5-1

5-2 Business Markets and Buyer Behavior Chapter 5 McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

5-3 Chapter Goals McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Nature and scope of the business market Seven categories of business buyers Characteristics of the business markets Determinants of business market demand Buying processes in business markets

5-4 Business Market Individuals and organizations that buy goods and services to Individuals and organizations that buy goods and services to ResellResell Make other goods and services Make other goods and services Conduct the organization’soperations organization’soperations

5-5 Components of the Business Market AgriculturalAgricultural ResellerReseller ServicesServices “Nonbusiness”“Nonbusiness” GovernmentGovernment InternationalInternational

5-6 Determinants of Business Market Demand Number and types of buyers of buyers Number and types of buyers of buyers Inelastic Demand Fluctuating Demand Well-informed market

5-7 NAICS Industry Sectors

5-8 Buying Power of Business Users ManufacturingManufacturing Activity indicators of purchasing power ConstructionConstruction MiningMining AgriculturalAgricultural

5-9 Importance of Business Buying Making less and buying more Making less and buying more Quality and time pressure pressure Concentrating purchases purchasesConcentrating Right product, right time, right price affects firm’s performance affects firm’s performance Right product, right time, right price affects firm’s performance affects firm’s performance

5-10 Business Buying-Decision Process

5-11 Buying Motives Needs that direct the purchasing behavior of business users Needs that direct the purchasing behavior of business users OrganizationalGoalsfurther company’s company’s position positionOrganizationalGoalsfurther company’s company’s position position Personal Goals Goals protect or further one’s positionPersonal Goals Goals protect or further one’s position

5-12 Multiple Buying Influences Influencers Buyer Decider User Gatekeeper

5-13 Buyer-Seller Relationships VALUE CHAIN LOYALTYLOYALTY Customer Relationship Management Customer Relationship Management Trust Cost Effective Cost Effective Long-term Relationship Marketing Relationship Marketing Selected Customer Selected Customer

5-14 Buying Practices LeasingLeasing Dependability of Supply of SupplyDependability ServiceExpectationServiceExpectation Reciprocity Agreements AgreementsReciprocity Length of Negotiation Negotiation Length of Negotiation Negotiation Size of Order Frequency of Purchase of PurchaseFrequency Direct Purchase PurchaseDirect

5-15 Electronic Commerce Reverse auctions Interactions and transactions over the Internet Interactions and transactions over the Internet Commodity sales Electronic bulletin boards boards

5-16 Key Terms and Concepts McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Business market Business user Business marketing Business marketer Agribusiness Reseller market Disintermediation Government market Business services market Nonbusiness market International market Elasticity of demand North American Industry Classification System (NAICS) Value added Vertical business market Horizontal business market Activity indicator of buying power Buying motives Buy class

5-17 Key Terms and Concepts McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. New-task buying Straight rebuy Modified rebuy Buying center Buying roles Value chain Loyalty Customer relationship management (CRM) Electronic commerce