Chapter 6 Business Markets And Buying Behavior Objectives
Chapter 6 Business Markets And Buying Behavior
Objectives • Become familiar with various types of business markets • Identify major characteristics of business customers and transactions • Understand several attributes of demand for business products • Become familiar with major components of a buying center • Describe industrial classification systems and explain how they can be used to identify and analyze business markets Copyright © Houghton Mifflin Company. All rights reserved. 6|3
Business Market Individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations (B 2 B). Copyright © Houghton Mifflin Company. All rights reserved. 6|4
B 2 B Success • Long-term mutually profitable relationships • Co-develop products • Timely exchanges at competitive prices Copyright © Houghton Mifflin Company. All rights reserved. 6|5
Categories Of Business Markets 1. Producer 2. Reseller 3. Government 4. Institutional Copyright © Houghton Mifflin Company. All rights reserved. 6|6
Producer Market Individuals and business organizations that purchase products to make profits by using them to produce other products or using them in their operations. Copyright © Houghton Mifflin Company. All rights reserved. 6|7
Number of Establishments In Industry Groups Copyright © Houghton Mifflin Company. All rights reserved. 6|8
Reseller Markets Intermediaries that buy finished goods and resell them for profit. Copyright © Houghton Mifflin Company. All rights reserved. 6|9
Factors Considered When Making Business Purchase Decisions ü Level of demand ü Space required relative to potential profit ü Ease of placing orders ü Availability of technical assistance ü Training programs from producers ü Competes or complements Copyright © Houghton Mifflin Company. All rights reserved. 6 | 10
Government Markets Federal, state, county, or local governments that buy goods and services to support their internal operations and provide products to their constituencies. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 11
Institutional Markets Organizations with charitable, educational, community, or other nonbusiness goals. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 12
Dimensions Of Marketing B 2 B • Characteristics of transactions • Attributes of customers • Customer primary concerns • Methods of buying • Types of purchases • Demand Copyright © Houghton Mifflin Company. All rights reserved. 6 | 13
B 2 B Transaction Characteristics • Larger • Expensive • Frequent replenishing • Long-term agreement • Discussions/negotiations • Several decisionmakers • Reciprocity Copyright © Houghton Mifflin Company. All rights reserved. 6 | 14
Reciprocity An arrangement unique to business marketing in which two organizations agree to buy from each other. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 15
B 2 B Customer Attributes • Require detailed information – Product features – Technical specifications • Personal goals influence decision • Agents seek psychological satisfaction – Advancement – Financial rewards Copyright © Houghton Mifflin Company. All rights reserved. 6 | 16
B 2 B Customers Primary Concerns • Price • Quality • Service • Relationship Copyright © Houghton Mifflin Company. All rights reserved. 6 | 17
Methods Of B 2 B Buying • Description • Inspection • Sampling • Negotiation Copyright © Houghton Mifflin Company. All rights reserved. 6 | 18
Types Of B 2 B Purchases • New-Task • Straight Rebuy • Modified Rebuy Copyright © Houghton Mifflin Company. All rights reserved. 6 | 19
New-Task Purchase An initial purchase by an organization of an item to be used to perform a new job or solve a new problem. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 20
Straight Rebuy Purchase A routine purchase of the same products by a business buyer. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 21
Modified Rebuy Purchase A new-task purchase that is changed on subsequent orders or when the requirement of a straight rebuy purchase are modified. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 22
Business Product Demand • Derived • Inelastic • Joint • Fluctuating US Economic Outlook Copyright © Houghton Mifflin Company. All rights reserved. 6 | 23
Derived Demand for industrial products that stems from demand for consumer products. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 24
Inelastic Demand that is not significantly altered by a price increase or decrease. Prices for Manufactured Goods Copyright © Houghton Mifflin Company. All rights reserved. 6 | 25
Joint Demand involving the use of two or more items in combination to produce a product. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 26
Fluctuating Demand When demand for a business product is derived by consumer demand, causing it to fluctuate enormously Copyright © Houghton Mifflin Company. All rights reserved. 6 | 27
Business Buying Decisions • Buying Behavior • Buying Center • Stages of Process • Influences Copyright © Houghton Mifflin Company. All rights reserved. 6 | 28
Business (Organizational) Buying Behavior The purchase behavior of producers, government units, institutions, and resellers. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 29
Buying Center The people within an organization who make business purchase decisions. Purchasing Agent Copyright © Houghton Mifflin Company. All rights reserved. 6 | 30
Business Buying Decision Process And Factors That May Influence It Copyright © Houghton Mifflin Company. All rights reserved. 6 | 31
Value Analysis An evaluation of each component of a potential purchase. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 32
Vendor Analysis A formal, systematic evaluation of current and potential vendors. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 33
Multiple Sourcing An organization’s decision to use several suppliers. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 34
Sole Sourcing An organization’s decision to use only one supplier. Buyers select the sole source option when. . . Copyright © Houghton Mifflin Company. All rights reserved. 6 | 35
Using Industrial Classification Systems • Identifying Potential Business Customers • Estimating Purchase Potential Copyright © Houghton Mifflin Company. All rights reserved. 6 | 36
North American Industry Classification System (NAICS) An industry classification system that generates comparable statistics among the United States, Canada, and Mexico. North American Industry Classification System Copyright © Houghton Mifflin Company. All rights reserved. 6 | 37
SIC/NAICS For Manufacturers Of Magnetic And Optical Media Copyright © Houghton Mifflin Company. All rights reserved. 6 | 38
Input-Output Data Information that identifies what types of industries purchase the products of a particular industry. Copyright © Houghton Mifflin Company. All rights reserved. 6 | 39
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