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Characteristics and Decision Process of Business Markets

Learn about the characteristics of business markets, including market structure and demand, nature of the buying unit, types of decisions, and the decision process. Understand the roles of participants in the buying process and the stages of the business buying process.

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Characteristics and Decision Process of Business Markets

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  1. CHAPTER 6 Business Market and Business Buyer Behavior www.AssignmentPoint.com

  2. BUSINESS MARKETS All organizations that buy goods or services for use in the production of other products and services that are sold, rented or supplied to others. www.AssignmentPoint.com

  3. CHARACTERISTICS of Business Market 1. Market Structure and Demand • Fewer but larger buyers • More geographically concentrated • Derived demand • Inelastic demand • Fluctuating demand www.AssignmentPoint.com

  4. 2. Nature of the Buying Unit • More decision participants/buyers • More professional purchasing effort 3. Types of Decisions and the Decision Process • More complex buying decisions • More formalized buying process • Much more dependent on each other • Close long-run partnership with customers www.AssignmentPoint.com

  5. A MODEL OF BUSINESS BUYER BEHAVIOR The environment The buying organization Buyer responses Marketing stimuli Other stimuli (Organizational influences) Product/service choice Supplier choice Order quantities Delivery terms & times Service terms Payment The buying center (Interpersonal & individual influences ) Buying decision process Product Price Place Promotion Economic Technologi -cal Political Cultural www.AssignmentPoint.com

  6. MAJOR TYPES OF BUYING SITUATION The buyer routinely reorders something without any modifications. Straight re-buy The buyer wants to modify product specifications, price, terms or suppliers. Modified re-buy The buyer purchases a product or service for the first time. New task www.AssignmentPoint.com

  7. PARTICIPANTS INTHE BUYING PROCESS BUYING CENTER: The decision-making unit of a buying organization is called its buying center - all the individuals and units that participate in the business buying-decision process. The buying center includes all members of the organizations who play any of five roles in the purchase decision process. www.AssignmentPoint.com

  8. 5 Roles • USERS • Use the product/service • Initiate the buying proposal • Help define product specifications • INFLUENCERS • Help define specifications • Provide information for evaluating alternatives www.AssignmentPoint.com

  9. BUYERS • Have formal authority to select the suppliers • Have authority to arrange terms of purchase • Negotiate with other parties • DECIDERS • Have formal or informal power to select or approve the final suppliers. • GATEKEEPERS • Control the flow of information. www.AssignmentPoint.com

  10. THE BUSINESS BUYING PROCESS(8 stages) Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order-routine specification Performance review www.AssignmentPoint.com

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