Understanding Business Markets and Buying Behaviour Flashcards
Business vs Consumer Markets (3)
- Motivation of Buyer (production, operations, resale)
- Demographics of the market
- Purchasing process and relationships between buyer and seller
B2B Demand Characteristics (4)
- Derived from demand for consumer goods and services
- Relatively inelastic
- More erratic - consumer demand can affect demand for fixed assets
- More cyclical
B2B Market Demographics (3)
- Fewer in number
- Larger
- Geographically concentrated
B2B Buyer/Seller Relationships (4)
- Professional buyer specialists following prescribed procedures
- Closer buyer/seller relationships
- Presence of multiple buying influences
- More apt to buy on specifications
Participants in the Business Purchasing Decision Making Process
Users Influencers Gatekeepers Buyers Deciders
Types of Buying Situations
straight rebuy
modified rebuy
new task buying
Purchase Decision Making Process (5)
- Recognition of a problem or need
- Search for information about products and suppliers
- Evaluation and selection of suppliers (vendor analysis)
- Purchase decision (contract, just-in-time)
- Post-purchase evaluation and feedback
Recognition of Problem or Need (3)
- Derived demand
- Requirements planning
- Determining product specifications
Search for information about products and suppliers
- Value analysis
- Make or buy decisions
- Information about potential suppliers
Reciprocity
Favoring a supplier that can also be a customer
Annual Requirements Contract
obligates a supplier to fill all of buyer’s needs for a specific product
Logistical Alliance (3 systems)
- Electronic Data Interchange (EDI)
- Vendor Managed Inventory (VMI)
- Radio Frequency Identification (RFID)
B2B Categories, Characteristics, Marketing Implication of Goods and Services (6)
- Raw Materials
- Component Parts and Materials
- Installations
- Accessory Equipment
- Operating Supplies
- Business Services
Raw Materials
description: unprocessd goods that become a portion of final product
characteristics: limited supply, few producers, distribution is key price critical competitive variable
Component Parts and Materials
description: processed goods that become a portion of a final product
characteristics: high volume purchases, long term contracts, fierce competition among suppliers (microchips)
Installations
description: major capital goods used to produce a final product
characteristics: long lasting, involved in production of many units of the final product over several years, involve large monetary outlays
Accessory Equipment
description: finished goods that facilitate production or final product
characteristics: enduring but less so than installations, more standardized, frequently purchased and less costly than capital equipment (trucks)
Operating Supplies
description: finished goods that facilitate repair, maintenance and ongoing operations
characteristics: analogous to consumer convenience goods, frequently purchased and consumed in short time, broad market
Business Services
description: provide special expertise to facilitate ongoing operations (law firms, mad men)
characteristics: long term relationships with customers, supplier qualifications, experience and reputation
B2B Similar Marketing Questions
- Who are our target customers?
- What are their needs, wants, preferences?
- How do those customers decide which suppliers to buy from?
