Chapter 6 17042022 033010am

Chapter 6
Business Markets
and Business Buyer
Behavior
Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Learning Objectives
6-1 Define the business market and explain how business markets differ from
consumer markets.
6-2 Identify the major factors that influence business buyer behavior.
6-3 List and define the steps in the business buying decision process.
6-4 Discuss how new information technologies and online, mobile, and social media
have changed business-to-business marketing.
6-5 Compare the institutional and government markets and explain how institutional
and government buyers make their buying decisions.
Business Markets and
Buyer Behavior
• Business buyer behavior refers to the
buying behavior of the organizations that buy
goods and services for use in the production of
other products and services that are sold,
rented, or supplied to others.
• The business buying process is the
process where business buyers determine
which products and services are needed to
purchase, and then find, evaluate, and choose
among alternative brands.
Learning
Objective 1
Define the business market and
explain how business markets differ
from consumer markets.
Business Markets
1.Fewer but larger
Business structure and demand buyers
2. Derived demand
3. Inelastic demand
4. Fluctuating
demand
Business Markets
Nature of the buying unit
• Business buyers usually face more
complex buying decisions than do
consumer buyers. Compared with
consumer purchases, a business
purchase usually involves:
I. More decision participants
II. More professional purchasing effort
III. More buyer and seller interaction
Business Markets
Types of decisions and the decision process
➢ Business purchases tend to have the following characteristics.
1. Business buyers face more complex buying decisions than

consumer buyers.
2. They involve large sums of money.
3. There are complex technical and economic considerations.
4. There are interactions among people at many levels of the
buyer’s organization.
5. The process tends to be longer and more formalized.
6. They involve detailed product specifications and careful supplier
searches.
7. They involve written purchase orders and formal approval.
8. Buyer and seller are often much more dependent on each
other.
Business Markets
Decision Process
• Supplier development is the

systematic development of networks
of supplier-partners to ensure an
appropriate and dependable supply
of products and materials for use in
making products or reselling them to
others.
Learning Objective
2
Identify the major factors that influence business

buyer behavior.
Business Buyer Behavior
Modified rebuy is
Straight rebuy is a buying situation
Business a buying situation in which the buyer
in which the buyer wants to modify
Buyer Behavior routinely reorders product
something without specifications,
any modifications prices, terms, or
Major Types of suppliers.
Buying
Situations
New task is a
Systems selling
buying situation in
is buying a
which the buyer
complete solution
purchases a
to a problem from
product or service
a single seller.
for the first time.
• Buying center consists of all the individuals and units that
Business Buyer play a role in the business purchase decision-making process.
Behavior • Users
• Influencers
Participants in the Business • Deciders
Buying Process
• Purchasers
• Gatekeepers
Participants in the Business Buying Process
Users are those that will use the product or service.
Influencers help define specifications and provide information for evaluating alternatives.
Buyers have formal authority to select the supplier and arrange terms of purchase.
Deciders have formal or informal power to select and approve final suppliers.
Gatekeepers control the flow of information.
Participants in the Business Buying Process

The buying center concept presents a major marketing challenge given the varied
groups involved in the decision.
Who participates in the decision?

Relative influence on decision Evaluation criteria used by Are there Informal participants
by various participants various participants involved in decision
Business Buyer • Figure 6.2 Major Influences on Business Buying Behavior
Behavior
Major influences on Business buyers
Economic Personal
Factors Factors
Price
Emotion
Service
Major Influences on Business Buyers
1. Environmental Factors
Demand for Economic Cost of Supply of

product outlook money Materials
Technology Culture Politics Competition
2. Organizational Factors
OBJECTIVES STRATEGIES STRUCTURE SYSTEMS PROCEDURES

3. Interpersonal Factors
Influence Expertise
Authority Dynamics
4. Individual Factors
Motives Perceptions Preferences Age
Attitude
Income Education
toward risk
Learning Objective
3
List and define the steps in
the business buying decision
process.
The Business Buying Process
1. Problem recognition
occurs when someone in the
company recognizes a
problem or need that can be
met by requiring a good or a
service.
• Internal stimuli - Need for
new product or production
equipment
• External stimuli - Idea from a
The Business Buying trade show or advertising
Process
2. General need description
describes the characteristics and
quantity of the needed item.
The Business
Buying 3. Product specification
Process describes the technical criteria.
• Value analysis is an approach to cost
reduction where components are studied
to determine if they can be redesigned,
standardized, or made with less costly
methods of production.
The Business
Buying Process
4. Supplier search involves compiling a list
of qualified suppliers to find the best
vendors.
5. Proposal solicitation is the process of
requesting proposals from qualified
suppliers.
6. Supplier selection is when the buying
center creates a list of desired supplier
attributes and negotiates with preferred
suppliers for favorable terms and
conditions.
The Business Buying Process
7. Order-routine specifications
includes the final order with the 8. Performance review involves
chosen supplier and listing the a process in which buyers
technical specifications, quantity assesses the performance of the
needed, expected time of supplier and decides to continue,
delivery, return policies and modify or drop the arrangement.
warranties.
Learning Objective 4
Discuss how new information technologies and online, mobile, and
social media have changed business-to-business marketing.
E-Procurement and Online Purchasing
➢ Companies can do e-procurement in any of several
ways:
a) Reverse auctions, in which they put their purchasing
requests online and invite suppliers to bid for the
business
b) Trading exchanges, through which companies work
collectively to facilitate the trading process
c) Setting up their own company buying sites to post
buying needs, invite bids, negotiate terms, and place
orders
d) Creating extranet links with key suppliers, which are
direct procurement accounts where company buyers
can purchase equipment, materials, and supplies
directly
E-Procurement Advantages
and Online • Access to new suppliers

• Lowers costs
Purchasing • Speeds order processing and
delivery
• Enhances information sharing
• Improves sales
• Facilitates service and support
Disadvantages
• Erodes relationships as buyers

search for new suppliers
B to B digital and social media marketing
Using digital and social media marketing approaches to engage business
customers and manage customer relationships anywhere, anytime.
B-to-B marketers know that they aren’t really targeting businesses, they are
targeting individuals in those businesses who affect buying decisions. And
today’s business buyers are always connected via their digital devices—
whether it’s PCs, tablets, or smartphones
Digital platforms can be powerful tools for engaging customers and other
important publics.
Learning Objective 5
Compare the institutional and government

markets and explain how institutional and
government buyers make their buying
decisions.
• Institutional markets consist of schools,
hospitals, nursing homes, and prisons that
Institutional provide goods and services to people in
their care.
and • Characteristics
Government • Low budgets
Markets • Captive patrons
• Government markets tend to favor
domestic suppliers, require them to
Institutional submit bids, and normally award the
contract to the lowest bidder.
and • Affected by environmental factors
Government • Non-economic factors considered
Markets • Minority firms
• Depressed firms
• Small businesses

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Chapter 6

➢ Business purchases tend to have the following characteristics.

1. Business buyers face more complex buying decisions than

• Supplier development is the

Identify the major factors that influence business

Gatekeepers control the flow of information.

Participants in the Business Buying Process

Who participates in the decision?

Demand for Economic Cost of Supply of

Technology Culture Politics Competition

OBJECTIVES STRATEGIES STRUCTURE SYSTEMS PROCEDURES

Major Influences on Business Buyers

Motives Perceptions Preferences Age

and Online • Access to new suppliers

• Erodes relationships as buyers

Compare the institutional and government

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