BUSINESS MARKET

-are composed of firms and business organizations that purchase semi-processed goods and raw
materials either for their operations or for reselling.
CHARACTERISTICS OF BUSINESS MARKET
1. Demand in business market- the demand for products in the business market is referred to as DERIVED
DEMAND based on the needs of the consumers.
For instance, if consumers buy more bread then bakeries would be driven to purchase more flour.

2. Complexity of buying decisions- business purchases often involve a lot of money because the company
either makes repeat purchases of a product, or it buys a product which will be used for a long time such as
heavy equipment and machinery.

3. Involvement of professional purchasing agents- since business purchases tend to be highly complex
and risky, firms rely on the expertise of professional purchasing agents.

BUSINESS BUYING DECISION PROCESS

1. Recognition of a Need- For instance, a particular business market may want to launch a new product or
make modifications to it such as addition of a flavor or a scent.

2. Determining a product specification- Product specifications refer to the function, features, and
requirements related to the product or service to be created or improved.

3. Listing possible suppliers- This stage may take some time, as there is a need to come up with an
extensive list of suppliers who can comply with the product specifications at an affordable price.

4. Section of supplier- From the supplier list, the business then selects the one which offers the product
that complies to its specifications at a reasonable price.

5. Periodic Review- After the supplier is selected, the quality of the raw material or equipment bought will
be evaluated regularly by the personnel who use the purchased product.

TYPES OF BUSINESS SITUATIONS

1. Straight Rebuy- the company or firm is satisfied with the raw materials or equipment from the supplier
and makes rebuys on a regular basis.

2. Modified Rebuy- the company make changes in tis specifications, which may include the pricing of the
product, terms of payment, or the delivery schedule.

3. New Buy- refers to a new purchase made by the firm or company from a different supplier.
PARTICIPANTS IN THE BUSINESS BUYING PROCESS

1. Users- directly utilize products and services from suppliers.

2. Influencers- the influencers help in further defining the specifications and features needed for a
product or service.

3. Buyers- are usually the professional purchasing agents of the firms who negotiate with the suppliers as
part of the buying process.

4. Deciders- are people in the business organizations who have the authority to make or approve of
decisions.

5. Gatekeepers- control the flow of information from the business markets to the suppliers.