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Understanding Business Markets & Buying Behavior

Explore the distinctions between business and consumer markets, buying processes, influential factors, decision-making dynamics, and the impact of institutional and governmental purchasing practices.

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Understanding Business Markets & Buying Behavior

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  1. Chapter 7 Analyzing Business Markets & Business Buying Behavior Marketing Management Tenth Edition Philip Kotler

  2. Objectives • How Business & Consumer Markets Differ • Organizational Buying Situations • Participants in the Business Buying Process • Major Influences on Organizational Buyers • Business Buyer Decision Making • Institutional & Government Buying

  3. Business vs. Consumer Markets • Fewer buyers • Larger buyers • Close supplier-customer relationship • Geographically concentrated • Derived demand • Inelastic demand • Fluctuating demand

  4. Business vs. Consumer Markets • Professional purchasing • Several buying influences • Multiple sales calls • Direct purchasing • Reciprocity • Leasing

  5. Custom furniture Installed components Buildings Weapon systems New Task Buying Modified Rebuy • Involved Decision Making Straight Rebuy New vehicles Elec. Equip Consultants Computer equip. Utilities Office Supplies Bulk chemicals

  6. Participants in the Business Buying Process Users Initiators Influencers Gatekeepers Buyers Deciders Approvers

  7. Level of • demand • Economic • outlook • Interest rate • Rate of techno- • logical change • Political and • regulatory • developments • Competitive • developments • Social responsi- • bility concerns Environmental • Objectives • Policies • Procedures • Organizational • structures • Systems Organizational • Interests • Authority • Status • Empathy • Persuasive- • ness Interpersonal • Age • Income • Education • Job position • Personality • Risk attitudes • Culture Individual Major Influences on Industrial Buying Behavior Business Buyer

  8. Organizational Factors Purchasing- Department Upgrading Cross- Functional Roles Centralized Purchasing Decentralized Purchasing of Small Ticket Items Internet Purchasing Long-Term Contracts Purchasing- Performance Evaluation & Pro. Buyers Lean Production

  9. Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review Need Recognition Info Search/ Eval Purchase Post Purchase

  10. Institutional Markets Low Budgets Captive Patrons

  11. Government Markets Public Review Domestic Suppliers Cost Minimization Open Bids Paperwork

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

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