chapter 6: business and buyer behavior Flashcards
business buyer behavior
buying behavior of organisations that buy goods and services for use in the production of other products and services that are sold, rented or supplied to others
business buying process
decision process by which buyers determine which products and services their organizations need to purchase and then find, evaluate and choose among alternative suppliers and brands
what is a similarity between business market and consumer markets?
both involve people who assume buying roles and make purchase decisions to satisfy needs
What is the main difference between business markets and consumer markets?
The main difference is in structure and demand, the nature of the buying unit and the types of decisions and decision process involved
Market structure and demand
- business marketer deals with fewer but larger buyers
- many business markets have inelastic and more fluctuating demand
- total demand for many business products is not much affected by changes in price
Derived demand
business demand that ultimately comes from the demand for consumer goods
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
types of marketing stimuli
the marketing mix (product, price, place and promotion)
Other main stimuli
Economic, technological, political, cultural and competitive
What does buying activity consist on
- the buying center composed by all the people involved in the buying decision
- the buying decision process
straight rebuy
the buyer routinely reorders something without modifications
Modified rebuy
buyer wants to modify product specifications, prices, terms or suppliers
new task
buyer purchases a product or service for the first time
system selling
buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation
buying center
all the individuals and units that play a role in the purchase decision-making process (users, influencers, buyers, deciders, gatekeepers)
users
members who will actually use the purchased product or service
influencers
people who affect the buying decision; often help define specifications and provide information for evaluating alternatives
buyers
people who have formal authority to select the supplier and arrange terms of purchase
Deciders
those who have formal or informal power to select or approve the final suppliers
gatekeepers
people in an organisations buying centre who control the flow of information to others
major influences on business buyers
business buyers are heavily influenced by factors in the current and expected economic environment. The business buyer must watch the factors and determine how they will affect the buyer
business buyer decision process steps
- problem recognition
- general need description
- product specification
- supplier search
- proposal solicitation
- supplier selection
- order routine specification
- performance review
problem recognition
the company recognizes a problem or need that can be met by acquiring a good or service
general need description
stage in which the buyer describes the general characteristics and quantity of a needed item
product specification
the buying organisation decides on and specifies the best technical product characteristics for a needed item
product value analysis
approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized or made by less costly methods of production
Supplier search
buyer tries to find the best vendors (buyer makes a list of qualified suppliers)
Proposal solicitation
buyer invites qualified suppliers to submit proposals
supplier selection
buyer reviews proposals and selects a supplier or suppliers
order routine specification
stage 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
vendor managed inventory
buyers turn over ordering and inventory information directly with key suppliers
performance review
the buyer assesses the performance of the supplier and decide to continue, modify or drop the arrangement
E-procurement
purchasing through electronic connections between buyers and sellers
reverse auctions
put their purchasing requests online and invite suppliers to bid for the business
trading exchanges
companies work collectively to facilitate the trading process
B-to-B digital and social media marketing
using digital and social media marketing approaches to engage business customers and manage customer relationships anywhere and anytime
institutional market
schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care
government markets
governmental units - federal, state and local which purchase or rent goods and services for carrying out the main functions of government
