Understanding Business Markets and Buying Behaviour

Question 1

Business vs Consumer Markets (3)

Answer 1

1. Motivation of Buyer (production, operations, resale)
2. Demographics of the market
3. Purchasing process and relationships between buyer and seller

Question 2

B2B Demand Characteristics (4)

Answer 2

1. Derived from demand for consumer goods and services
2. Relatively inelastic
3. More erratic - consumer demand can affect demand for fixed assets
4. More cyclical

Question 3

B2B Market Demographics (3)

Answer 3

1. Fewer in number
2. Larger
3. Geographically concentrated

Question 4

B2B Buyer/Seller Relationships (4)

Answer 4

1. Professional buyer specialists following prescribed procedures
2. Closer buyer/seller relationships
3. Presence of multiple buying influences
4. More apt to buy on specifications

Question 5

Participants in the Business Purchasing Decision Making Process

Answer 5

Users
Influencers
Gatekeepers
Buyers
Deciders

Question 6

Types of Buying Situations

Answer 6

straight rebuy
modified rebuy
new task buying

Question 7

Purchase Decision Making Process (5)

Answer 7

1. Recognition of a problem or need
2. Search for information about products and suppliers
3. Evaluation and selection of suppliers (vendor analysis)
4. Purchase decision (contract, just-in-time)
5. Post-purchase evaluation and feedback

Question 8

Recognition of Problem or Need (3)

Answer 8

1. Derived demand
2. Requirements planning
3. Determining product specifications

Question 9

Search for information about products and suppliers

Answer 9

1. Value analysis
2. Make or buy decisions
3. Information about potential suppliers

Question 10

Reciprocity

Answer 10

Favoring a supplier that can also be a customer

Question 11

Annual Requirements Contract

Answer 11

obligates a supplier to fill all of buyer’s needs for a specific product

Question 12

Logistical Alliance (3 systems)

Answer 12

1. Electronic Data Interchange (EDI)
2. Vendor Managed Inventory (VMI)
3. Radio Frequency Identification (RFID)

Question 13

B2B Categories, Characteristics, Marketing Implication of Goods and Services (6)

Answer 13

1. Raw Materials
2. Component Parts and Materials
3. Installations
4. Accessory Equipment
5. Operating Supplies
6. Business Services

Question 14

Raw Materials

Answer 14

description: unprocessd goods that become a portion of final product
characteristics: limited supply, few producers, distribution is key price critical competitive variable

Question 15

Component Parts and Materials

Answer 15

description: processed goods that become a portion of a final product
characteristics: high volume purchases, long term contracts, fierce competition among suppliers (microchips)

Question 16

Installations

Answer 16

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

Question 17

Accessory Equipment

Answer 17

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)

Question 18

Operating Supplies

Answer 18

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

Question 19

Business Services

Answer 19

description: provide special expertise to facilitate ongoing operations (law firms, mad men)
characteristics: long term relationships with customers, supplier qualifications, experience and reputation

Question 20

B2B Similar Marketing Questions

Answer 20

1. Who are our target customers?
2. What are their needs, wants, preferences?
3. How do those customers decide which suppliers to buy from?