Analyzing Business Markets and Business Buying Behavior Chapter 8 Analyzing Business Markets and Business Buying Behavior

How to distinguish Business and Consumer markets? Look at the purpose of uses-- 3 purposes: Reselling? Using in further production? Providing service to ultimate customer?

Differences between Business and Consumer Markets Fewer buyers Larger buyers Close supplier-customer relationship Geographically concentrated Derived demand Inelastic demand (inelastic in the short-run and for the insignificant part) Fluctuating demand (to be continued)

Differences between Business and Consumer Markets Professional purchasing Several buying influences Multiple sales calls Direct purchasing Reciprocity Leasing

New Task Buying Modified Rebuy Straight Rebuy Custom furniture New security system Buildings Weapon systems Involved Decision Making Modified Rebuy New vehicles Elec. Equip Computer equip Straight Rebuy Utilities Office Supplies Bulk chemicals

Participants in the Business Buying Process Initiator User Influencer Decider Approver Buyer Gatekeeper

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

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