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1. Business Markets and
Business Buyer Behavior
Chapter 6

2. 6 - 1
Learning Goals
1. Define the business market and how it
differs from consumer markets
2. Identify the major factors that influence
business buyer behavior
3. List and define the steps in the business
buying decision process
4. Compare the institutional and government
markets and explain how they make their
buying decisions

3. 6 - 2
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. 6 - 3
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. 6 - 4
 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. 6 - 5
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
Characteristics
Goal 1: Define the business market
Marketing Structure
and Demand
Nature of the
Buying Unit
Types of Decisions and
the Decision Process

7. 6 - 6
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. 6 - 7
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. 6 - 8
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. 6 - 9
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. 6 - 10
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. 6 - 11
Members of the Buying Center
Business Buyer Behavior
Users
Buyers
Influencers
Deciders
Gatekeepers
Goal 1: Define the business market

13. 6 - 12
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. 6 - 13
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. 6 - 14
Major Influences on
Business Buyers
Influence of
members in the
buying center
 Authority
 Status
 Empathy
 Persuasiveness
Key Factors
Goal 2: Identify the major factors that influence business buyer behavior
Environmental
Organizational
Interpersonal
Individual

16. 6 - 15
Major Influences on
Business Buyers
Personal characteristics of
members in the buying
center
 Age and income
 Education
 Job position
 Personality
 Risk attitudes
 Buying styles
Key Factors
Goal 2: Identify the major factors that influence business buyer behavior
Environmental
Organizational
Interpersonal
Individual

17. 6 - 16
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. 6 - 17
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. 6 - 18
 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. 6 - 19
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. 6 - 20
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. 6 - 21
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