Business Markets

and Business
Buyer Behavior
PRINCIPLES OF MARKETING
Second Quarter
 Business buyer behavior - The buying behavior of organizations 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 - The decision process by which business buyers
determine which products and services their organizations need to
purchase and then find, evaluate, and choose among alternative suppliers
and brands.
Characteristics of Business
Markets
Market Structure and Demand
 Business markets contain fewer but larger buyers.
 Business buyer demand is derived from final consumer
demand.
 Demand in many business markets is more inelastic—not
affected as much in the short run by price changes.
 Demand in business markets fluctuates more and more
quickly.
Characteristics of Business
Markets
Nature of the Buying Unit
 Business purchases involve more buyers.
 Business buying involves a more professional purchasing
effort.
Characteristics of Business
Markets
Types of Decisions and the Decision Process
 Business buyers usually face more complex buying
decisions.
 The business buying process is more formalized.
 In business buying, buyers and sellers work more closely
together and build close long-term relationships.
 Major Type of Buying Situations

 Straight rebuy - A business buying situation in which the buyer routinely reorders
something without any modifications.
 Modified rebuy - A business buying situation in which the buyer wants to modify
product specifications, prices, terms, or suppliers.
 New task - A business buying situation in which the buyer purchases a product or
service for the first time.
 Systems selling (or solutions selling) - Buying a packaged solution to a problem
from a single seller, thus avoiding all the separate decisions involved in a complex
buying situation.
Participants in the Business
Buying Process
 Users - Members of the buying organization who will
actually use the purchased product or service.
 Influencers - People in an organization’s buying center who
affect the buying decision; they often help define
specifications and also provide information for evaluating
alternatives.
 Buyers - People in an organization’s buying center who
make an actual purchase.
 Deciders - People in an organization’s buying center who
have formal or informal power to select or approve the
final suppliers.
 Gatekeepers - People in an organization’s buying center
who control the flow of information to others.
E-Procurement: Buying on the
Internet
 E-procurement - Purchasing through electronic
connections between buyers and sellers— usually online.
Institutional and Government
Markets
 Institutional market - Schools, hospitals, nursing
homes, prisons, and other institutions that provide
goods and services to people in their care.
 Government market - Governmental units—federal,
state, and local—that purchase or rent goods and
services for carrying out the main functions of
government.