Chapter 6 Business Buyer Behavior Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in production of other products and services that are sold rented or supplied to others Business Buying Process decision process by which business buyers determine which products and services their organization needs to purchase and then find evaluate and choose among alternative suppliers and brands Business Markets The main difference between business and consumer markets Market Structure and demand Far fewer but far larger buyers Derived demand demand that ultimately comes from the demand for consumer goods Inelastic and more fluctuant demand Nature of the buying unit More decision makers More professional purchasing effort Types of decisions and decision process involved More complex Buyer and seller in B2B are much more dependent on each other Longer and more formalized buying process Supplier development systematic development of networks of supplier partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others Lecture 3 Key Differences in B2B Marketing vs B2C 1 Number of customers B2C firms may have 100 to 1 000 times as many customers for similar amount of revenue 2 Multiple levels within a B2B customer One consumer going to store to buy coke vs 3 levels usually involved in B2B users influencers and decision makers 3 Domain Knowledge B2B buyer has expertise and experience that most consumers don t have Business Markets Decision Process Other Differences More complex longer and more formalized More professional purchasing effort Buyer and seller more dependent Business Buyer Behavior Major Types of Buying Situations Straight Rebuy routinely orders something without modification Modified Rebuy buyer wants to modify product specifications prices terms or suppliers New task purchase product for first time Systems Selling Solutions selling buying a packaged solution to a single seller thus avoiding all the separate decisions involved in a complex buying situation Participants in the Business Buying Process Business Buyer Behavior Buying center is all of the individuals and units that participate in the business decision making process The buying center is not a fixed and formally identified nit within the buying organization It is a set of buying roles assumed by different people for different purchases Buying center provides a major challenge Who participates in the process Their relative authority What evaluation criteria each participant uses Informal participants Users are those that will use the product or service Influencers help define specifications and provide information for evaluating alternatives Buyers have formal authority to select the supplier and arrange terms of purchase Deciders have formal or informal power to select and approve final suppliers Gatekeepers control the flow of information Major Influences on Business Buyers Economic Environment Supply Cultures and customs Organizational factors Interpersonal factors The Business Buying Process Decision Process Problem Recognition General Need Description Product Specification Product value analysis Supplier Search Proposal solicitation Supplier selection Order routine specification Vendor managed inventory Performance Review Manage the total customer relationship E Procurement Buying on the Internet Purchasing through electronic connections between buyer and seller usually online Reverse auctions Company buying sites Extranet links Institutional and Government Markets Institutional markets schools hospitals nursing homes prisons and other institutions that provide Government market Federal state and local governments that purchase or rent goods or services for goods and services to people in their care carrying out the main function of the government Carefully watched by outside publics
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