Response and Times
Supplier Choice Service Terms
Order Quantities Payment
Business Buying Situations
New Task Buying
Involved Decision Making

Modified Rebuy

Straight Rebuy
Participants in the Business Buying
Process: The Buying Center

Gatekeepers Users

Buying
Deciders Center Influencers

Buyers
Initiator Influencer

User Buying Decider

Center

Gate-
keeper Buyer
 Major Influences on
Business Buying
Environmental
Organizational
•Level of
demand Interpersonal
•Economic •Objectives Individual
outlook •Interests •Age
•Policies
•Interest rate •Authority •Income Business
•Procedures •Education
•Rate of techno- •Status •Job position Buyer
logical change
•Organizational •Personality
•Political and structures •Empathy •Risk attitudes
regulatory •Culture
developments •Systems •Persuasive-
ness
•Competitive
developments
•Social responsi-
bility concerns
Stages in the Business
Buying Process
Problem Recognition

General Need Description

Product Specification

Supplier Search

Proposal Solicitation
Supplier Selection

Order Routine Specification

Performance Review
Key Organizational Buying Criteria
 Quality Delivery
Price Specifications Schedules

Past
Technical Organizational
Performance
Capability Buying Criteria

Warranty/ Production
Claim Policies Facilities/Capacity
 Institutional Markets

Schools, hospitals, nursing homes, prisons and other

institutions that provide goods and services to people in
their care.
 Government Markets

Governmental units-federal and provencial-that purchase or rent

goods and services for carrying out the main functions of
government.
Difference between Business Marketing
and
Consumer Market

◆ Fewer buyers, concentrated, competitive

◆ Driven by derived demand
◆ More inelastic
◆ More professional, complex
◆ Direct purchase from producer
▪ Long-term relationship
▪ More leasing
▪ More departments are involved
▪ Users, influencers, buyers, deciders, gatekeeper