Analyzing Business Markets and Buyer Behavior
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Analyzing Business Markets and Buyer Behavior

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Analyzing Business Markets and Buyer Behavior

Analyzing Business Markets and Buyer Behavior

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Analyzing Business Markets and Buyer Behavior Analyzing Business Markets and Buyer Behavior Presentation Transcript

  • Chapter 7 Analyzing Business Markets and Buyer Behavior PowerPoint by Karen E. James Louisiana State University - Shreveport
  • Objectives
    • Understand the nature of the business market and how it differs from the consumer market.
    • Learn how institutions and government agencies buy.
    • Identify the different buying situations faced by organizational buyers.
  • Objectives
    • Identify the participants in the business buying process and the various influences impacting business buying decisions.
    • Understand how business buyers make their decisions.
  • Organizational Buying
    • Organizational buying is:
      • “the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.”
  • Organizational Buying
    • Compared to Consumer Markets, Business Markets have . . .
      • Fewer buyers
      • Larger buyers
      • Geographically concentrated buyers
      • Close relationships with their supplier-customers
  • Organizational Buying
    • Fluctuating demand
    • Derived demand
    • Inelastic demand
    • Professional purchasing
    • Multiple buying influences
    • Multiple sales calls
    • Direct purchasing
    • Reciprocity
    • Leasing
    Other Business Market Characteristics
  • Organizational Buying
    • The Business Market Includes For-Profit Companies and Two Specialized Groups:
      • The institutional market
        • Schools, hospitals, prisons, etc. with captive audiences
        • Cost and quality standards drive purchases
      • The government market
        • Bidding process awards contracts
  • Organizational Buying
    • Buying Situations
    • Straight rebuy
    • Modified rebuy
    • New task
    • Routine reorders from approved vendor list
    • Low involvement, minimal time commitment
    • Example: copier paper
  • Organizational Buying
    • Buying Situations
    • Straight rebuy
    • Modified rebuy
    • New task
    • Specifications, prices, delivery terms or other aspects require modification
    • Moderate level of involvement and time commitment
    • Example: desktop computers
  • Organizational Buying
    • Buying Situations
    • Straight rebuy
    • Modified rebuy
    • New task
    • Purchasing a product or service for the first time
    • High level of involvement and time commitment; multiple influences
    • Example: selecting a web site design firm or consultant
  • Organizational Buying
    • Systems Buying
      • A single provider provides the total package for the buyer’s needs
      • May involve turnkey solutions
    • Systems Selling
      • Manufacturers sell entire systems
      • Supplier provides all MRO items
  • Participants in Business Buying
    • Initiators
    • Users
    • Influencers
    • Deciders
    • Approvers
    • Buyers
    Buying center members fill one or more roles in the purchase decision process:
    • Gatekeepers
  • Influences on Business Buyers
    • Major Influences
    • Environmental
    • Organizational
    • Interpersonal
    • Individual
    • Demand level
    • Economic outlook
    • Interest rates
    • Technological change
    • Politics/regulations
    • Competition
    • Concerns for social responsibility
  • Influences on Business Buyers
    • Major Influences
    • Environmental
    • Organizational
    • Interpersonal
    • Individual
    • Objectives
    • Policies
    • Procedures
    • Organizational structures
    • Systems
  • Influences on Business Buyers
    • Major Influences
    • Environmental
    • Organizational
    • Interpersonal
    • Individual
    • Interests
    • Authority
    • Status
    • Empathy
    • Persuasiveness
  • Influences on Business Buyers
    • Major Influences
    • Environmental
    • Organizational
    • Interpersonal
    • Individual
    • Age
    • Income
    • Education
    • Job position
    • Personality
    • Risk attitudes
    • Culture
  • Purchasing/Procurement Process
    • Problem recognition
    • General need description
    • Product specification
    • Supplier search
    • Proposal solicitation
    • Supplier selection
    • Order-routine specification
    • Performance review
    Eight Buyphases of Industrial Buying