Analyzing Business Markets & Business Buying Behavior

Prof.Sapna Modi

Objectives
• How Business & Consumer Markets Differ • Organizational Buying Situations • Participants in the Business Buying Process • Major Influences on Organizational Buyers • Business Buyer Decision Making
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Business vs. Consumer Markets
• • • • • • • Fewer buyers Larger buyers Close supplier-customer relationship Geographically concentrated Derived demand Inelastic demand Fluctuating demand
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Business vs. Consumer Markets
• • • • • • Professional purchasing Several buying influences Multiple sales calls Direct purchasing Reciprocity Leasing

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New Task Buying

Custom furniture Installed components Buildings Weapon systems New vehicles Elec. Equip Consultants Computer equip.

Involved Decision Making

Modified Rebuy

Utilities Office Supplies Bulk

Straight Rebuy
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Participants in the Business Buying Process
Users Initiators Influencers Gatekeepers Buyers Approvers
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Deciders

Major Influences on Industrial Buying Behavior
Environmen
Organizati

Interpers Level of demand Individu •Objectives Economic •Interests •Age outlook •Policies Business •Authority •Income nterest rate •Education Buyer •Procedures Rate of techno•Job position •Status logical change•Organizational •Personality structures •Empathy •Risk attitudes Political and •Culture regulatory •Persuasivedevelopments•Systems ness Competitive developments
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Social responsibility concerns

Organizational Factors

PurchasingDepartment Upgrading

CrossFunctional Roles

Centralized Purchasing

Decentralized Purchasing of Small Ticket Items

Internet Purchasing

Long-Term Contracts

PurchasingPerformance Evaluation & Pro. Buyers

Lean Production

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ral Need Description Performance Product Proposal Solicitation Supplier Search Specification Order Routine Specifica m RecognitionSupplier Selection Rev

Need Recogniti on

Info Searc h/ Eval Purcha se Post Purcha se

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Captive Patrons Captive Patrons Institutional Markets Institutional Markets
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Low Budgets Low Budgets

Government Markets Open Bids

Paperwork

Cost Minimization Domestic Suppliers

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Public Review

Review
• How Business & Consumer Markets Differ • Organizational Buying Situations • Participants in the Business Buying Process • Major Influences on Organizational Buyers • Business Buyer Decision Making
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