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Global Edition: Business Markets and Business Buying Behavior

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31 views26 pages

Global Edition: Business Markets and Business Buying Behavior

kkkkkkkkkkkkjjjjjjjjjjjjjjjjjjj

Uploaded by

SharWin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Global Edition

Chapter 6

Business Markets and


Business Buying
Behavior
Copyright
2012
Pearson
Copyright
2014
by Pearson
EducationEducation, Inc.
Publishing as Prentice Hall

6-1

Business Markets and


Business Buying Behavior
1.
2.
3.
4.
5.

Topic Outline
Business Markets
Business Buyer Behavior
The Business Buying Process
E-Procurement: Buying on the Internet
Institutional and Government Markets

Copyright 2014 by Pearson Education

BUSINESS MARKETS
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.
Business buying process
is the process where business buyers determine
which products and services are needed to
purchase, and then find, evaluate, and choose
among alternative brands
Copyright 2014 by Pearson Education

Business Markets
Market Structure and Demand

1 Fewer and larger buyers


2 Derived demand
Inelastic demand
Fluctuating demand
Copyright 2014 by Pearson Education

Business Markets
Decision Process
More complex
More decision participants
More professional purchasing
effort
Buyer and seller more
dependent
Copyright 2014 by Pearson Education

Business Markets

Decision Process

Supplier development
systematic development of
networks of supplier-partners to
ensure an appropriate and
dependable supply of products
and materials
that they will use in making their
own products or resell
Copyright 2014 by Pearson Education

Business Buyer Behavior

The Model of Business Buyer Behavior

Copyright 2014 by Pearson Education

Business Buyer Behavior

Major Types of Buying Situations

1. Straight rebuy
is a routine purchase decision such as reorder
without any modification
2. Modified rebuy
is a purchase decision that requires some research
where the buyer wants to modify the product
specification, price, terms, or suppliers
3. New task
is a purchase decision that requires thorough research such
as a new product
Copyright 2014 by Pearson Education

Business Buyer Behavior


Major Types of Buying Situations

Systems selling
involves the purchase of a
packaged solution from a
single seller

Copyright 2014 by Pearson Education

Business Buyer Behavior


Participants in the Business Buying Process

1. Buying center
is all of the individuals and units
that participate in the business
decision-making process

Copyright 2014 by Pearson Education

Business Buyer Behavior


Participants in the Business Buying
Process

Buying center provides a major


challenge
Who participates in the process
Their relative authority
What evaluation criteria each
participant uses
Informal participants
Copyright 2014 by Pearson Education

Business Buyer Behavior


Participants in the Business Buying Process
2. Users
are those that will use the product or service
3. Influencers
help define specifications and provide information for
evaluating alternatives
4. Buyers
have formal authority to select the supplier and arrange
terms of purchase
5. Deciders
have formal or informal power to select and approve final
suppliers
6. Gatekeepers
control the flow of information
Copyright 2014 by Pearson Education

MAJOR INFLUENCES ON
BUSINESS BUYERS

1. Economic
Factors

2. Personal
Factors

Price
Emotion
Service
Copyright 2014 by Pearson Education

MAJOR INFLUENCES ON
BUSINESS BUYERS
3. Environmental Factors

Demand for
product

Economic
outlook

Cost of
money

Supply of
Materials

Technology

Culture

Politics

Competition

Copyright 2014 by Pearson Education

MAJOR INFLUENCES ON
BUSINESS BUYERS
4. Organizational Factors

Objectives
Policies
Procedures
Structure
Systems
Copyright 2014 by Pearson Education

MAJOR INFLUENCES ON
BUSINESS BUYERS
5. Individual Factors

Motives

Perceptions

Income

Copyright 2014 by Pearson Education

Preferences

Education

Age

Attitude
toward risk

Business Buyer Behavior


The Buying Process

Copyright 2014 by Pearson Education

THE BUYING PROCESS


1. PROBLEM RECOGNITION
Problem recognition occurs when someone in
the company recognizes a problem or need
Internal stimuli
Need for new product or production
equipment
External stimuli
Idea from a trade show or advertising

Copyright 2014 by Pearson Education

THE BUYING PROCESS


2. GENERAL NEED DESCRIPTION
3. PRODUCT SPECIFICATION
General need
description describes the characteristics and quantity of the
needed item
Product specification
describes the technical criteria
Value analysis
is an approach to cost reduction where components are
studied to determine if they can be redesigned,
standardized, or made with less costly methods of
production
Copyright 2014 by Pearson Education

THE BUYING PROCESS


4. SUPPLIER SEARCH
5. PROPOSAL SOLICITATION
Supplier search
involves compiling a list of qualified
suppliers
Proposal solicitation
is the process of requesting proposals from
qualified suppliers
Copyright 2014 by Pearson Education

THE BUYING PROCESS

6. SUPPLIER SELECTION
7. ORDER-ROUTINE SPECIFICATIONS

Supplier selection
is the process when the buying center creates a
list of desired supplier attributes and negotiates
with preferred suppliers for favorable terms and
conditions
Order-routine specifications
is the final order with the chosen supplier and lists
all of the specifications and terms of the purchase
Copyright 2014 by Pearson Education

THE BUYING PROCESS


8. PERFORMANCE REVIEW

Performance review
involves a critique of supplier performance
to the purchase terms

Copyright 2014 by Pearson Education

Business Buyer Behavior


E-Procurement
1. Online purchasing
2. Company-buying sites
3. Extranets

Copyright 2014 by Pearson Education

Business Buyer Behavior


E-Procurement

Advantages
1. Access to new
suppliers
2. Lowers costs
3. Speeds order
processing and
delivery
4. Shares information
5. Sales
6. Service and support
Copyright 2014 by Pearson Education

Disadvantages
1. Can erode
relationships as
buyers search for
new suppliers
2. Security

INSTITUTIONAL AND
GOVERNMENT MARKETS
1. Institutional markets
.consist of hospitals, nursing homes, and prisons
that provide goods and services to people in their
care
.Characteristics
Low budgets
Captive audience
Copyright 2014 by Pearson Education

INSTITUTIONAL AND
GOVERNMENT MARKETS
2. Government markets
tend to favor domestic suppliers and require
suppliers to submit bids and normally award to
the lowest bidder
Affected by environmental factors
Non-economic factors considered
Minority suppliers
Depressed suppliers
Small businesses
Copyright 2014 by Pearson Education

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