Description
The pdf explains,business buyer behavior&business buyer process.
Chapter 7: Business Markets and Business Buyer Behavior
O Business Buyer Behavior
4 Buying behavior oI organizations that buy goods/services Ior use in production oI
other products/services or resell/rent to others at a proIit
4 Includes retailing and wholesaling
O Business Buying Process
4 Decision process where business buyers determine which products/services
organizations need to purchase
4 Then Iind, evaluate, choose among alternatives
7.1 Business Markets
7.1a Characteristics of Business Markets
O Market Structure and Demand
4 Fewer but larger buyers
4 Demand derived Irom Iinal consumer demand
4 Demand is more inelastic
4 Demand Iluctuates more and more quickly
O Nature oI Buying Unit
4 Involve more buyers
4 More proIessional purchasing eIIort
O Types oI Decisions and Decision Process
4 More complex buying decisions
4 More Iormalized process
4 Long-term relationships between buyers and sellers
Supplier Development systematic development oI networks oI supplier-
partners to ensure appropriate and dependable supply oI
products/materials
7.2 Business Buyer Behavior
O Environment
4 Marketing Stimuli (4 P`s)
4 Other Stimuli (PEST, etc)
O Buying Organization
4 Buying Decision Process
O Buyer Responses
4 Product Choice, Supplier Choice, Order Quantities, Delivery terms/times, service
terms, payment
7.2a Major Types of Buying Situations
O Straight Rebuy
4 Buyer routinely reorders something without any modiIications
4 In Suppliers maintain product/service quality
4 Out Suppliers Iind new ways to add value, exploit dissatisIaction
O ModiIied Rebuy
4 When buyer wants to modiIy product speciIications, prices, terms, suppliers
4 Involves more decision participants
O New Task
4 Buyer purchases product/service Ior Iirst time
O Systems Selling (aka Solutions Selling)
4 Buying packaged solution to problem Irom single seller
4 Avoids complex buying situations
7.2b Participants in Business Buying Process
O Buying Centre all individuals/units that play role in purchase decision-making process
4 Users actually use purchased product/service
4 InIluencers aIIect buying decisions, oIten help deIine speciIications
4 Buyers make actual purchase
4 Deciders Iormal/inIormal power to select/approve Iinal suppliers
4 Gatekeepers control Ilow oI inIo to others
7.2c Major Influences on Business Buyers
O Environmental
4 Economic developments, supply conditions, technological change, political/
regulatory developments, competitive developments, culture and customs
O Organizational
4 Objectives, policies, procedures, organizational structure, systems
O Interpersonal
4 Authority, status, empathy, persuasiveness
O Individual
4 Age, education, job position, personality, risk attitudes
O Buyers
7.2d Business Buying Process (for New Task purchase)
. Problem Recognition
2. General Need Description
3. Product SpeciIication
a. Product Value Analysis Ior cost reduction
4. Supplier Search
5. Proposal Solicitation (invite qualiIied suppliers to submit proposal)
6. Supplier Selection
7. Order-Routine SpeciIication (oIten vendor-managed inventory)
8. PerIormance Review
7.2e Eprocurement
O Purchasing through electronic connections (usually online)
O Reduced lead time, reduced transaction costs
O Major security issues
7.3 Institutional and Government Markets
7.3a Institutional Market
O Schools, hospitals, nursing homes, prisons, etc. that provide goods/services to people in
their care
O OIten low budgets and captive patrons
O Strict cost minimization is oIten not the goal (want to exceed minimum standards to
maintain reputation)
7.3b Government Market
O Suppliers bid on contracts, lowest bidder receives contract
O igh level oI watchdog activity
O Many noneconomic criteria
4 Favor depressed Iirms and areas, small Iirms, minority-owned Iirms, avoid
discrrimination
doc_583512158.pdf
The pdf explains,business buyer behavior&business buyer process.
Chapter 7: Business Markets and Business Buyer Behavior
O Business Buyer Behavior
4 Buying behavior oI organizations that buy goods/services Ior use in production oI
other products/services or resell/rent to others at a proIit
4 Includes retailing and wholesaling
O Business Buying Process
4 Decision process where business buyers determine which products/services
organizations need to purchase
4 Then Iind, evaluate, choose among alternatives
7.1 Business Markets
7.1a Characteristics of Business Markets
O Market Structure and Demand
4 Fewer but larger buyers
4 Demand derived Irom Iinal consumer demand
4 Demand is more inelastic
4 Demand Iluctuates more and more quickly
O Nature oI Buying Unit
4 Involve more buyers
4 More proIessional purchasing eIIort
O Types oI Decisions and Decision Process
4 More complex buying decisions
4 More Iormalized process
4 Long-term relationships between buyers and sellers
Supplier Development systematic development oI networks oI supplier-
partners to ensure appropriate and dependable supply oI
products/materials
7.2 Business Buyer Behavior
O Environment
4 Marketing Stimuli (4 P`s)
4 Other Stimuli (PEST, etc)
O Buying Organization
4 Buying Decision Process
O Buyer Responses
4 Product Choice, Supplier Choice, Order Quantities, Delivery terms/times, service
terms, payment
7.2a Major Types of Buying Situations
O Straight Rebuy
4 Buyer routinely reorders something without any modiIications
4 In Suppliers maintain product/service quality
4 Out Suppliers Iind new ways to add value, exploit dissatisIaction
O ModiIied Rebuy
4 When buyer wants to modiIy product speciIications, prices, terms, suppliers
4 Involves more decision participants
O New Task
4 Buyer purchases product/service Ior Iirst time
O Systems Selling (aka Solutions Selling)
4 Buying packaged solution to problem Irom single seller
4 Avoids complex buying situations
7.2b Participants in Business Buying Process
O Buying Centre all individuals/units that play role in purchase decision-making process
4 Users actually use purchased product/service
4 InIluencers aIIect buying decisions, oIten help deIine speciIications
4 Buyers make actual purchase
4 Deciders Iormal/inIormal power to select/approve Iinal suppliers
4 Gatekeepers control Ilow oI inIo to others
7.2c Major Influences on Business Buyers
O Environmental
4 Economic developments, supply conditions, technological change, political/
regulatory developments, competitive developments, culture and customs
O Organizational
4 Objectives, policies, procedures, organizational structure, systems
O Interpersonal
4 Authority, status, empathy, persuasiveness
O Individual
4 Age, education, job position, personality, risk attitudes
O Buyers
7.2d Business Buying Process (for New Task purchase)
. Problem Recognition
2. General Need Description
3. Product SpeciIication
a. Product Value Analysis Ior cost reduction
4. Supplier Search
5. Proposal Solicitation (invite qualiIied suppliers to submit proposal)
6. Supplier Selection
7. Order-Routine SpeciIication (oIten vendor-managed inventory)
8. PerIormance Review
7.2e Eprocurement
O Purchasing through electronic connections (usually online)
O Reduced lead time, reduced transaction costs
O Major security issues
7.3 Institutional and Government Markets
7.3a Institutional Market
O Schools, hospitals, nursing homes, prisons, etc. that provide goods/services to people in
their care
O OIten low budgets and captive patrons
O Strict cost minimization is oIten not the goal (want to exceed minimum standards to
maintain reputation)
7.3b Government Market
O Suppliers bid on contracts, lowest bidder receives contract
O igh level oI watchdog activity
O Many noneconomic criteria
4 Favor depressed Iirms and areas, small Iirms, minority-owned Iirms, avoid
discrrimination
doc_583512158.pdf