Purchase and logistics lecture 2

Question 1

Business buying process

Answer 1

is the process where
business buyers determine, which products and
services are needed to purchase and then find,
evaluate, and choose among alternative brands /
products (definition).

Question 2

Business markets (B2B) differ from consumer
markets (B2C) in:

Answer 2

– Market structure and demand
– Nature of the buying unit
– Types of decisions & the decision-making process

Question 3

Market Structure and Demand

Answer 3

• Fewer and larger buyers
• Geographic concentration
• Derived demand – It ultimately derives from the
  demand of consumer goods
  – Inelastic demand of price (= i.e. demand is not
  affected much by price changes)
  – Fluctuating demand (change more & more quickly)

Question 4

Nature of the Buying Unit of a corporation

Answer 4

● A business purchase involves five decision
participants (buying center or Decision Making
Unit /DMU) & a more professional purchasing
effort.
● Many larger companies upgrade purchasing
functions to “supply management” or “supplier
development”

Question 5

Types of Decisions & the Decision Process

Answer 5

● Business buyers usually face more complex buying
decisions
● More formalized
● Buyer and seller dependency
● Supplier development - the systematic
development of networks of supplier-partners to
ensure an appropriate and dependable supply of
products and materials that they will use in making
their own products or resell.

Question 6

Business buyer behavior refers to

Answer 6

– the buying behavior of the organizations that buy
goods and services for use in production of other
products and services that are sold, rented, or
supplied to others; for facilitating their daily
operations.
– Also included are retailing and wholesaling firms that
acquire goods to resell or rent to others for profit.

Question 7

Black box of business buying

Answer 7

Marketers (sales person) must understand what
happens within the organization to turn stimuli into
purchase responses.
● Major Types of Buying Situations
● Participants in the Business Buying Process
● Major Influences on Business Buyers
● The Business Buying Process
● E-Procurement

Question 8

Major Types of Buying Situations

Answer 8

Straight rebuy,Modified rebuy,New task,
● Systems selling involves the purchase of a packaged
solution from a single seller.
● Two-step process of selling:
● Interlocking products
● System of production, inventory control, distribution,
and other services to meet the buyer’s need for a
smooth-running operation

Question 9

Participants in the Business Buying Process

Answer 9

The buying center is all of the individuals and units
that play a role in the purchase decision-making
process:
1. Users are those that will use the product or service.
2. Influencers help define specifications and provide
information for evaluating alternatives.
3. Buyers have formal authority to select the supplier and
arrange & negotiate terms of purchase.
4. Deciders have formal or informal power to select and
approve final suppliers.
5. Gatekeepers control the flow of information and
concentrate on the process, compliance and policy.