business market

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  • 1. Business Markets and Business Buyer Behavior Chapter 6
  • 2. Learning Goals
    • Define the business market and how it differs from consumer markets
    • Identify the major factors that influence business buyer behavior
    • List and define the steps in the business buying decision process
    • Compare the institutional and government markets and explain how they make their buying decisions
  • 3. Case Study UPS
    • Customer Needs
    • Consumers need fast, friendly, low-cost package delivery
    • Business needs are more complex
      • Shipping part of complex logistics process including purchasing, inventory, order status, invoices, payments, returns
    • Services
    • Its 360,000 people and 88,000 vehicles offer ground, air, freight worldwide
    • Helps customer navigate the complexities of international shipping
    • Offers a wide range of financial services
    • Provides consulting services to improve logistics operations
  • 4. Definition
    • Business Buyer Behavior:
      • The buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others.
      • Also included are retailing and wholesaling firms that acquire goods for the purpose of reselling or renting them to others at a profit.
    Goal 1: Define the business market
  • 5.
      • Sales in the business market far exceed sales in consumer markets.
      • Business markets differ from consumer markets in many ways.
        • Marketing structure and demand
        • Nature of the buying unit
        • Types of decisions and the decision process
    Characteristics of Business Markets Goal 1: Define the business market
  • 6. Business Markets
    • Compared to consumer markets:
      • Business markets
        • have fewer but larger customers
      • Business customers
        • are more geographically concentrated
      • Demand is different
        • Demand is derived
        • Demand is price inelastic
        • Demand fluctuates more
    • Marketing Structure and Demand
    • Nature of the Buying Unit
    • Types of Decisions and the Decision Process
    Characteristics Goal 1: Define the business market
  • 7. Business Markets
    • Marketing Structure and Demand
    • Nature of the Buying Unit
    • Types of Decisions and the Decision Process
    • Compared to consumer purchases:
      • Involve more buyers in the decision process
      • More professional purchasing effort
    Characteristics Goal 1: Define the business market
  • 8. Business Markets
    • Marketing Structure and Demand
    • Nature of the Buying Unit
    • Types of Decisions and the Decision Process
    • Compared to consumer purchases
      • More complex buying decisions
      • The buying process is more formalized
      • Buyers and sellers work more closely together and build long-term relationships
    Goal 1: Define the business market Characteristics
  • 9.
    • Major Types of Buying Situations
      • Straight rebuy
        • Reordering without modification
      • Modified rebuy
        • Requires modification to prior purchase
      • New task
        • First-time purchase
    Business Buyer Behavior Goal 1: Define the business market
  • 10. Business Buyer Behavior
    • Systems Selling
      • Buying a packaged solution to a problem from a single seller.
      • Often a key marketing strategy for businesses seeking to win and hold accounts.
    Goal 1: Define the business market
  • 11. Business Buyer Behavior
    • Buying Center
      • The decision-making unit of a buying organization
      • Includes all individuals and units that participate in the decision making
    Goal 1: Define the business market
  • 12. Business Buyer Behavior
    • Users
    • Buyers
    • Influencers
    • Deciders
    Members of the Buying Center Gatekeepers Goal 1: Define the business market
  • 13. Major Influences on Business Buyers
    • Environmental
    • Organizational
    • Interpersonal
    • Individual
    • Economic trends
    • Supply conditions
    • Technological, political and competitive changes
    • Culture and customs
    Key Factors Goal 2: Identify the major factors that influence business buyer behavior
  • 14. Major Influences on Business Buyers
    • Environmental
    • Organizational
    • Interpersonal
    • Individual
    • Objectives
    • Policies
    • Procedures
    • Organizational structure
    • Systems
    Key Factors Goal 2: Identify the major factors that influence business buyer behavior
  • 15. Major Influences on Business Buyers
    • Influence of members in the buying center
      • Authority
      • Status
      • Empathy
      • Persuasiveness
    • Environmental
    • Organizational
    • Interpersonal
    • Individual
    Key Factors Goal 2: Identify the major factors that influence business buyer behavior
  • 16. Major Influences on Business Buyers
    • Personal characteristics of members in the buying center
      • Age and income
      • Education
      • Job position
      • Personality
      • Risk attitudes
      • Buying styles
    • Environmental
    • Organizational
    • Interpersonal
    • Individual
    Key Factors Goal 2: Identify the major factors that influence business buyer behavior
  • 17. Stages in the Business Buying Process
    • Stage 1: Problem Recognition
    • Stage 2: General Need Description
    • Stage 3: Product Specification
      • Value analysis helps to reduce costs
    • Stage 4: Supplier Search
      • Supplier development
    Goal 3: List and define the steps in the business buying decision process
  • 18.
    • Stage 5: Proposal Solicitation
    • Stage 6: Supplier Selection
    • Stage 7: Order-Routine Specification
      • Blanket contracts are often used for maintenance, repair and operating items.
    • Stage 8: Performance Review
    Stages in the Business Buying Process Goal 3: List and define the steps in the business buying decision process
  • 19.
      • E-procurement is growing rapidly
      • Online auctions and online trading exchanges (e-marketplaces) account for much of the online purchasing activity
      • E-procurement offers many benefits:
        • Access to new suppliers
        • Lower purchasing costs
        • Quicker order processing and delivery
    Business Buying on the Internet Goal 3: List and define the steps in the business buying decision process
  • 20.
    • Institutional Markets
      • Consist of churches, schools, prisons, hospitals, nursing homes and other institutions that provide goods and services to people in their care.
    Institutional and Government Markets Goal 4: Compare the institutional and government markets
  • 21.
    • Institutional Markets
      • Often characterized by low budgets and captive patrons.
      • Marketers may develop separate divisions and marketing mixes to service institutional markets.
    Institutional and Government Markets Goal 4: Compare the institutional and government markets
  • 22. Government Markets
    • More than 82,000 buying units in the U.S.
    • Require suppliers to submit bids and often give job to lowest bidder
    • Favor domestic suppliers
    • Much “red tape” can exist
    Goal 4: Compare the institutional and government markets