Strategic Marketing: Consumer Behavior & Industrial Markets

A group of individuals representing different areas of expertise within a company, responsible for evaluating and recommending product or service purchases.

The decision-making process in business markets involves more complex considerations than in consumer markets. These include evaluating large sums of money, intricate technical details, and the input of various stakeholders.

The decision-making process in business markets involves a more formalized approach compared to consumers. This includes detailed product specifications, written purchase orders, and supplier approval procedures.

In business-to-business (B2B) relationships, the buyer and seller are heavily reliant on each other. This often involves customized solutions, collaborative problem-solving, and ongoing support.

In B2B, the buyer and seller need to work closely together. This is unlike B2C where there is more distance between the parties.

The business buying process begins when someone within a company recognizes a problem or need that can be addressed by acquiring a product or service.

After recognizing the need, the buying organization writes down the features and quantities required in a document. This involves consulting with different departments like production and accounting.

The buying organization carefully details the specifications of the desired product or service, often involving value analysis to ensure they get the best value

A market made up of organizations that purchase goods and services to use in their own production processes, resell, or rent to others for profit.

Demand in business markets is derived from the demand for consumer products. When consumers want more cars, car manufacturers need more tires.

A business market usually has fewer, but much larger buyers compared to consumer markets. Think of a huge car company buying millions of tires compared to individual car owners.

Demand in business markets is less sensitive to price changes, especially in the short term. Even if the price of rubber drops, Michelin's demand for it might not change much.

Demand in business markets can be influenced by changes in consumer spending, which can fluctuate dramatically. A 10% increase in consumer demand for a product might lead to a 50% increase in demand for its components in the business market.

Decisions within business markets usually involve more people and require more professional expertise. This is especially true for complex purchases.

Business purchases often involve a more complex decision process than consumer purchases. It's often planned and takes more steps.

The buying process in business markets is more rational and less emotional compared to consumer decisions. Focus is placed on cost-benefit analysis, vendor comparisons, and long-term sustainability.

The process of finding the right supplier that meets the company's needs. This process involves assessing multiple factors like product quality, on-time delivery, ethical behavior and technical support. The more complex the purchase, the greater the effort put into this process.

When a company buys an existing product or service with no changes. This is a quick and efficient process, the company already knows their needs and the supplier.

When a company wants to buy a product similar to a previous purchase, but with some modifications. This might involve changing the product specifications, price, delivery terms, or supplier.

When a company needs a totally new product or service, and they have to research and compare different options from different suppliers before choosing the best one. It's the most complex type of buying situation. The more the cost or risk, the more participants are involved in the decision-making process.

Part of the business buying process where the company formally requests detailed proposals from different suppliers. This helps understand the different offerings in terms of price, features, delivery times, etc.

A step in the business buying process where the company carefully evaluates different suppliers based on their strengths and weaknesses. This helps determine who's the best fit for the company's needs.

The final step in the business buying process where the company formally orders the selected products or services and defines the key details like quantity and delivery time.

Involves the buying department checking with the users within the company to understand their satisfaction with the purchased products or services. Helps assess if the purchase was successful and if future purchases from the same supplier are warranted.