06 - Business Markets & Behaviour Flashcards
business buyer behaviour
buying behaviour of organizations that buy goods/services for use in the production
business buying process
process by which business buyers:
- determine products + services they need
- find them
- evaluate them
- choose among alternative suppliers + brands
supplier development
development of networks of supplier-partners to ensure a dependable supply of products and materials
factors influencing supplier development
environmental - STEEPLE, competition, supply…
organizational - objectives, strategies, procedures, rules…
interpersonal - influence, authority, expertise…
individual - age, education, personality, preference…
main differences b/w consumer purchase and business purchase
market structure + demand
nature of buying unit
types of decisions & decision process involved
market structure
more complex
inelastic + fluctuating demand
- demand changes more (derived demand)
far fewer but far larger buyers
nature of buying unit
involves more:
- decision participants
- professional purchasing effort
types of decisions & decision process
complex buying decisions - technical + economic considerations
involve large sums of money
longer + more formalized
detailed product specifications, written purchase orders, careful supplier searches, and formal approval.
buyer and seller are much more dependent on each other
buying situations
straight rebuy - routine purchase
modified rebuy - requires some research
new task - requires thorough research
systems selling - packaged solution (avoids separate decisions)
participants in business buying process
users - use product/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 flow of information
buying center
individuals + units involved in the business decision-making process
stages of the business buyer decision process
problem recognition
general need description
product specification
supplier search
proposal solicitation
supplier selection
order-routine specification
performance review
advantages and disadvantages of e-procurement
\+ access to new suppliers \+ low cost \+ rapid order processing and delivery \+ increase in sales \+ information sharing
- less secure
- devalues proximity b/w buyer and supplier
institutional markets
institutions that provide goods/services to people in their care (hospitals, prisons…)
- low budget
- captive patrons
government markets
purchase/rent goods/services for carrying out the main functions of government
- affected by same 4 factors
- watched by publics
- spending decisions subject to public review = require considerable paperwork from suppliers
