5.4 Business Markets and Business Buyer Behaviour

Question 1

Definition of Business buyer behaviour.

Answer 1

Business buyer behaviour:

The buying behaviour 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.

It also includes the behaviour of retailing and wholesaling firms that acquire goods to resell or rent to others at a profit.

Question 2

Definition of The Business buying process.

Answer 2

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 suppliers and brands.

Question 3

What are B-to-B marketers?

Answer 3

Business-to-business (B-to-B) marketers must do their best to understand business markets and business buyer behaviour.

Then, like businesses that sell to final buyers, they must engage business customers and build profitable relationships with them by creating superior customer value.

Question 4

In what ways are business markets simular to consumer markets?

Answer 4

In some ways, business markets are similar to consumer markets. Both involve people who assume buying roles and make purchase decisions to satisfy needs.

Question 5

In what ways are business markets different from consumer markets?

Answer 5

The main differences are in:

• Market structure and demand
• The nature of the buying unit
• The types of decisions and the decision process involved

Question 6

What are the characteristics ot the market structure and demand for the business market?

Answer 6

• The business marketer normally deals with far fewer but far larger buyers than the consumer marketer does. Even in large business markets, a few buyers often account for most of the purchasing.
• Many business markets have inelastic and more fluctuating demand. The total demand for many business products is not much affected by price changes, especially in the short run.
• Business demand is derived demand—it ultimately derives from the demand for consumer goods.

Question 7

Definition of Derived demand.

Answer 7

Derived demand:

Business demand that ultimately comesfrom (derives from) the demand for consumer goods.

Question 8

Figure 5.6 A Model of Business Buyer Behaviour

Answer 8

Question 9

What are the two major parts of buying activity within an organization?

Answer 9

Within the organization, buying activity consists of two major parts:

The buying centre, composed of all the people involved in the buying decision

The buying decision process.

Question 10

What are 4 questions we should ask ourselves when thinking about business buyer behavior?

Answer 10

What buying decisions do business buyers make?

Who participates in the business buying process?

What are the major influences on buyers?

How do business buyers make their buying decisions?

Question 11

What are the three major types of buying situations in the buisness market?

Answer 11

• Straight rebuy
• Modified rebuy
• New task

Question 12

Definition of a Straight rebuy

Answer 12

Straight rebuy:

A business buying situation in which the buyer routinely reorders something without modifications.

To keep the business, “in” suppliers try to maintain customer engagement and product and service quality. “Out” suppliers try to find new ways to add value or exploit dissatisfaction so that the buyer will consider them.

Question 13

Definition of a Modified rebuy.

Answer 13

Modified rebuy:

A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers.

The “in” suppliers may become nervous and feel pressured to put their best foot forward to protect an account. “Out” suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business.

Question 14

Definition of a New task

Answer 14

New task:

A business buying situation in which the buyer purchases a product or service for the first time.

The new task situation is the marketer’s greatest opportunity and challenge. The marketer not only tries to reach as many key buying influences as possible but also provides help and information.

Question 15

What is Systems selling (solutions selling)?

Answer 15

Systems selling (solutions selling)Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.

Many business buyers prefer to buy a complete solution to a problem from a single seller rather than buying separate products and services from several suppliers and putting them together. The sale often goes to the firm that engages business customers deeply and provides the most complete system for meeting a customer’s needs and solving its problems.

Question 16

Definition of Buying Centre

Answer 16

Buying centre:

All the individuals and units that play a role in the purchase decision-making process.

Question 17

Who does the buying centre group include?

Answer 17

This group includes the actual users of the product or service, those who make the buying decision, those who influence the buying decision, those who do the actual buying, and those who control buying information.

Question 18

What is a major marketing challenge that presents itself within the buying centre concept?

Answer 18

The buying centre concept presents a major marketing challenge. The business marketer must learn who participates in the decision, each participant’s relative influence, and what evaluation criteria each decision participant uses. This can be difficult.

Question 19

What is an important consideration when thinking about what motivates buisness buyers?

Answer 19

Some marketers assume that the major influences are economic. They think buyers will favour the supplier who offers the lowest price or the best product or the most service. They concentrate on offering strong economic benefits to buyers.

Such economic factors are very important to most buyers, especially in a tough economy. However, business buyers actually respond to both economic and personal factors.

Far from being cold, calculating, and impersonal, business buyers are human and social as well. They react to both reason and emotion.

Today, most B-to-B marketers recognize that emotion plays an important role in business buying decisions.

Question 20

What are some various influences in buisness buyers?

Answer 20

Environmental, organizational, interpersonal, and individual.

Question 21

What is “Economic environment” are what are the different parts of it?

Answer 21

Business buyers are heavily influenced by factors in the current and expected economic environment, such as the:

Level of primary demand
The economic outlook
The cost of money

Question 22

Figure 5.7 Major Influences on Business Buyer Behaviour

Answer 22

Question 23

What are Organizational factors that can inflence buisness buyer behavior?

Answer 23

Organizational factors are also important. Each buying organization has its own objectives, strategies, structure, systems, and procedures

How many people are involved in the buying decision?
Who are they?
What are their evaluative criteria?
What are the company’s policies and limits on its buyers?

Question 24

What makes the interpersonal factors that can influence buisness buyers so difficult to manage?

Answer 24

The buying centre usually includes many participants who influence each other, so interpersonal factors also influence the business buying process.

However, it is often difficult to assess such interpersonal factors and group dynamics. Buying centre participants do not wear tags that label them as “key decision maker” or “not influential.”

Nor do buying centre participants with the highest rank always have the most influence. Participants may influence the buying decision because they control rewards and punishments, are well liked, have special expertise, or have a special relationship with other important participants.

Question 25

What are individual factors that may influence buisness buyer bahavior? What characteristics does this include?

Answer 25

Each participant in the business buying decision process brings in personal motives, perceptions, and preferences.

These individual factors are affected by personal characteristics such as age, income, education, professional identification, personality, and attitude toward risk.