Kotler 2020, 7 kap.

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Questions and Answers

Which factors heavily influence business buyers?

  • Cultural factors and social events
  • Only personal emotions
  • Environmental, organizational, interpersonal and individual factors (correct)
  • Technological changes only

How do great salespeople impact business buying?

  • They have a minimal effect on sales volume.
  • They can increase sales volume and customer satisfaction. (correct)
  • They primarily focus on economic factors.
  • They usually lower the prices significantly.

In situations where competing products are very similar, business buyers tend to:

  • Consult industry experts before making a decision.
  • Be heavily influenced by personal factors. (correct)
  • Rely solely on brand reputation.
  • Only consider economic factors.

What environmental factor can lead business buyers to hold larger inventories?

<p>Current and expected economic conditions. (A)</p> Signup and view all the answers

Which of the following is NOT a category of influence on business buyers?

<p>Societal factors (A)</p> Signup and view all the answers

What role does emotional response play in business buying decisions?

<p>It is equally as important as rational factors. (D)</p> Signup and view all the answers

What influences the decision-making process of business buyers in terms of supply?

<p>Availability of resources and supply shortages. (A)</p> Signup and view all the answers

How does organizational structure affect business buying decisions?

<p>It influences the number of people involved in the buying decision. (B)</p> Signup and view all the answers

What is the primary goal of supplier development?

<p>To systematically develop networks of supplier-partners (B)</p> Signup and view all the answers

What are the consequences of focusing on products that do not require cooperation with suppliers?

<p>Possible return to transaction marketing (C)</p> Signup and view all the answers

Which factor is NOT part of the business buying decision process?

<p>Product replacement options (D)</p> Signup and view all the answers

What role do internal and external factors play in the buying decision process?

<p>They influence the buying centre and decision process (D)</p> Signup and view all the answers

What is the primary concern for companies when balancing costs and quality?

<p>Pressure from shareholders (A)</p> Signup and view all the answers

What is a key component of understanding business buyer behavior according to the provided model?

<p>Recognizing the buying center dynamics (A)</p> Signup and view all the answers

What does the model suggest about the stimuli affecting buyer responses?

<p>They can produce specific buyer responses within organizations (A)</p> Signup and view all the answers

Which of the following questions is NOT suggested by the model of business buyer behavior?

<p>What are the best marketing strategies for competition? (D)</p> Signup and view all the answers

What is the primary advantage of systems selling in a business buying situation?

<p>It simplifies the purchasing process by providing a complete solution. (B)</p> Signup and view all the answers

Who are considered users in the buying centre of an organization?

<p>Members of the organization who will utilize the product or service. (C)</p> Signup and view all the answers

Which role in the buying centre is primarily responsible for helping define specifications?

<p>Influencers (C)</p> Signup and view all the answers

What could be a potential risk when choosing new suppliers over established ones like Scania?

<p>Uncertainty regarding product reliability and quality. (B)</p> Signup and view all the answers

What is a possible disadvantage of opting for the cheapest offer in procurement?

<p>It can jeopardize the company's reputation and quality assurance. (A)</p> Signup and view all the answers

In the business buying process, what role does the decision-making unit play?

<p>They encompass all individuals involved in the purchase decision. (D)</p> Signup and view all the answers

What is a significant reason businesses prefer to buy a complete solution from a single seller?

<p>To ensure all aspects of the problem are considered. (A)</p> Signup and view all the answers

Why might approaching users rather than the formal buying unit be beneficial?

<p>Users can help influence the buying decision in favor of the seller. (C)</p> Signup and view all the answers

Who are the likely formal participants involved in the purchase of a corporate jet?

<p>CEO, board of directors, chief pilot, purchasing agent (A)</p> Signup and view all the answers

What is a potential downside of a corporate jet in terms of organizational practices?

<p>It could reinforce a culture of extensive travel rather than rethinking communication. (A)</p> Signup and view all the answers

Which factor is suggested to strongly influence business buyers' decisions?

<p>Economic factors like price and service (A)</p> Signup and view all the answers

How can informal participants affect the buying decision?

<p>They may influence decisions through personal connections and interest. (B)</p> Signup and view all the answers

What common misconception do experts have regarding product recommendations?

<p>Recommendations may be for products that exceed what the buyer requires. (B)</p> Signup and view all the answers

What is often assumed about the nature of business buying decisions?

<p>They are considered to be a rational process based on reason. (C)</p> Signup and view all the answers

What role does the purchasing agent typically have in the buying center?

<p>To execute the procurement process based on formal decisions. (C)</p> Signup and view all the answers

Why might a board member's informal influence on a buying decision be problematic?

<p>Their influence may not align with the organization's best interests. (C)</p> Signup and view all the answers

What is often a challenge when evaluating interpersonal factors in the buying centre?

<p>They are difficult to assess without internal information. (A)</p> Signup and view all the answers

Which of the following best describes a formal decision-maker's potential frustration?

<p>They might disregard unsolicited marketing attempts. (A)</p> Signup and view all the answers

What impact do individual factors have on the buying decision process?

<p>They influence each participant's motives and preferences. (A)</p> Signup and view all the answers

Which participant in the buying centre might have significant influence without being a formal decision-maker?

<p>A technical expert familiar with products. (B)</p> Signup and view all the answers

How do buyers with different buying styles approach decision-making?

<p>Some may conduct thorough analyses while others negotiate intuitively. (A)</p> Signup and view all the answers

What do business marketers need to understand to effectively engage with the buying centre?

<p>The formal and informal dynamics affecting decisions. (C)</p> Signup and view all the answers

What is a potential influence that a participant in the buying centre may have?

<p>Expertise in different product markets. (C)</p> Signup and view all the answers

In the business buying process, how many stages do buyers typically follow for new, complex buying decisions?

<p>Eight stages (D)</p> Signup and view all the answers

What primarily characterizes business markets compared to consumer markets?

<p>Fewer, larger buyers who are geographically concentrated (A)</p> Signup and view all the answers

What is the first stage in the business buying decision process?

<p>Problem recognition (C)</p> Signup and view all the answers

Which of the following is a type of buying situation in business markets?

<p>Straight re-buy (C)</p> Signup and view all the answers

What is a significant factor in the institutional market?

<p>Captive patrons (C)</p> Signup and view all the answers

What role does the buying centre play in business buying decisions?

<p>It consists of individuals from various departments (D)</p> Signup and view all the answers

Which of the following best describes derived demand in business markets?

<p>Demand that is based on the demand for another product (D)</p> Signup and view all the answers

How does the business buying decision process differ for buyers in new-task situations compared to others?

<p>They always go through all stages of the process (B)</p> Signup and view all the answers

What kind of governments are included in the governmental market?

<p>Regional and local government units (B)</p> Signup and view all the answers

Flashcards

Supplier Development

A strategic approach where businesses work closely with their suppliers to ensure a consistent and reliable supply of high-quality materials and products.

Business Buying

The process of purchasing products or services for use in business activities.

Buying Centre

All the individuals who participate in the decision-making process of a business purchase.

Business Buying Decision Process

The series of steps involved in making a purchase, from identifying a need to selecting a supplier.

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Internal Organizational Factors

Factors within the company that influence buying decisions, such as financial constraints, organizational structure, or technology.

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Interpersonal Factors

Factors related to the relationships and interactions between individuals within the buying center, such as power dynamics or personal relationships.

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Individual Factors

Factors related to the individual characteristics and preferences of the people involved in the buying decision, such as their expertise, experience, or risk tolerance.

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External Environmental Factors

Factors outside the company that influence buying decisions, such as economic conditions, technological advancements, or competitive landscape.

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New-task buying situation

A business purchasing scenario where the buyer acquires a product or service for the very first time.

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Systems selling (or solutions selling)

A strategy where a seller offers a complete solution to a customer's problem, encompassing all related products and services, instead of selling individual components.

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Users (in a buying centre)

Members of the buying organization who will directly use the product or service being purchased.

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Influencers (in a buying centre)

Individuals within the buying centre who provide expertise and recommendations about the purchase, influencing the final decision.

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Approaching users (sales strategy)

A sales approach targeting users directly, rather than focusing solely on the official purchase decision-makers.

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What is a buying center?

The group of individuals within an organization who are involved in the decision-making process for business purchases. This includes both formal and informal participants.

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How are buying center participants influential?

The decision-making process in business buying often involves complex interactions between individuals with varying levels of influence. This group is dynamic and can shift during the buying process.

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Why should marketers study business buying influences?

Understanding the factors influencing business buying decisions can help marketers target their strategies effectively.

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What's a common assumption about business buying?

Economic factors, such as price, product quality, and service levels, are often considered primary influences on business buyers. Marketers often emphasize these aspects to appeal to businesses.

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Is business buying solely driven by economic logic?

The idea that business buying is solely driven by rational economic factors may not be entirely accurate. Other factors, such as relationships and individual preferences, also play a role.

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What's the risk of expert recommendations in business buying?

The tendency of experts to recommend higher-priced products, potentially exceeding a user's actual needs, requires marketers to be aware of this dynamic.

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How is sustainability influencing business buying?

Sustainability considerations are becoming increasingly important in business buying decisions. Companies are evaluating the environmental and social impact of their purchases.

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What's the key takeaway for marketers?

Marketers need to understand the various influences on business buyers to develop effective strategies that address these factors. This includes economic considerations, relationships, individual preferences, and sustainability factors.

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Environmental Factors

Factors that influence business buyers stemming from the overall economic environment, such as the level of demand, economic forecasts, and the cost of borrowing money.

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Organizational Factors

Factors within a company itself that guide buying decisions, such as its goals, procedures, organizational structure, and established systems.

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What is the business market?

The market where organizations buy goods and services to use in the production of other products or services, or to resell or rent for profit.

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What is derived demand?

Derived demand means that the demand for business products ultimately depends on the demand for consumer products.

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Why are business buying decisions more complex?

Decisions in a business market often involve more people and more professional buyers, as more specialized knowledge is needed to make informed choices.

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What is a straight re-buy?

This refers to situations where businesses are buying the same product from the same supplier, with little or no changes.

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What is the buying center?

The buying center is the group of individuals within a company who are involved in making purchasing decisions, each with their own roles and influence.

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Why is it important to understand buying center participants?

Understanding the buying center's evaluation criteria, such as price, quality, and delivery time, is crucial for business marketers to tailor their offerings.

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What is the institutional market?

This market includes schools, hospitals, and prisons, which provide goods and services to people in their care.

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What is the governmental market?

This market consists of government units at all levels, purchasing goods and services to operate the government.

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Systems Selling

Instead of selling individual products, a seller offers a complete solution to a customer's problem, including all necessary products and services.

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Study Notes

Chapter 7 - Business Markets and Business Buyer Behaviour

  • Mini Contents:
    • Company case -IBM: the world's most valuable business-to-business brand
    • Business markets
    • Best practice – IKEA: involving suppliers from start to finish
    • Company case - STIGA: marketing in industrial markets
    • Business buyer behaviour
    • The business buyer decision process
    • Business-to-business digital and social media marketing
    • E-procurement
    • Institutional and governmental markets
    • Legislation issues

Chapter Preview

  • This chapter examines business customer buying behaviour, focusing on factors influencing purchases made for production, internal use, or resale.
  • Businesses, like consumers, require relationship-building and value creation.
  • IBM's vast business customer base accounts for a significant portion of their revenues, highlighting the importance of this market segment.

Learning Objectives

  • Define the business market and differentiate it from consumer markets.
  • Identify key factors influencing business buyer behaviour.
  • Describe the steps in the business buying decision process.
  • Compare and contrast institutional and governmental market buying decisions.

Business Markets

  • Businesses often sell to other businesses (e.g., Aria, Atlas Copco, Google, KPMG).
  • The public sector (e.g., infrastructure projects in Stockholm, Järna-Linköping) plays a crucial role in business markets.

Business Buyer Behaviour

  • Buying behaviour of organizations purchasing goods/services for internal use or resale.
  • Involves determining product/service needs, evaluating suppliers and brands, and building profitable relationships with clientele.

Business Buying Process

  • A multi-step decision process involving multiple participants.
  • The process is often more formalized than consumer buying decisions.

Market Structure and Demand

  • Business markets often deal with fewer, larger buyers (compared to consumer markets).
  • Demand is often derived from consumer demand.
  • Demand (and fluctuations) are often more volatile than in consumer markets.

Nature of the Buying Unit

  • Business purchases typically involve more participants and a more professional approach compared to consumer purchases.
  • There are clear roles (e.g., users, influencers, gatekeepers, deciders, buyers) in the business buying centre.

Major Types of Buying Situations

  • Straight Rebuy: Routine reorder without modifications.
  • Modified Rebuy: An existing product/service with some changes or a new supplier.
  • New Task: First-time purchase of a major product/service, requiring thorough research.

Participants in the Business Buying Process

  • Buying Centre: All involved in the purchase decision.
  • Users, influencers, gatekeepers, deciders, buyers are key roles within the buying centre.

Major Influences on Business Buyers

  • Environmental: Economic conditions, political factors, regulatory changes, and competitive dynamics.
  • Organizational: Objectives, policies, procedures, structure, and systems of the purchasing organization .
  • Interpersonal: Relationships, influence of individuals within the buying centre .
  • Individual: Personal factors like motives, perceptions, and preferences of individual participants.

E-procurement

  • Purchasing through online connections.
  • Offers advantages for both buyers and suppliers, including cost reduction and efficiency gains.
  • However, e-procurement can sometimes erode long-term customer relationships depending on how it's implemented.

Business-to-Business Digital and Social Media Marketing

  • Importance of using digital channels.
  • Building relationships with business customers through various digital marketing approaches.

Institutional Markets

  • Institutions like schools, hospitals, nursing homes, and prisons requiring goods and services.
  • Often characterized by constraints, such as budget limitations, and a need for high quality.

Governmental Markets

  • Government units (federal, state, and local) purchasing goods and services.
  • Political considerations, legal frameworks (e.g., public procurement acts) and transparency standards are crucial components of governmental buying decisions.

Legislation Issues

  • Government procurement regulations, such as those in the European Union, often favor domestic suppliers.
  • Procedures and compliance regulations significantly influence governmental buying practices.

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