BUSINESS/ORGANISATIONAL BUYING

BEHAVIOR
 WHAT WILL WE LEARN IN THIS UNIT:-
What is business market

Characteristics of business market

Types of Business Consumers

Buying Center

Role of Various Functional

Departments in Purchase Process

Buying Motives Of Business

Buyers
 What will we learn in this unit:-
Buying Situations

Business
Buying Process

Types Of Business Buying

Factors influencing business buying

Business Market Segmentation

Models for Market Segmentation

What is Business Market?

The Business Market - all the

organizations that buy goods and services
to use in the production of other products
and services that are sold, rented, or
supplied to others.

Business markets involve many more

dollars and items than do consumer
markets.
Characteristics of Business Markets

Market Structure and Demand

Nature of the Buying Unit

Types of Decisions & the

Decision Process
Market structure
and Demand
Fluctuating
Demand

Fewer, Larger Inelastic

Buyers Demand

Derived
Geographically
Demand from
Concentrated
consumers
Nature of the Buying Unit

More Buyers

More Professional Purchasing efforts

 More
complex
decisions

Types of
Buyer and seller
are more decision & Process is
more
dependent on
each other decision formalized

process

Build
close
long-term
relationsh
ips
 Commercial
Enterprises

Types of Organizational
Users Business Distributors and
Consumers Dealers

Original Equipment
Manufacturers
Participants in the Business Buying
Process: The Buying Center

Gatekeepers Users

Buying
Deciders Center Influencers

Buyers
 Production and
Marketing
Operations

Role of Various
Functional
Departments in
Purchase Process

Research and Purchase

Development Department
Buying Motives Of Business Buyers

Efficiency

Sale ability Economy

Simplicity Good Quality

Buying Motives Of Business Buyers

Ease of
Operation

Cleanliness Space Saving

Safety Obsolescence
 Major Types of Organisational
Buying Situations:-
The buyer routinely reorders
Straight Re-buy something without any
modifications.

The buyer wants to modify

Modified Re-buy product specifications,
prices, terms, or suppliers.

The buyer purchases a

New Task product or service for the
first time.
 Characteristics of the
Three Types of Buying
Decisions:-
Straight Modified New
Rebuy Rebuy Task
Newness of Problem or Need Low Medium High
Information Requirements Minimal Moderate Maximum
Information Search Minimal Limited Extensive
Consideration of New Alternatives None Limited Extensive
Multiple Buying Influence Very Small Moderate Large
Financial Risks Low Moderate High

Routine Limited Extended

response prob. prob solving
solving
Stages in the Business
Buying Process:-
Problem Recognition

General Need Description

Product Specification

Supplier Search

Proposal Solicitation

Supplier Selection

Order Routine Specification

Performance Review
 Types Of Business Buying:-

Competitive Non-Tender Reverse

Tendering Purchasing Auction

Supply Chain Purchasing

Management Card
Major Influences on
Business Buying:-
Environmental
Economic, Technological, Political, Competitive & Cultural

Organizational
Objectives, Policies, Procedures,
Structure, & Systems
Interpersonal
Authority, Status, Empathy &
Persuasiveness
Individual
Age, Education, Job Position, Personality &
Risk Attitudes

Buyers
 Classification of
organisational markets

 Producer markets

 Reseller markets

 Government markets

 Institutional markets
 Producer markets

1. OEM (Original Equipment Manufacturers)

2. Industrial dealers (intermediaries)
3. Buyers of industrial tools- eg. Drilling
machines.
 Reseller markets

1. Wholesalers
2. Retailers

 Government agencies

1. Central govt., State govt., district,

municipal and village levels
 Institutional Markets

Combination of govt. and private organisations.

Comprises of schools, colleges, universities,
hospitals, museums etc.
 Organisational Markets in
India

 Can be divided into three sectors:

1. Chemical and pharmaceutical

2. Energy and natural resources
3. Industrial and automotive
CRITERIA FOR BUSINESS MARKET
SEGMENTATION:-

Measurability Sustainability

Operational
Relevance to
marketing strategy
Models for Market
Segmentation:-

Two-stage
market
segmentation Nested Approach
to segmentation
Two-stage market segmentation:-

Macro-segmentation

Micro-segmentation
 Macro-segmentation:-

Organization Geographic Industry

size Location Classification

Purchasing Decision-
Situation making stage
 Two-stage market segmentation:-

Customers’
Benefit Type of
business
Segmentation institution
potential

Purchasing Supply chain

Strategies Position
 Macro-segmentation:-

Buying Structure of
Purchasing
decision decision
strategy
criteria making unit

Perceived Attitude
importance of towards the
the product supplier
 Nested Approach to
segmentation:-

Demographics

Operating
variables

Purchasing Situational Buyers’ personal

Approaches factors characteristics
What we learnt in this unit:-
What is business market

Characteristics of business market

Types of Business Consumers

Buying Center

Role of Various Functional

Departments in Purchase Process

Buying Motives Of Business

Buyers
What we learnt in this unit:-
Buying Situations

Business
Buying Process

Types Of Business Buying

Factors influencing business buying

Business Market Segmentation

Models for Market Segmentation