4 Business to Business Buyer Behavior Chapter Overview Business Markets/ Customers Types of Business Markets Business Buying Centers Factors to choose Business Buying Centers Business Sales Business to Business Buying Process

What Is Business Marketing? The marketing of goods and services to individuals and organizations for purposes other than personal consumption.

Producers/ Manufacturers T A B L E 4 . 1 Major Categories of Business Customers Business Customers Producers/ Manufacturers Resellers Governments Institutions OEMs Wholesalers Retailers Federal Municipal Local Schools Hospitals Colleges Churches Unions Fraternal groups Civic Clubs Foundations Nonbusiness organizations 2. Philosophies of Gates affects views of Microsoft 3. Country – perception of Japan effects views of Sony

Original Equipment Manufacturers Producers Original Equipment Manufacturers OEMs Individuals and organizations that buy business goods and incorporate them into the products that they produce for eventual sale to other producers or to consumers. C – assurance concerning purchases B – risk reduction Company – can charge higher prices

Business versus Consumer Markets Characteristic Demand Volume # of Customers Location Distribution Nature of Buy Buy Influence Negotiations Reciprocity Leasing Promotion Business Market Organizational Larger Fewer Concentrated More Direct More Professional Multiple More Complex Yes Greater Personal Selling Consumer Market Individual Smaller Many Dispersed More Indirect More Personal Single Simpler No Lesser Advertising

Buying Centers Buying Center All those persons in an organization who become involved in the purchase decision. Ford – quality is job one Family branding – e.g., Delmonte – advantages and disadvantages?

Five Roles in Buying Center Users are those that will use the product or service Influencers help define specifications and provide information for evaluating alternatives Buyers have formal authority to select the supplier and arrange terms of purchase Deciders have formal or informal power to select and approve final suppliers Gatekeepers control the flow of information

Factors affecting Business Buying Centers Organizational factors Individual factors Cultural Social “gourmet” “natural” “premium”

Business Sales New Buy Modified Rebuy Straight A situation requiring the purchase of a product for the first time. Modified Rebuy A situation where the purchaser wants some change in the original good or service. Straight A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers. Should be consistent with image and brand, but is it always? Use Doug’s exercise

Business to Business Buying Process Domination – consumer’s belief that the brand is #1

Business Buying Process: Eight Stages Stage 1: Problem Recognition Stage 2: General Need Description Stage 3: Product Specification Value analysis helps to reduce costs Stage 4: Supplier Search Supplier development Domination – consumer’s belief that the brand is #1

Business Buying Process: Eight Stages Stage 5: Proposal Solicitation Stage 6: Supplier Selection Stage 7: Order-Routine Specification Blanket contracts are often used for maintenance, repair and operating items. Stage 8: Performance Review Domination – consumer’s belief that the brand is #1