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Questions and Answers
What characterizes a straight rebuy in the business buying process?
What characterizes a straight rebuy in the business buying process?
Which factor increases the complexity of a new task buying situation?
Which factor increases the complexity of a new task buying situation?
Who are the influencers in the business buying process?
Who are the influencers in the business buying process?
What role do gatekeepers play in the business buying process?
What role do gatekeepers play in the business buying process?
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In many routine purchases, what is true about buyers and deciders?
In many routine purchases, what is true about buyers and deciders?
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What distinguishes business markets from consumer markets primarily?
What distinguishes business markets from consumer markets primarily?
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What is a key factor in the nature of buying units in business purchases?
What is a key factor in the nature of buying units in business purchases?
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Which of the following best describes derived demand in business markets?
Which of the following best describes derived demand in business markets?
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What type of demand is characteristic of business markets, especially in the short term?
What type of demand is characteristic of business markets, especially in the short term?
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How does the demand structure differ between business and consumer markets?
How does the demand structure differ between business and consumer markets?
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What implication does having fewer but larger buyers in business markets have on marketing strategies?
What implication does having fewer but larger buyers in business markets have on marketing strategies?
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What role does psychology play in business exchanges?
What role does psychology play in business exchanges?
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What is the typical purchasing behavior in business exchanges when prices change?
What is the typical purchasing behavior in business exchanges when prices change?
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What is the purpose of the buyer preparing a document in the general need description phase?
What is the purpose of the buyer preparing a document in the general need description phase?
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Which factor increases the effort put into supplier search?
Which factor increases the effort put into supplier search?
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What criteria is NOT typically considered when ranking suppliers in the supplier selection phase?
What criteria is NOT typically considered when ranking suppliers in the supplier selection phase?
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What document is prepared in the order-routine specification phase?
What document is prepared in the order-routine specification phase?
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What does the performance review involve?
What does the performance review involve?
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Which of the following is an example of an external stimulus for purchasing decisions?
Which of the following is an example of an external stimulus for purchasing decisions?
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What should be included in the proposal solicitation phase?
What should be included in the proposal solicitation phase?
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Why is it important to check with the accountancy department when considering a new purchase?
Why is it important to check with the accountancy department when considering a new purchase?
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What characterizes decisions in a B2B buying process compared to B2C?
What characterizes decisions in a B2B buying process compared to B2C?
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Which of the following is NOT typically included in a purchase order (PO)?
Which of the following is NOT typically included in a purchase order (PO)?
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What is one major difference in the relationship between buyers and sellers in B2B vs. B2C?
What is one major difference in the relationship between buyers and sellers in B2B vs. B2C?
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What is the first step in the business buying process?
What is the first step in the business buying process?
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Why is relationship marketing significant in the B2B context?
Why is relationship marketing significant in the B2B context?
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Which of the following accurately describes an aspect of the buying committee's role?
Which of the following accurately describes an aspect of the buying committee's role?
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In the context of B2B buying, what is meant by 'order-routine specification'?
In the context of B2B buying, what is meant by 'order-routine specification'?
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What is the primary factor that differentiates B2B buying behavior from regular consumer purchases?
What is the primary factor that differentiates B2B buying behavior from regular consumer purchases?
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Study Notes
Business Markets
- Business markets include organizations buying goods and services for use in production, or resale.
- Business exchanges differ from consumer exchanges in terms of who buys and the purpose of the purchase.
- Both business and consumer markets share similarities, such as psychological needs. However, differences exist in market structure and demand.
Similarities to Consumer Markets
- Both involve people assuming buying roles.
- Both involve needs.
- Both involve psychology and need fulfillment
Differences from Consumer Markets
- Market structure: Fewer, larger buyers in business markets. Individual consumers might purchase less.
- Demand: Business demand is often derived, meaning demand for one product triggers demand for another (e.g., tires are demanded based on car sales). Business demand is often inelastic (short term) – price changes impact product demand less than consumer markets. Also, business demand is more fluctuating.
- Buying unit: Business purchases often involve multiple people (buying committees) and more formalized procedures, compared to simpler individual consumer buying decisions.
Market Structure and Demand
- Fewer, larger buyers: Business markets have fewer, but significantly larger, buyers compared to the multitude of individual consumers.
- Geographic concentration: Businesses in certain industries cluster geographically in specific regions (e.g., luxury firms in Paris).
- Derived demand: Business demand for products is dependent on the demand for related products.
- Inelastic demand (short-term): Changes in prices of raw materials or components have less of an impact on the demand for finished goods in the short term.
- Fluctuating demand: Demand for products are often irregular in fluctuating industries (which might be impacted by fluctuations in sales, or availability challenges).
Nature of Buying Unit
- More decision participants: Business purchases usually involve more people in the decision-making process than individual consumer purchases.
- More professional purchasing effort: Purchasing decisions in business involve more careful evaluation of available options.
- More complex purchases: Complex purchasing decisions involve more participants leading to more complex purchase processes.
The Business Buying Process
- The steps in a business buying process involve problem recognition, need description, product specifications, supplier search, proposal solicitation, supplier selection, order-routine specification, and performance review.
- Suppliers are qualified, and selection is based on factors such as quality, service and price.
Types of Decisions and Specifications
- Business decisions involve complex technical and economic factors, potentially including considerations about large sums of money.
- Business purchases frequently include detailed product specifications and written purchase orders.
Participants in Business Buying Process
- Various participants influence business buying decisions, including users, influencers, buyers, decisors and gatekeepers.
Influences on Business Buyers
- Business buyers are influenced by environmental factors (economic, political), organizational factors (objectives, policies), interpersonal factors (authority, empathy), and individual factors (age, income and personality).
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Description
Explore the intricacies of business markets, including the key differences and similarities with consumer markets. Understand how demand dynamics, market structure, and psychological factors influence purchasing decisions in these two market types.
