Chapter 6: Business Markets and Business Buyer Behaviour Flashcards
How does the business market differ from the consumer market?
Scale. Multilayer large businesses transactions between a variety of stakeholder firms. Multi set of business purchases for a single consumer product purchase.
The business market is larger scale than the consumer market with multiple layers of transactions with multiple suppliers that comprise of the differing ingredients of the final consumer purchase.
The consumer market is the final purchase in a products lifecycle, where the product exchanges form business to consumer, whereas the business market typically deals with the components of a final product.
The business market deals with derived demand, this means that minor fluctuations in consumer demand can result in major fluctuations in the business market.
Finally, the decision-making process in the business market is more complex with differing stakeholders needing to approve purchases, having influence in the purchasing decision. For example, a senior tech specialist may approve of a purchase from a technical aspect, whereas a chief finance officer may wish to defer a purchase to the next financial year due to budgeting purposes. Furthermore, a CEO may review the purchase through the lens of the company’s values, reviewing the purchase from an ethical standpoint for the company
What are the factors that influence business buyer behaviour?
Buying situation:
- Straight rebuys, modified rebuys, and new tasks.
The decision-making unit of a buying centre: - The decision-making process in the business market is more complex with differing stakeholders having influence in the purchasing decision. For example, a senior tech specialist may approve of a purchase from a technical aspect, while a chief finance officer may wish to defer a purchase to the next financial year due to budgeting purposes. Furthermore, a CEO may review the purchase through the lens of the company’s values, reviewing the purchase from the ethical standpoint of the company.
The Business Marketer needs to aware of the environmental, organizational, interpersonal, and individual influences on the business buying decision
List and define the steps in the business buying decision process?
Problem Recognition - General Need Description - Product Specification - Supplier Search, Proposal Solicitation, Supplier Selection, Order-Routine Specification, Performance Review.
How as the introduction of online mobile and social media changed B2B marketing?
It has resulted in e-procurement where commerce is typically happening online. In addition, the internet has given buyers access to a global catalogue of products and services enabling experienced buyers to shop globally for the best prices and highest quality, this has resulted in increased competition and greater pressure on suppliers to deliver quality services at great prices. Also, the internet has allowed organisations to stay connected to customers to inspire loyalty and enhanced customer relationships which should ultimately result in great customer lifecycles of purchases.
What is the difference between the institutional and government markets and how do they make their buying decisions?
The institutional market consists of school’s hospitals prisons care homes and other institutions that provide goods and services to individuals in their care.
Whereas the government market purchases goods and services to for publics needs such as defence, education, welfare and other public needs.
Government buyers are highly regulated due to interest of the general public and the public office in the spending of taxpayers’ dollars. Consequently, they are heavily “red taped” and typically require strict processes, a plethora of documentation with more forms and signatures. Also, consolidating the purchase is typically slower and deliberate.
Define solutions selling
Solution selling is where the entire solution to a issue or problem is sold to the business or consumer, as opposed to selling products and services that deal with the components of the main issue
What’s the difference in business strategy in a straight rebuy versus a modified rebuy?
The main attributes for straight buy are:
Speed of purchase, this would typically be a resale of a previously used solution or product. Straight buy would require little to no modification on price or implementation, therefore, be quick and familiar. Straight-buying by a business would, allow other resources to be allocated in other areas.
Modified rebuy would give opportunities to both buyer and seller. The seller would have the opportunity to upsell and increase volume of units or offer additional goods and services to the same client. thereby, increasing the overall value of the account. Whereas the buyer would have the opportunity to haggle for reduced rates on bigger purchases or request reward for continued business.
