Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Analyzing Business Markets and Buyer Behavior

8,441 views

Published on

Analyzing Business Markets and Buyer Behavior

Published in: Business, Technology

Analyzing Business Markets and Buyer Behavior

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

×