Chapter 7
Definitions:
Business Buyer Behavior- Buying products and services for the production of their goods and services which are sold, rented or supplied to others.
Also includes Retail or wholesale firms that buy goods and services and then rent it to people at a profit
Business Buying Process- Businesses determine which products/services to purchase and then find, evaluate, and choose of among alternative suppliers and brands.
Business-to-Business marketers: Must create profitable relationships with business customers by creating superior customer value.
Derived Demand- Business demand derives from the demand for consumer goods
Supplier Development- Systematically developing a network of suppliers that ensure an appropriate and dependable amount of supply needed for when the business needs to make products or wants to resell.
Straight Rebuy: The buyer routinely reorders something without modification
Modified Rebuy: The buying situation in which the buyer wants to modify the product specifications, prices, terms, or suppliers.
New task: The buyer purchases a product for the first time
System selling (or solutions selling): Buying a packaged solution from a single seller to avoid complex buying situations
Buying centre: All the indivs and units that play a role in the business purchase decision making process; these include:
Users: Members of the buying organization that will actually use the product or service
Influencers: People in the buying process who influence buying decision. They help define specifications and also provide info for evaluating alternatives
Buyers: people in the buying centre that actually make a purchase
Deciders: People in the buying centre who have formal or informal power to select or approve final suppliers
Gatekeepers: People in the buying centre who control the flow of info to others
Business buying process:
Problem Recognition: Recognition of a problem or need that can be met by acquiring a g/s
General Need Description: Buyer describes a general description and characteristics and qty of the needed product.
Product Specification: Buying organization describes best technical product characteristics fofr the needed item
Supplier search: Buyer tries to find the best vendor
Proposal solicitation: buyer invites qualified suppliers to submit proposals
Supplier Selection: buyer reviews proposal and selects a supplier (s)
Order routine specification: Buyer writes the final order with the chosen supplier(s), listing technical specifications, qty needed, time of delivery, return policies and warranties
Performance Review: buyer assesses the performance of the supplier and decides if they want to continue
E-procurement: purchasing thru electronic connections b/w buyers and sellers
Reverse auctions: purchase requests – bidding amongst suppliers
Trading exchanges: companies work together to facilitate trading processes
Company buying sites- buying needs, bids, place orders
External links with key suppliers
Institutional markets: schools, nusery homes, hospitals and others that provide g/s services to ppl in care
Govt Markets- federal, provincial, municipal that purchase or rent g/s to carry out basoc fxns of govt
Business Markets
Business transactions are more than consumer purchases
Business Buyer Behavior
Consists of two major parts: the buying centre which composed of all the people involved in the buying decision and the buying decision process
Major Types of Buying Situations
“In” suppliers maintain product and service quality while “out” try to find new ways to add value to the product or exploit dissatisfaction so that the buyer will consider them.
For modified rebuy in suppliers will feel nervous and would want to put out their best food forward where out suppliers will take it as an opportunity to make a better offer and gain new business.
The greater the risk the more participants
The buyer makes fewer decisions in the straight rebuy and more in a new task
