chapter 6 Flashcards
define business buyer behavior
- buying behavior of organizations that buy goods/services to use in production of other products/services
define the business buyer process
process where business buyers determine which products/services are needed to purchase, (find, evaluate, choose among alternative brands)
differences between business markets and consumer markets
- market structure
- demand
- nature of the buying unit
- types of decisions
- decision process
explain the differeces between buisness markets and consumer markets
Business markets (demand &market stucture)
1. fewer but larger buyers
2. derived demand–> ad campaigns to promote final product
3. inelastic demand–> demand is not affected much by price changes
4. fluctuating demand
Nature of the buying unit
5. more decision participants
6. more professional purchasing effort
7. more buyer & seller interaction
explain the buisness buyer decision process
- more complex buying decision’s than consumers buyers
- longer & more formalized
- buyer and seller are more dependent on each other
define supplier development
- systematic development of networks of suppliers-partners to ensure an appropriate and dependable supply of products to use in making products/reselling.
factors influencing business buyer behavior
- THE ENVIRONMENT–>
–> marketing stimuli: product, price, place, promotion
–> other stimuli: economic, technological, political, cultural, competittive - These enviromental factors, interpersonal, individual factors affect THE BUYING CENTER &BUYING DECISION PROCESS
Major types of buying situations
- straight rebuy: reorders something without modification
- modified rebuy: modify product
- new task–> buyer purchases a product/service for first time
- systems selling–> buying a complete solution to a problem from single seller
- solutions selling
participants in the business buying process
- users people in org using product
- influencers: evaluate alternatives, help define specifications
- buyers: select supplier+arrange purchase
- deciders:
- gatekeepers: control flow of info to others
define buying center
consists of all the individuals and units that play a role in
the business purchase decision-making process
The major influences on buisness buying behavior
- environmental: economy, supply conditions , tech, competition, politics
- organizational: objectives, strategies, structure, systems and procedures
- interpersonal: influence, expertise, authority, dynamics
- individual: age/education, job position, personality, income
List the steps in the buisness buying decision process
- problem recognition
- general need description
- product specification
- supplier search
- proposal solicitation
- supplier selection
- order-routine specification
- performance review
describe product recognition
- someone in company recognizes a problem/need
–> internal
–> external stimuli
describe general need description
describes the characteristics and quantity of the needed
item.
describe product specification
describes the technical criteria.
describe supplier search
list of qualified suppliers to find the best
vendors.
describe Order-routine specifications
final order with the chosen supplier
and lists all of the specifications and terms of the purchase
describe performance review
involves a critique of supplier performance to the order-
routine specifications.
Advantages and disadvanatges of online purchasing
adv:
1. new suppliers
2. low costs
3. improves sales
dsv:
1. erodes relationships as buyers search for new suppliers
define institutional markets
- schools, hospitals, nursing homes, prisons providing goods/services to people in their care.
- have low budgets
define goverment markets
- favor domestic suppliers, have to sumbit bids, award comntract to lowest bidder.
- affected by enviromental factors
- non-economic factors considered.
