chapter 6 Flashcards
business markets and business buyer behavior B2B
Business buyer behavior
refers to the buying behavior of
the organizations that buy goods and services for use in
the production of other products and services that are sold,
rented, or supplied to others.
The business buying process
is the process where
business buyers determine which products and services
are needed to purchase, and then find, evaluate, and
choose among alternative brands.
The Business Market-
businesses that
buy goods/services to use in the production
of other products/services that are sold,
rented, or supplied to others.
Business Markets (1 of 3)
Market Structure and Demand
⚫ Derived demand
⚫ Inelastic demand
⚫ Fluctuating demand– tends to change more and more
quickly
⚫ More complex decisions
Business Markets (3 of 3)
Types of Decisions and the Decision Process
supplier development
Business buyers usually face more complex buying
decisions than consumer buyers.
Supplier development is the 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.
Major Types of Buying Situations
1- Straight rebuy
2- Modified rebuy
3- New task
[Major Types of Buying Situations]
STRAIGHT REBUY
A business buying situation in which the buyer routinely reorders something without modifications.
⚫ Small Decision making units: usually one
person
⚫ Purchase same product as before
⚫Low perceived risk
⚫Routine / automated
⚫ “In” suppliers need to keep customers
happy, “Out” suppliers seek out
dissatisfied customers
[Major Types of Buying Situations]
MODIFIED REBUY
A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers.
⚫ Customer wants some change: Intention
to modify specifications, prices,
terms, suppliers, etc.
⚫More participants than straight rebuy
⚫A “mini” or “aging” version of new task
⚫ Window of opportunity for “Out” suppliers
[Major Types of Buying Situations]
NEW TASK
New task
A business buying situation in which the buyer purchases a product or service for the first time.
⚫ Lots of decisions: product, suppliers,
payment terms, delivery times etc.
⚫ Big DMU - depending on cost and risk
⚫ Many people involved
⚫ Slower process
⚫ Customer will gather and weigh lots of
information
⚫ Anyone can win
⚫Performance matters a lot (not just price)
[Major Types of Buying Situations]
system selling
Systems selling is buying a complete solution to a problem from a single
seller.
Solutions selling: UPS not only delivers packages for online retailer
Overstock.com, it also manages much of Overstock’s complex order
and returns process in an efficient, customer-pleasing way.
Participants in the Business Buying Process
buying center
Buying center
All the individuals and units that play a role in the purchase decision-making process.
Participants in the Business Buying Process
Users
Users
Members of the buying organization who will actually use the purchased product or service.
Participants in the Business Buying Process
Influencers
Influencers
People in an organization’s buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives.
Participants in the Business Buying Process
Buyers
Buyers
People in an organization’s buying center who make an actual purchase.
Participants in the Business Buying Process
Deciders
Deciders
People in an organization’s buying center who have formal or informal power to select or approve the final suppliers.
Participants in the Business Buying Process
Gatekeepers
Gatekeepers
People in an organization’s buying center who control the flow of information to others.
1- General need description
The stage in the business buying process in which a buyer describes
the general characteristics and quantity of a needed item.
2- Product specification
The stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for
a needed item.
3- Supplier search
The stage of the business buying process in which the buyer tries to find the best vendors.
4- Proposal solicitation
The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.
5- Supplier selection
The stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers.
6- Order-routine specification
The stage of the business buying process in which the buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties.
7- Performance review
The stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement.
general need description
describes the characteristics
and quantity of the needed item
Value analysis
is an approach to cost reduction where
components are studied to determine if they can be redesigned, standardized, or made with less costly methods of production.
problem recognition
⚫Problem recognition occurs when
someone in the company recognizes
a problem or need.
⚫ Internal stimuli - Need for new
product or production equipment
⚫ External stimuli - Idea from a trade
show or advertising
Institutional markets
consist of schools, hospitals,
nursing homes, and prisons that provide goods and
services to people in their care.
* Characteristics
Low budgets
Captive patrons
Government markets
tend to favor domestic suppliers, require them to submit bids, and normally award the contract to the lowest bidder.
* Affected by environmental factors
* Non-economic factors considered
Minority firms
Depressed firms
Small businesses
