1. MGT301 Principles of Marketing Lecture-16

2. Summary of Lecture-15

3. Consumer Buying Behavior Marketing and Other Stimuli Marketing and Other Stimuli Buyer’s Black Box ”what” & “how” Buyer’s Black Box ”what” & “how” Buyer’s Response Product Price Place Promotion Economic Technological Political Cultural Buyer characteristics affecting consumer behavior Buyer’s decision process Product choice Brand choice Dealer choice Purchase timing Purchase quantity

4. Characteristics Affecting Consumer Behavior  Cultural  Social  Personal  Psychological

5. Buyer Decision Process

6. Postpurchase Behavior Postpurchase Behavior Purchase Evaluation of Alternatives Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps Cultural, Social, Individual and Psychological Factors affect all steps

7. Social Factors Individual Factors Psycho- logical Factors Cultural Factors CONSUMER DECISION- MAKING PROCESS BUY / DON’T BUY

8. Today’s Topics

9. Business Markets and Buying Behavior

10. What is a Business Market? The Business Market - all the organizations that buy goods and services to use in the production of other products and services that are sold, rented, or supplied to others.

11. Characteristics of Business Markets

12. Market Structure and Demand  Fewer, larger buyers  Geographically concentrated  Demand derived from consumers  Inelastic demand  Fluctuating demand

13. Nature of the Buying Unit  More buyers  More professional purchasing effort

14. Types of Decisions & the Decision Process  More complex decisions  Process is more formalized  Buyer and seller are more dependent on each other  Build close long-term relationships with customers

15. Business Buyer Behavior The buying behavior of the organizations that buy goods and services for use in the production of other products and services or for the purpose of reselling or renting them to others at profit.

16. Model of Business Buyer Behavior

17. The Buying Organization Marketing and Other Stimuli Marketing and Other Stimuli Buyer’s Response Product Price Place Promotion Economic Technological Political Cultural Interpersonal and Individual Influences Organizational Influences Product or Service Choice Supplier Choice Order Quantities Delivery Terms and Times Service Terms Payment The Buying Center Buying Decision Process

18. Business Buying Situations

19. Straight Rebuy New Task Buying Modified Rebuy Involved Decision Making

20. Participants in the Business Buying Process: The Buying Center Buying Center Buying Center Users Gatekeepers DecidersInfluencers Buyers

21. Influencer Initiator User Gate- keeper Buying Center Buying Center Buyer Decider

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

23. Stages in the Business Buying Process

24. Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review

25. Key Organizational Buying Criteria

26. Quality Specifications Technical Capability Past Performance Organizational Buying Criteria Delivery Schedules Price Warranty / Claim Policies Production Facilities / Capacity

27. Institutional Markets Schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care.

28. Government Markets Governmental units-federal and provencial-that purchase or rent goods and services for carrying out the main functions of government.

29. Difference between Business Marketing and Consumer Market  Fewer buyers, concentrated, competitive  Driven by derived demand  More inelastic  More professional, complex  Direct purchase from producer

30.  Long-term relationship  More leasing  More departments are involved  Users, influencers, buyers, deciders, gatekeeper

31. Enough for today...

32. Summary Business Markets and Buying Behavior

33. Characteristics of Business Markets

34. Model of Business Buyer Behavior

35. The Buying Organization Marketing and Other Stimuli Marketing and Other Stimuli Buyer’s Response Product Price Place Promotion Economic Technological Political Cultural Interpersonal and Individual Influences Organizational Influences Product or Service Choice Supplier Choice Order Quantities Delivery Terms and Times Service Terms Payment The Buying Center Buying Decision Process

36. Business Buying Situations

37. Straight Rebuy New Task Buying Modified Rebuy Involved Decision Making

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

39. Stages in the Business Buying Process

40. Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review

41. Next…. Market Segmentation

42. MGT301 Principles of Marketing Lecture-16