ANALYZING BUSINESS MARKETS AND BUSINESS BUYING BEHAVIORS

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CHAPTER 7

• ANALYZING BUSINESS MARKETS AND BUSINESS BUYING
  BEHAVIORS

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BUSINESS-TO-BUSINESS MARKET

• Business-to-Business Consumer
  
• Market
  Market
• 1. Businesses
• 2. Government/Military
• 3. Institutions

Business
Business
Consumers
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ORGANIZATIONAL BUYING

• Business vs. Consumer Market
• Mrk.Characteristics Consumer Business
• Number of buyers Many Few
• Size of Buyers Small Large
• Supplier Relations No Close
• Concentration No. Yes
• Demand Unpredictable Derived
• Demand Elastic
  Inelastic

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ORGANIZATIONAL BUYING (CONT.)

• Mrk.Characteristics Consumer Business
• Demand Normal
  Fluctuating
• Professional Purchasing No Yes
• Purchasing Middlemen Direct
• Buying Influence No Yes
• Reciprocity No
  Yes
• Leasing Some
  Heavy

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BUYING SITUATION

• (A)New Task
• (B)Modified Re-buy
• (C)Straight Re-buy
• Buy-grid Model
• (A)
  (B) (C)
• Problem recognition Yes Maybe No
• Need Description Yes Maybe No
• Product Specification Yes Yes Yes

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BUYING SITUATION (CONT.)

• Buy-grid model (cont.)
• (A)
  (B) (C)
• Supplier search Yes Maybe No
• Proposal solicitation Yes Maybe No
• Supplier selection Yes Maybe No
• Proposal solicitation Yes Maybe No
• Supplier selection Yes Maybe No
• Order-routine Spec. Yes Maybe No
• Performance Review Yes Yes Yes

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PARTICIPATION IN BUSINESS BUYING

• System Buying/Selling
• System contracting
• Single supply source provides the entire
  requirement of MRO.
• Large scale projects such as dams, refineries,
  steel factories.
• Buying Centers
• Initiators
• Users
• Influencers
• Deciders
• Approvers
• Buyers
• Gatekeepers

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PARTICIPANTS IN THE BUSINESS BUYING(CONT.)

• Major Influences In Business Buying
• Environmental factors
• Demand
• economic outlook
• interest rate
• Technology
• political life
• Competition
• social responsibility

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PARTICIPANTS IN THE BUSINESS BUYING (CONT.)

• Major Influences in Business Buying (cont.)
• Organizational factors
• Purchasing department upgrading..
• Cross-functional roles.
• Centralized purchasing.
• Decentralized purchasing for small ticket items.
• Internet purchasing.
• Long term contract.
• Purchasing-performance evaluation.
• Lean production-high quality and JIT inventory
  planning.
• Interpersonal factors
• Interest, authority, status, empathy and
  persuasiveness.
• Individual factors
• Age,income, education, job position,
  personality,risk attitudes
• Cultural factors