Business Buyer Behavior

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Chapter 6 Business Markets and Business Buyer
Behavior

• Business Buyer Behavior

Products consumed in production or the conduct of
business The buying behavior of organizations
that buy goods and services for use in the
production of other products and services that
are sold, rented, or supplied to others for a
profit.
Buy low / sell high Also included are retailing
and wholesaling firms that acquire goods for
the purpose of reselling or renting them or
others at a profit.
In pursuit of profit.
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Business Markets
Chapter 6 Business Markets and Business Buyer
Behavior
Consumer Markets
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Business Markets as Compared with Consumer
Markets
Chapter 6 Business Markets and Business Buyer
Behavior

• Marketing Structure and Demand
• Business markets have fewer but larger customers
• Business customers are more geographically
  concentrated
• Demand is derived
• Demand is price inelastic
• Demand fluctuates more
• Nature of the Buying Unit
• Involve more buyers in the decision process
• More professional purchasing effort
• Types of Decisions and the Decision Process
• More complex buying decisions
• The buying process is more formalized
• Buyers and sellers work more closely together and
  build long
• term relationships

P
See Contrast Table
Q
See Non-Adversarial Behavior
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Business Buyer Behavior
Chapter 6 Business Markets and Business Buyer
Behavior

• Types of Buying Situations
• Straight rebuy
• Reordering without modification
• Modified rebuy
• Requires modification to prior purchase
• New task
• First-time purchase
• Systems Selling
• Buying a packaged solution to a problem from a
  single seller.
• Often a key marketing strategy for businesses
  seeking to win and hold accounts.
• Buying Center
• The decision-making unit of a buying organization
• Includes all individuals and units that
  participate in decision making

See Additional Slide
See Vendor Strategies
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Members of the Buying Center
Chapter 6 Business Markets and Business Buyer
Behavior

• Users Most often the initiators who initially
  define the products specs.
• Influencers - Often technical support persons who
  will alter/shape the products specs.
• Buyers Professionals whos major role is to
  select potential vendors (solutions) based upon
  the specs.
• Deciders Those with the power (formal or
  informal) to approve the purchase.
• Gatekeepers Those who control access and flow
  of information.

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Major Influences on Business Buyers
Chapter 6 Business Markets and Business Buyer
Behavior
May be viewed as layers of influence that
encompass the buyer (kernel).
Buyer Individual Interpersonal Organiz
ational
6 - 6
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Influences on Business Buyers
Chapter 6 Business Markets and Business Buyer
Behavior
Interpersonal Influence of buying center
members Authority Status Empathy
Persuasiveness Individual Personal
characteristics of members in the buying
center Age and income Education
Job position Personality Risk
attitudes Buying styles

• Environmental
• Economic trends
• Supply conditions
• Technological, political changes
• Competitive changes
• Culture and customs
• Organizational
• Objectives
• Policies
• Procedures
• Organizational structure
• Systems

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Behavioral StylesRelationship Strategies
Chapter 6 Business Markets and Business Buyer
Behavior
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Chapter 6 Business Markets and Business Buyer
Behavior
Stages in the Business Buying Process
Internally Motivated Externally Motivated
Desired Attributes Importance Ratings
Product Specs Value Analysis
Directories Searches
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Chapter 6 Business Markets and Business Buyer
Behavior
Stages in the Business Buying Process
RFPs Presentations
Attributes by Importance One vs Many
Technical Specs, Quantities Prices Delivery
Schedules, Return Policies Warrantees
Satisfaction History vs Expectations Continue,
Modify or Abort
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Business Buying on the Internet
Chapter 6 Business Markets and Business Buyer
Behavior

• E-procurement is growing rapidly.
• Online auctions and online trading exchanges
  (e-marketplaces) 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

B2B online sales is 13 times larger than B2C
online sales
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Chapter 6 Business Markets and Business Buyer
Behavior

• Institutional Markets
• Consist of churches, schools, prisons,
  hospitals, nursing homes and other institutions
  that provide goods and services to people in
  their care.
• Often characterized by low budgets and
  captive patrons.
• Marketers may develop separate divisions and
  marketing mixes to service institutional
  markets.

Government Markets
More than 82,000 buying units in the U.S.
Require suppliers to submit bids and
often give job to lowest bidder Favor
domestic suppliers Much red tape can exist