Business Markets and Business

Buyer Behavior

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 What is a Business Market?
A business market comprises all the
organizations that buy goods and services
for use in the production of other products
and services that are sold, rented, or
supplied to others.
The business market is huge and involves
many more dollars and goods than do
consumer markets.
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 Characteristics of Business
Markets
Contain fewer,
Contain fewer, but
but
Marketing Structure larger
larger buyers
buyers
and Demand Customers are more
Customers are more
geographically
geographically concentrated
concentrated
Buyer demand isis derived
Buyer demand derived from
from
final
final consumer
consumer demand
demand
Demand is often more
inelastic
Demand often fluctuates
more, and more quickly
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Characteristics of Business
Markets
Nature of the Buying
Unit
 Business purchases
involve more buyers.
 Business buying
involves a more
professional purchasing
effort.

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 Characteristics of Business
Markets
Types of Decisions and the
Business Decision Process
buyers
usually face Business
more buying In business
complex process is buying,
buying more buyers and
decisions. formalized. sellers work
more closely
together.

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 Model of Business Buyer
Behavior
Buyer Responses
The Environment The Buying
Organization
Product or
Marketing
service choice
Stimuli: The buying
•Product center
•Price Supplier Choice
•Place
•Promotion
Buying decision Order Quantities
process
Other Stimuli: Delivery terms
•Economic (Interpersonal and and times
•Technological individual influences)
•Political Service terms
•Cultural (Organizational
•Competitive Influences) Payment
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 Major Types of Buying
Situations

New
New TaskTask Buying
Buying
(first
(first time
time purchase)
purchase)
Involved Decision

Modified
Modified Rebuy
Rebuy
(modify
(modifyproduct
productspecifications,
specifications,Prices
Pricesterms
terms
Making

ororsuppliers )
suppliers )

Straight
Straight Rebuy
Rebuy
(routinely
(routinely reorders)
reorders)
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 Participants in the Business
Buying Process
Users
Ethical
Decision-
Factors
Factors Influencers
Making Unit
Situational
Situational
Unexpected
of a Buying
Unexpected

Roles Include Organization Buyers

is Called Its
Attitudes
Buying
Attitudes
of
of
Center.
Others
Others Deciders
Gatekeepers

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 Major Influences on Business
Buyer Behavior
Environmental
Economic
Organizational
developments
Objectives
Interpersonal
Supply Individual
Policies
Conditions Authority
Age Buyers
Procedures
Technological Status Education
change Job Position
Organizational
Empathy Personality
Structure
Political and regulatory Risk Attitudes
developments Persuasiveness
Systems
Competitive
Developments

Culture and customs

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 The Business Buying Process
Stage 1. Problem Recognition
Stage 2. General Need Description
Stage 3. Product Specification
Stage 4. Supplier Search
Stage 5. Proposal Solicitation
Stage 6. Supplier Selection
Stage 7. Order-Routine Specification
Stage 8. Performance Review
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 Business Buying on the
Internet
Business buyers may
purchase electronically by:
 Electronic data interchange
links (EDI)
 The Internet
Connecting to customers to:
 Share marketing information,
 Sell products & services,
 Provide customer support, and’
 Maintain on-going relationships.
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 Benefits and Problems Created
by Buying on the Internet
Benefits: Problems:
 Shave transaction costs  Cut purchasing jobs
 Reduce time between  Erode supplier-buyer
order and delivery loyalty
 Create more efficient  Create potential
purchasing systems security disasters
 Forge more intimate
relationships
 Level the playing field

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 Institutional and Government
Markets
Institutional
Institutional Markets
Markets

Low
Low Budgets
Budgets Captive
Captive Patrons
Patrons

Government
Government Markets
Markets
Red
Red Tape
Tape isis Noneconomic
Noneconomic
Public
Public Review
Review Common
Common Criteria
Criteria
Negotiated
Negotiated Some
Some Buying
Buying
Contracts
Contracts Online
Online
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