Crafting a single paragraph of 300 words presents a unique challenge, as it requires a careful balance of detail and flow to avoid feeling like a long, run-on sentence. The key is to build a cohesive idea, with each sentence adding a new layer of information or perspective. Imagine a scene: a lone traveler stands on a windswept cliff, gazing out at the vast, churning ocean below. The sky is a dramatic canvas of bruised purples and fiery oranges, the last remnants of a sun that has already dipped below the horizon. The air, thick with the scent of salt and damp earth, bites at their exposed skin, a constant reminder of the wildness surrounding them. This person, a silhouette against the fading light, carries a story etched in the lines of their face and the tired slump of their shoulders. They aren't just looking at the sea; they are communing with it, sharing a silent understanding of its relentless power and its profound, unending mystery. The roar of the waves crashing against the rocks is not a sound of chaos but a powerful symphony, a rhythm that resonates deep within their soul. For a moment, all the noise of the world—the worries, the plans, the regrets—melts away, replaced by a singular, overwhelming sense of presence. Here, on this precipice between land and sea, between past and future, they are simply and completely in the now. It is a moment of profound solitude, yet it feels anything but lonely. The universe, in all its silent grandeur, seems to hold its breath with them, a shared witness to a quiet, personal epiphany. This simple act of observation becomes a deeply spiritual experience, a pilgrimage not to a physical place, but to a state of being where clarity and peace are the only things that matter. In the face of such raw, untamed beauty, the small anxieties of life lose their grip, and the traveler finds a temporary, but total, release.

1. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-1

2. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-2
McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 5
Business-to-Business Markets and Buying Behavior
Business-to-Business Markets and Buying Behavior

3. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-3
After studying this chapter, you
should be able to:
 Define the nature of business-to-business
buying behavior and markets.
 Explain the differences between business-
to-business buying and consumer
purchase behavior.
 Recognize the different types of buying
decisions.

4. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-4
 Define the different stages of the business
buying process.
 Describe the buying-center concept and
the determinants of influence within the
buying center.
 Understand the nature of government,
reseller, and other institutional markets.
After studying this chapter, you
should be able to:

5. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-5
The Nature of Business-to-Business
Buying
 Business-to-
Business buying
behavior:
 Refers to decision
making and other
activities of
organizations as
buyers.
 Business-to-
Business buying is
the selection of
suppliers, sources,
or vendors.

6. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-6
The Nature of Business-to-
Business Buying
 Organizations fall into
four categories:
 Business firms
 Government markets
 Reseller markets
 Institutional markets

7. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-7
Supply-Chain Management
 Supply-Chain
Management:
 “The integration of
business processes from
end user through original
suppliers that provides
products, services, and
information that add
value for customers.”

8. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-8
Supply Management
 Supply Management:
 “The identification, acquisition, access,
positioning, and management of resources
the organization needs or potentially needs
in the attainment of its strategic objectives.”

9. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-9
Characteristics of Business-to-
Business Buying Behavior
 Consumers buy for
their own use and
for household
consumption.
 Business buyers
purchase for:
 Further production
(raw materials,
components)
 Use in their firm’s
operations
 Resale to other
customers

10. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-10
Characteristics of Business-to-
Business Buying Behavior
 Derived Demand:
 Demand for business-to-business products is often
dependent on demand in consumer markets.

11. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-11
Evaluating Business-to-Business
Markets: NAICS

12. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-12
The Importance of Business-to-
Business Buying
 Two Key Reasons:
1. The size of business markets
offers many opportunities for
marketers.
2. Many firms are trying to increase
profits by improving purchasing
practices.

13. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-13
Trends in Business-to-Business
Buying
1. Electronic Commerce
2. Strategic Cost
management
3. Strategic Sourcing
4. Supply-chain partner
selection & contribution
5. Relationship
management
6. Performance
measurement
7. Global-supplier
development
8. Third-party purchasing
9. Competitive bidding
10. Strategic supplier
alliances
11. Win-win negotiation
strategy
12. Complexity management
Selected Purchasing Trends 1998-2008

14. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-14
Productivity Improvement
 Outsourcing
 Corporate downsizing
often involves downsizing
of the purchasing function
 Reducing cycle time

15. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-15
Use of Technology
 B2B Exchanges:
 Organizational buying via the Internet.
 Private Exchanges:
 Those that link invitation-only buyers
and sellers.

16. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-16
Electronic Commerce Applications
in Purchasing
 Requesting proposals and price quotes.
 Posting bids.
 Transmitting purchase orders.
 Using Electronic Data Interchanges.
 Ordering with electronic catalogs.
 Seeking suppliers.
 Tracking delivery schedules.
 Managing contracts.
 Managing inventory.
 Paying invoices/making payments.

17. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-17
A Relationship Perspective

18. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-18
Customer Value Considerations
 Buyers are interested in suppliers that can add
value to their business by:
 Continually increasing quality
 Lowering costs

19. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-19
Environmental Impact
 Buyers emphasize an Ethics
Perspective by:
 Examining the costs associated with
product disposal.
 Looking for ways to recycle or reuse
products.

20. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-20
Types of Buying Decisions
Type of Buying Newness of Information Consideration of
Decision the Problem Requirements New Alternatives
New task High Maximum Important
Modified rebuy Medium Moderate Limited
Straight rebuy Low Minimal None
The Buying Decision Grid

21. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-21
The Business Buying Process

22. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-22
The Buying Center
 Buying Center:
 Includes more than the purchasing department or the
purchasing function; it is made up of people
throughout the organization at all levels.
The makeup of the buying center
may vary as decisions change.

23. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-23
The Buying Center
 Gatekeepers:
 Control the flow of information and
communication among the buying-center
participants.
 Sponsor:
 Advocates purchase of a particular product
of service.

24. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-24
Government Markets
 Government Market:
 Includes federal, state, and local government
organizations that purchase goods and services.
 The government market is the
largest in the world, with the United
States federal government the
largest customer in this market

25. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-25
Reseller Markets
 Reseller Market:
 Made up of firms that
purchase goods and in
turn sell them to others
at a gain.
 This market includes:
 Wholesalers
 Retailers
3.5 million companies with more
than 20 million employees make
up reseller markets.

26. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-26
Other Institutional Markets
 Nonprofit organizations
must also purchase goods
and services to support their
activities.
 These organizations include:
 Educational institutions
 Public & private hospitals
 Religious & charitable organizations
 Trade associations

27. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-27
Ethical Issues
 Ethics is a constant
concern in
business-to-
business
negotiations and
transactions.
 Bribery takes many
forms:
 Gifts from vendors to
people involved in
decision making
 “Money under the table”
 Promises for the future

28. Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
1-28
Ethical Issues
Reciprocity:
When firm A purchases from supplier B who
in turn buys A’s own products and services.
Fairness, honesty, and trust should influence all
negotiations and selection of suppliers or vendors.
Firms pursuing global markets
encounter ethical dilemmas.