Chapter Six: Business Markets and Business Buying Behavior PDF

Chapter Six Business Markets and Business Buying Behavior  Business Markets Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in production of other products and services that are sold, rented, or supplied to others. Bus...

Chapter Six Business Markets and Business Buying Behavior  Business Markets Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in production of other products and services that are sold, rented, or supplied to others. Business buying process is the process where business buyers determine which products and services are needed to purchase, and then find, evaluate, and choose among alternative brands  Business Markets Market Structure and Demand Fewer and larger buyers Derived demand Inelastic demand  Business Markets-Decision Process ► More complex ► More decision participants ► More professional purchasing effort ► Buyer and seller more dependent  Business Markets Decision Process Supplier development is the systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials that companies will use in making their own products or reselling to others Business Buyer Behavior The Model of Business Buyer Behavior  Business Buyer Behavior Major Types of Buying Situations Straight rebuy is a routine purchase decision such as reorder without any modification Modified rebuy is a purchase decision that requires some research where the buyer wants to modify the product specification, price, terms, or suppliers New task is a purchase decision that requires thorough research such as a new product Systems selling involves the purchase of a packaged solution from a single seller  Business Buyer Behavior Participants in the Business Buying Process Buying center is all of the individuals and units that participate in the business decision-making process: ⚫ Users ⚫ Influencers ⚫ Deciders ⚫ Purchasers ⚫ Gatekeepers  Business Buyer Behavior Participants in the Business Buying Process Users are those that will use the product or service Influencers help define specifications and provide information for evaluating alternatives Buyers have formal authority to select the supplier and arrange terms of purchase Deciders have formal or informal power to select and approve final suppliers Gatekeepers control the flow of information Business Buyer Behavior The Model of Business Buyer Behavior Business Buyer Behavior The Buying Process  Business Buyer Behavior The Buying Process Problem recognition occurs when someone in the company recognizes a problem or need ► Internal stimuli ► Need for new product or production equipment ► External stimuli ► Idea from a trade show or advertising  Business Buyer Behavior The Buying Process 1. General need description describes the characteristics and quantity of the needed item 2. Product specification describes the technical criteria ◦ Value analysis is an approach to cost reduction where components are studied to determine if they can be redesigned, standardized, or made with less costly methods of production 3. Supplier search involves compiling a list of qualified suppliers 4. Proposal solicitation is the process of requesting proposals from qualified suppliers  Business Buyer Behavior The Buying Process 5. Supplier selection is the process when the buying center creates a list of desired supplier attributes and negotiates with preferred suppliers for favorable terms and conditions 6. Order-routine specifications is the final order with the chosen supplier and lists all of the specifications and terms of the purchase 7. Performance review involves a critique of supplier performance to the purchase terms Thank you