B-Business Markets and Business Buying Behaviour

8/13/2019 B-Business Markets and Business Buying Behaviour

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BusinessMarkets and

Business Buyer

Behavior


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Definition Business Buyer Behavior:

The buying behavior of organizationsthat buy goods and services for use inthe production of other products and

services or for the purpose of resellingor renting them to others at a profit.


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Characteristics of Business Markets

Sales in the business market far exceed sales inconsumer markets.

Business markets differ from consumermarkets in many ways.

Marketing structure and demand

Nature of the buying unit

Types of decisions and the decision process

Business Markets


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Business Markets

Marketing Structureand Demand

Nature of the

Buying Unit Types of Decisions

and the DecisionProcess

Compared toconsumer purchases:

Business purchasesinvolve more buyers inthe decision process.

Purchasing efforts are

undertaken byprofessional buyers.

haracteristics


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Business Markets

Marketing Structureand Demand

Nature of the

Buying Unit Types of Decisions

and the DecisionProcess

Compared toconsumer purchases:

Business buyers facemore complex buyingdecisions.

The buying process is

more formalized. Buyers and sellers work

more closely togetherand build long-term

relationships.

haracteristics


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Major Types of Buying Situations

Straight rebuyReordering without modification

Modified rebuy

Requires modification to prior purchaseNew task

First-time purchase

Business Buyer Behavior


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Participants in theBusiness Buying Process

Business Buyer Behavior

Users

Buyers

Influencers

Deciders Gatekeepers


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Major Influences on

Business Buyers

Environmental

Organizational

Interpersonal

Individual

Economic trends

Supply conditions Technological change

Regulatory andpolitical environments

Competitivedevelopments

Culture and customs

Key Factors


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Major Influences on

Business Buyers

Environmental

Organizational

Interpersonal

Individual

Objectives

Policies

Procedures

Organizationalstructure

Systems

Key Factors


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Major Influences on

Business Buyers

Environmental

Organizational

Interpersonal

Individual

Authority

Status

Empathy

Persuasiveness

Key Factors


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Major Influences on

Business Buyers

Environmental

Organizational

Interpersonal

Individual

Authority

Age

Education

Job position

Personality

Risk attitudes

Key Factors


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Eight Stages:

Stage 1: Problem Recognition Stage 2: General Need Description

Stage 3: Product Specification

Value analysis helps to reduce costs

Stage 4: Supplier Search

Supplier development

Business Buying Process


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Eight Stages:

Stage 5: Proposal Solicitation Stage 6: Supplier Selection

Stage 7: Order-Routine Specification

Blanket contracts are often used formaintenance, repair and operating items.

Stage 8: Performance Review



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Business Buying on the Internet

E-procurement is growing rapidly. Reverse auctions account for much of the

online purchasing activity.

E-procurement offers many benefits:

Access to new suppliers

Lower purchasing costs

Quicker order processing and delivery



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Institutional Markets Consist of churches, schools, prisons,

hospitals, nursing homes and otherinstitutions that provide goods andservices to people in their care.

Institutional and

Government Markets


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Institutional MarketsOften characterized by low budgets

and captive patrons.

Marketers may develop separatedivisions and marketing mixes toservice institutional markets.

Institutional and

Government Markets


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Government Markets Governmental units federal, state,

and local that purchase or rentgoods and services for carrying outthe main functions of government.

Institutional and

Government Markets


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Government Markets

More than 82,000 buying units.

Require suppliers to submit bids.

Favor domestic suppliers. Extensive paperwork is required from

suppliers.

Institutional and

Government Markets


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Government Markets

Government buyers often favor:

Depressed business firms and areas

Small businessesMinority-owned businesses

Firms which practice non-discriminatorypractices

Institutional and

Government Markets


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Government Markets

Most firms that sell to governmentbuyers are not marketing oriented.

Some companies have separategovernment marketing departments.

Much of government buying has

migrated online

Institutional and

Government Markets

Documents

B-Business Markets and Business Buying Behaviour