Business Markets and Buying Behavior

1
Business Markets and Buying Behavior

• Professor Chip Besio
• Cox School of Business
• Southern Methodist University

2
Business-to-Business Marketing

• Sales to businesses rather than consumers
• Example IBM
• Business-to-Business - sale of a personal
  computer to be used in an office environment
• Consumer Marketing - sale of a personal computer
  for use by a student while at college

3
What is a Business Market?

• Business Market - all organizations that buy
  goods and services to use in the production of
  other products and services that are sold,
  rented, or supplied to others
• Business markets involve many more dollars and
  items do consumer markets

4
Characteristics of Business Markets

• Few, large buyers
• Geographically concentrated
• Derived demand - comes from consumers at the end
  of the channel
• Inelastic demand

5
Business Markets vs. Consumer Markets
Source Adapted fromPrentice Hall
6
Model of Business Buyer Behavior
Marketing and Other Stimuli
Product Price Place Promotion
Economic Technological Political Cultural
The Buying Organization
Interpersonal and Individual Influences
The Buying Center
Organizational Influences
Buying Decision Process
Buyers Response
Delivery Terms and Times Service Terms Payment
Product or Service Choice Supplier Choice Order
Quantities
Source Prentice Hall
7
Participants in the Business Buying Process
Users
Gatekeepers
Buying Center
Deciders
Influencers
Buyers
Source Prentice Hall
8
Business Buying Situations
New Task Buying
Modified Rebuy

• Involved Decision
• Making

Straight Rebuy
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Business Buying Situations NEW BUY

• (Rarest, most complex type)
• Big buying unit
• Many people involved
• Lots of indirect influence
• Slower-than-usual processes
• High risk
• Buying unit gathers and weighs lots of
  information
• Anyone can win
• Performance matters (price not always as much)

10
Business Buying Situations STRAIGHT REBUY

• (Most common, most simple)
• Small buying unit (generally one person)
• Low perceived risk
• So long as quality is acceptable
• "In supplier wins
• "Out suppliers" cant get an appointment
• Out supplier salespeople must wait for "in
  supplier" to fail or requirements to change

11
Business Buying Situations MODIFIED RE-BUY

• A window of opportunity for other suppliers
• An "aging" new task or a "rejuvenated" straight
  re-buy
• Compared to new buy
• Smaller buying unit
• More rapid decision
• Less risk
• Performance and price
• considered

• Compared to straight re-buy
• Larger buying unit
• Slower decision
• More risk