Unit 5- Business Buying Behavior PDF

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Lehman lecture over business buying behavior....

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Unit 5- Business Buying Behavior 

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Business Markets o Business buyer behavior—refers to the buying behavior of the organizations that buy goods and services for use in production of other products and services that are sold, rented, or supplied to others. Also included are retailing and wholesaling firms that acquire goods to resell or rent to others for profit. o Business buying process—process where business buyers determine which products and services are needed to purchase, and then find, evaluate, and choose among alternative brands o Environmentbuying organizationbuyer responses Three Key Characteristics of Business markets o Marketing structure and demand  Business markets  Fewer but larger customers  Customers are more geographically concentrated  Business buyer demand is derived from final consumer demand o EX: all markets declined during recession  Business demand is more inelastic – not affected as much in the short term by price changes o Doesn’t change as much  Demand in business markets fluctuates more and more quickly o Nature of the buying unit  Business purchases are much larger in terms of the amount of money spent; therefore, the risk of purchasing mistakes is higher  Business buying involves a more professional purchasing effort by dedicated buyers (whose entire job is to buy products and services from suppliers) and usually involved more ppl in the decision-making process  Business purchases require more time in business cycle o Business buying process  Business buyers usually face more complex buying decisions  Business buying process is more formalized  Buyers and sellers often work closely together and build long-term relationships Four types of buying situations o Straight rebuy—routine purchase decision such as reorder w/out any modification  Routine purchase; company buys same things repeatedly o Modified rebuy—purchase decision that requires some research where the buyer wants to modify the product specification, price, terms, etc o New task—purchase decision that requires thorough research such as a new product o Systems selling—involves purchase of a packaged solution from a single seller Buying center—all of individuals who participate in the business decision-making process o Users, influencers, buyers, deciders, gatekeepers

Unit 5- Business Buying Behavior

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o Challenges include:  Who participators in the process?, relative authority of each participant?; evaluation criteria used? Eight Steps of the business buying process o Problem recognition, general need description, product specification, supplier research, proposal solicitation, supplier selection, order-routine specification, performance review o NOT ON TEST...