Business buying behavior involves organizations purchasing goods and services for use in production or resale. The business buying process includes determining needs, finding suppliers, evaluating options, and selecting providers. It is more formalized than consumer buying. Business markets have fewer but larger buyers concentrated geographically. Demand depends on final consumers and is less sensitive to price. Decisions are complex with long-term supplier relationships. Purchases include routine reorders, modified reorders, new products, and complete solutions. The business buying process involves recognizing needs, describing requirements, specifying products, searching for suppliers, soliciting proposals, selecting suppliers, and reviewing performance. Multiple departments and roles influence decisions. Environmental, organizational, interpersonal, and

1. BUSINESS
MARKETS

2. Business buyer behavior
• The buying behavior of the organizations that
buy goods and services for use in the production
of other products and services or for the purpose
of reselling or renting them to others at a profit
• Business buying process
– The decision process by which business buyers
determine which products and services their
organizations need to purchase, and then find,
evaluate, and choose among alternative supplier and
brands

3. Characteristics of business markets
• Marketing structure and demand
– Contain fewer but larger buyers
– Concentrated more geographically
– Derived from final consumer demand
– More inelastic (not effected as much in the short run by price
changes
– Demand fluctuates more and more quickly
• Nature of the buying unit
– Involve more buyers
– Involve a more professional purchasing effort
• Types of decisions and the decision process
– Face more complex buying decisions
– More formalized
– Close and long-run relations

4. Major types of buying situations
• Straight rebuy
– A business buying situation in which the buyer routinely reorders
something without any modifications
• Modified rebuy
– A business buying situation in which the buyer wants to modify
product specifications, prices,terms, or suppliers
• New task
– A business buying situation in which the buyer purchases a product or
service for the first time
• Systems selling
– Buying a packaged solution to a problem from a single seller, thus
avoiding all the separate decisions involved in a complex buying
situation

5. Participants in the business buying process
• Buying center
– All the individuals and units that participate in the business-decision process
• User
– Members of the buying organization who will actually use the purchased product or
service
• Influencers
– People in an organization’s buying center who affect the buying decision; they often
help define specifications and also provide information for evaluating alternatives
• Buyers
– The people who make the actual purchase
• Deciders
– People in the organization’s buying center who have formal or informal power to
select or approve the final supplier
• Gatekeepers
– People in the organization’s buying center who control the flow of information to
others

6. Major influences on business buyers
• Environmental factors
– Economic developments, supply conditions, technological change,
political and regulatory developments, competitive developments,
culture and customes
• Organizational factors
– Objectives, policies, procedures, organizational structure, systems
• Interpersonal factors
– Authority, status, empathy, persuasiveness
• Individual factors
– Age, education, job position, personality, risk attitudes
• Buyers

7. The business buying process
Problem
recognition
General need
description
Product
specification
Supplier
search
Performance
review
Order-routine
specification
Supplier
selection
Proposal
solicitation

8. The business buying process
• Problem recognition
– Someone in the company recognizes a
problem or need that can be met by
acquiring a good or a service
• General need description
– The company describes the general
characteristics and quantity of a
needed item
• Product specification
– The buying organization decides on
and specifies the best technical
product charactersitics for a needed
item
– Value analysis
• Compenents are studied carefully to
determine if they can be redesigned,
standardized, or made by less costly
methods of production
• Supplier search
– The buyer tries to find the best
vendors
• Proposal solicitation
– The buyer invites qualified suppliers
to submit proposals
• Supplier selection
– The buyer reviews proposals and
selects a supplier or suppliers
• Order-routine specification
– The buyer writes the final order with
the chosen supplier, listing the
technical specifications, quantity
needed, expected time of delivery,
return policies, and warranties
• Performance review
– The buyer rate its satisfaction with
suppliers, deciding whether to
continue, modify, or drop them