CONSUMER AND

BUSINESS
MARKETS
Consumer Markets and Buying Behavior
 Consumers are of different genders and ages. They have
varying income levels, live in different regions of the
country, and have various personalities and psychological
profiles. This makes developing a single way to sell to
consumers difficult as they are influenced by different
factors when buying goods and services.
 Consumers purchases are initiated by marketing stimuli.
(4P’s: Product, Price, Place, Promotion)
Factors Affecting Buying Behavior
 Culture

An individual’s personal culture is developed over time.

This includes his manner of upbringing, his educational
background, and the collective culture of his/her family, and
that of the society where he belongs.
ex: “Keeping up with the Joneses” – People who feel it is
important to show that they are as successful as others.
Factors Affecting Buying Behavior
 Sub-Cultural factors are minute parts of one’s culture that
provide specific identification of its members. This can
include one’s nationality mix (e.g. Tsinoy, Mestizo, Fil-
Am) or regional origins (Ilocano, Batangueno, Ilonggo,
Kapampangan or Manileno)
 Socialclass is a status hierarchy in which individuals and
groups are classified through economic success and
accumulation of wealth.
(Social Classes: Upper Class, Middle Class, Working
Class, Lower Class)
Factors Affecting Buying Behavior
 Reference groups are people whom the buyer have
extended and intimate contact with. These groups exert
continuous influence on an individual’s choice of
product/services or brands to purchase. (families, friends,
schoolmates, and co-workers).
 Aspirational groups are groups that a person currently does
not belong to but wishes to belong to or be associated with.
Factors Affecting Buying Behavior
 Personal factors also play a sizeable in buying behavior.
People’s needs and wants changes as one ages.
 Occupation also plays an important indicator in the
products and services he/she purchases.
 Economic Capability – more money, more purchase
 Lifestyle is defined as a manner of living that reflects a
person’s values and attitudes
Factors Affecting Buying Behavior
 Personality refers to individual differences in characteristics
patterns of thinking, feeling, and behaving. The individual
personalities of consumers likewise influence their buying
behavior.
 Motivation addresses the issue why a consumer buys a
product or what needs he is trying to satisfy.
 Perception is the process by which people translate sensory
impressions into a coherent and unified view of the world
around them. Because of perception, consumers may view
marketing stimuli in different ways.
Factors Affecting Buying Behavior
 Learning is a relatively lasting change in behavior that is a
result of experience. When a consumer purchases a
particular brand of product and is completely satisfied with
it, his/her positive experience with the brand is reinforced.
Business Markets
 Business markets are all individual companies that purchase
goods and services for some use other than personal
consumption. The business market is far less is number than
the consumer market, buy less frequently, but in greater
volume.
 Three Types

1. Industries - are business organizations that purchase

goods and services for the purpose of producing other
products and services or for use in their production and
operating processes.
Business Markets
2. Resellers – are entities that buy goods and services in
order to resell them at a profit
3. Government – comprise of government agencies or units
at all levels that purchase goods and services for the purpose
of producing public services or to transfer them to third
parties that need them.
Business Market Buying Process

Step 1: Awareness and Recognition

Step 2: Specification and Research

Step 3: Request for Proposals

Step 4: Evaluation for Proposals

Step 5: Order and Review Process

Business Market Buying Process
 Step 1: Awareness and Recognition
Organization identifies a need for purchase (replacing
existing item, restocking)
 Step 2: Specification and Research
The purchasing team will prepare the agreed requirements
and will look for potential suppliers
 Step 3: Request for Proposals
Ask for a detailed proposal from the supplier containing
quotation or they can ask for presentation of their product.
Business Market Buying Process
 Step 4: Evaluation for Proposals
The purchasing team will assess the proposals submitted by the
suppliers in terms of price and value for money some negotiate
with the price and ask for discounts.
 Step 5: Order and Review Process
Once the purchasing team closed the deal with their suppliers, they
will then place an order. Review process will take place once the
product has received by the purchasing team and check the
performance of the product. If the product fails to meet the agreed
requirements or specification, they can impose penalty charged based
on their agreement.
Business Market Buying Roles
 Users – usually initiate the buying process after having identified a
specific need in their department. Because they will be the ultimate
user of the product, they usually indicate needed specifications for
the supply requirement.
 Influencers – are individuals within the organization that influence
the purchase decision; their inputs are especially important in
specification requirement and in alternative supplier evaluation.
 Deciders – are parties who are empowered to make the purchase
decision with regards to product specifications or selection of
suppliers.
Business Market Buying Roles
 Approvers – are individuals in higher level management who oversee the
purchase decisions of the deciders and buyers who grant final approval on
the purchase.
 Buyers – are responsible for the actual purchase; other than making the
actual purchase, buyers may be allowed to negotiate payment/and or credit
terms, delivery arrangements, and in some cases, even supplier selection.
 Gatekeepers – are individuals whose positions allow them to screen and/or
prevent supplier representatives and vital product/service information from
reaching participants who perform roles in the organizational buying
decision; in some instances, they may actually implicitly favor one supplier
over another.
Business Market Buying Behavior
 There are far less organizational accounts that consumer accounts
 Organizational accounts are more concentrated geographically
 The volume of products and services organizations buy are much
larger than consumer markets
 The buying decision and processes of organizational buyers are more
structured
 The buying decision of organizational accounts involves a lot of
negotiation and takes much longer to compete
Business Market Buying Behavior
 Organizations normally buy on extended payment terms
 Business market purchases are more rational and less emotional
 There are many participants playing different roles in the
organizational buying process, most of them possessing highly
specialized capacities
 Because organizations place larger orders and are fewer, firms
usually establish close relationships with these organizations
 Organizational markets have access to more information regarding
products/services
Activity (30 points)

 What are the similarities and differences of consumer market and

business market? Enumerate and explain briefly.