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Business Buyer Behavior..

The document discusses organizational buyer behavior, highlighting the differences between business and consumer markets, including market structure, buying units, and decision processes. It outlines three major buying situations: straight rebuy, modified rebuy, and new task, along with the roles of key players in the buying process, such as users, influencers, buyers, and deciders. Additionally, it covers various influences on organizational buying behavior, including environmental, organizational, interpersonal, and individual factors, as well as the steps in the organizational buying process.

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23 views26 pages

Business Buyer Behavior..

The document discusses organizational buyer behavior, highlighting the differences between business and consumer markets, including market structure, buying units, and decision processes. It outlines three major buying situations: straight rebuy, modified rebuy, and new task, along with the roles of key players in the buying process, such as users, influencers, buyers, and deciders. Additionally, it covers various influences on organizational buying behavior, including environmental, organizational, interpersonal, and individual factors, as well as the steps in the organizational buying process.

Uploaded by

mrtbsekati
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 26

WEEK5

Business Markets and Business Buyer


Behaviour
Organizational Buyer Behaviour
Organizational Buyer Behavior
• Business/organizational buyer behavior
– refers to the buying behavior of the organizations
that buy goods and services for use in the
production of other products and services that are
sold , rented or supplied to others .
• Business markets differ from consumer
markets : market structure ,nature of the
buying unit , and the type of decisions and
decision process .
Organizational Buyer Behavior
• Business/organizational buyer behavior
– refers to the buying behavior of the organizations
that buy goods and services for use in the
production of other products and services that are
sold , rented or supplied to others .
• Business markets differ from consumer
markets : market structure ,nature of the
buying unit , and the type of decisions and
the decision process involved .
Characteristics of Business Markets
• Market structure and Demand
– Contains fewer but larger buyers
– Demand -,Derived Demand, Inelastic Demand and Fluctuating
–

• Nature of buying unit


– Business purchases involve more participants .
– Business buying involves a more professional
purchasing effort
Characteristics of Business Markets
• Types of decisions/decision process .
– Business buyers face more complex buying
decisions than do the consumer buyers
– The business buying process is more longer and
formalized
– Buyers and sellers build close long-run
relationships
Buying Situations
• 3 major situations
– Straight rebuy
– Modified rebuy
– New task
Buying Situations
• Straight rebuy - the buyer reorders
something without modifications . It is usually
handled in on a routine bases by the
purchasing department
• Modified Rebuy – the buyer wants to modify
product specifications, price, terms or
suppliers
Buying Situations

• New task - company buys a product for the


first time faces a new task situation. The buyer
must decide on product
specifications ,suppliers ,price limits ,payment
terms , order quantities ,delivery times and
service terms
Key Players in the Buying Process
• Buying center
• It is made up of individuals and units that
participate in the business decision making
process
• The buying center includes all members of
the organization who play any of the Six roles
in the purchase decision process
Key Players in the Buying Process
• Buying center
• It is made up of individuals and units that
participate in the business decision making
process
• The buying center includes all members of
the organization who play any of the five
roles in the purchase decision process
Key Players in the Buying Process
• (5)Gate keepers .People in the organization’s
buying center who control the flow of
information to others .
• The marketer must learn who participates in
the decision ,each participant’s relative
influence and what evaluation criteria each
participant uses .
Key Players in the Buying Process
• Users – members of the organization who will
use the product or service .
• Influencers – people in the organization who
affect the buying decision . They often help
define specifications and provide information
for evaluating alternatives .
• Buyers – those who make an actual purchase .
• Deciders – those who have formal or informal
powers to select or approve the final suppliers
In routine buying ,the buyers are often the deciders .
Key Players in the Buying Process
• (5)Gate keepers .People in the organization’s
buying center who control the flow of
information to others .
• The marketer must learn who participates in
the decision ,each participant’s relative
influence and what evaluation criteria each
participant uses .
Organisational Buying Influences
Organisational Buying behavior
Influences
Environmental
Business buyers are influenced by
• The Economy – current and expected economic
conditions
– Demand, economic outlook, the cost of money
• Supply Conditions – supply of key materials
• Technology, Political and Competition developments
• Culture and Customs – can strongly influence the
buyers reactions to the marketers behavior and
strategies especially in international markets
Organisational Buying behavior
Influences
Organizational
• Objectives, Strategies , Structures, Systems and
procedures
Questions to be ask
– How many people are involved in the buying
center?
– Who are they
– What are their evaluating criteria
– What are the company’s policies and limits on its
buyers
Organisational Buying behavior
Influences
Interpersonal Factors
• They have special expertise
• They have special relationships with other
important participants
• The group dynamics
• They control rewards and punishments
Organisational Buying Influences

Individual
• Personal characteristics such as
– Age, education, professional identification,
personality, attitude
– Different buying styles
• some maybe too technical and make in-depth analyses
of competitive proposal
• Some maybe spontaneous negotiators who are skillful
at pitting sellers against one another for best deals
Organisational Buying Process
Organisational Buying Process
• Problem recognition
– Can result from internal or external stimuli
– Machine breakdown, new technology
• General need description
– For complex items buyer may need to engage
engineers, users, consultants to define the item
– Rank important factors ie price, durability, reliability
• Product specification
– Set technical product specifications by buying center
• Supplier search
Organisational Buying Process
• Product specification
– Set technical product specifications by buying center
– The buyer describes the general characteristics and
quantity of a needed item
• Supplier search
– The buyer tries to find the best suppliers or vendors
• Proposal solicitation
– The buyer invites qualified suppliers to submit proposals
Organisational Buying Process

• Supplier selection
– The buyer reviews proposals and selects a supplier or
supliers
• Order-routine specification
– the buyer writes the final order to the chosen supplier(s).
Listing technical specifications quantity needed, Expected
time for delivery, return policy and warranties
• Performance review
– Buyer assesses performance of the supplier and decides to
continue, modify or drop the arrangement

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