Business Markets Business Buying Behavior The business markets

Business Markets & Business Buying Behavior

• The business markets consists of all individuals & organizations that buy goods & services for one or more of the following purposes: • To make other goods & services: Eg: Dell buys micro processors to make computers, & henredon buys wood to make furniture. To resell to other business users or to consumers: Eg: Resullar Inc Buys used cellular phones & wireless equipments to refurbish & to sell to business customers.

• To conduct the organizations operations: Kroger buys bags to sack groceries. • So any good or services purchased for a reason other than personal or house hold consumption is part of business market.

Components of the business Market • • The Agriculture Market: The Reseller Market The govt Market The Services Market.

• Agribusiness: • Farming, food processing, & other largescale farming related business. • Reseller Market: • Intermediaries like retailers, middleman, wholeseller comprise Of reseller market. The govt Market: The govt agency advertises for bids using a standard format called request for proposals(RFP) that states specifications for the intended purchase.

• The services Market: • It includes purchasers of marketing research & the services of as Agencies. Eg: • Hospitals buy supplies & medical equipment from healthcare corporations.

Business Buying Behaviour • Business buying behavior is initiated when an aroused need is recognised. Importance: Top managers in most companies have come to realize that the buying decisions their organzations make are an important part of overall strategy. Securing the right products at right time for the right price can play a major role in a firms performance for at least three reasons

1. Companies are making less & buying more: For eg: Toyota annually buys $15 billion worth of parts, materials, & services from hundred of U. S suppliers for use in its production both in U. S & overseas When outside suppliers become this significant, buying becomes a prime strategic issue.

• 2. Firms are under intense quality & time pressures: • To reduce reworking costs & improve efficiency, firms cannot tolerate defective parts & supplies. • As a result , price is only one of several decision criteria used in selecting vendors.

• 3. Firms are concentrating their purchases: • To get what they need, companies are dealing with fewer suppliers but are developing long term”partnering”relationship with them.

• Buying Decision process in business: • The buying decision process in business markets is a sequence of five steps: • NEED RECOGNITION • IDENTIFICATION OF ALTERNATIVES • EVALUATION OF ALTERNATIVES • PURCHASE DECISION • POST PURCHASE BEHAVIOR

• 1. Need recognition: • Hershey’s market research • Need to produce good tasting confectionaries • Without sugar or fewer calories, • Need : to find substitute is challenge. • 2. Identifcation of alternatives: • Eg to make sugar free confectionaries the possibilities include purchase of saaharin, sucralose etc

• 3. Evaluation of alternatives: • Hershey discovers that some sugar substitutes cannot withstand high temperatures. • The evaluation goes beyond performance & price to consider the suppliers abilities to meet delivery schedules. • 4. Purchase Decision: Purchasing deptt negotiates the contract.

• 5. Post purchase behavior: • Hershey Managers continue to evaluate the performance of the sugar substitute & the selected supplier to ensure that both meet the expectations

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