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Analyzing Business Markets & Business Buying Behavior

Analyzing Business Markets & Business Buying Behavior. Otterbein College Winter 2000. Chapter Content. 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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Analyzing Business Markets & Business Buying Behavior

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  1. Analyzing Business Markets &Business Buying Behavior Otterbein CollegeWinter 2000

  2. Chapter Content • 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. What is a 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 do consumer markets.

  4. Characteristics of Business Markets Market Structure and Demand • Fewer, larger buyers • Geographically concentrated • Demand derived from consumers • Inelastic demand • Fluctuating demand Nature of the Buying Unit • More buyers • More professional purchasing • effort Types of Decisions & the Decision Process • More complex decisions • Process is more formalized • Buyer and seller are more • dependent on each other • Build close long-term relationships • with customers

  5. New Task Buying Modified Rebuy Straight Rebuy Types of Business Buying Custom furniture Installed components Buildings Weapon systems New vehicles Electrical equipment Consultants Computer equipment • Involved Decision Making 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 Business Buyer Major Influences onIndustrial Buying Behavior

  8. 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 Organizational Factors

  9. Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review Stages in the Business Buying Process Need Recognition Information Search & Evaluation Purchase Post Purchase

  10. Institutional Markets Government Markets Institutional and Government Markets Low Budgets Captive Patrons Public Review Specialized Buying Open Bids Outside Publics Negotiated Contracts

  11. Next... • Dealing with the Competition

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