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22 Cards in this Set
- Front
- Back
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Business 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 |
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Business Markets |
comprises of all 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 a profit |
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Business Market Structure |
Few but larger buyers Derived demand- demand derives from the demand for consumer goods Inelastic and more fluctuating demand |
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Characteristics of business markets |
Buyer and seller dependency Involves more decisions participants and a more professional purchasing effort More complex Longer and more formalized |
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Supplier development |
Many customer companies are now practicing supplier development:
Systematically developing networks of supplier-partners to ensure a dependable supply of products and materials that they use in making their own products or reselling to others |
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Major types of buying situations |
Straight rebuy- routine purchase decision such as a reorder without any modifications Modified rebuy- buyer wants to modify product specifications, prices, terms, or suppliers (requires some search) New task- a company buying a product for the first time |
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Systems selling (solutions selling) |
Many business buyers prefer to buy a complete solution to a problem from a singe seller rather than buying separate products and services from several suppliers and putting them together (supplier development) |
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Buying center |
The decision-making unit of a buying organization |
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Participants in the business buying process |
Users- members of the organization who will use the product or service Influencers- help define specifications and also provide info for evaluating alternatives **Buyers- have formal authority to select the supplier and arrange terms of purchase **Deciders- have formal and informal power to select or approve the final suppliers Gatekeepers- control the flow of info |
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Major influences on business buyer behavior |
Environmental- the economy, supply conditions, technology, politics/regulation, competition, culture/customs Organizational- Objectives, strategies, structure, systems, procedures Interpersonal- influence, expertise, authority, dynamics Individual- age, job position, motives, personality, preferences, buying style |
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Business buying process (definition) |
Business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands |
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Business buying process (steps) |
1) Problem recognition 2) General needs Description 3) Product specification 4) Supplier search 5) Proposal solicitation 6) Supplier selection 7) Order-routine specification 8) Performance review |
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Problem recognition |
Recognizing a problem or need that can be met by acquiring a specific product or service
Can result from internal stimuli (need for new product or production equipment) or external stimuli (idea from a trade show or advertising) |
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General needs description |
describes the characteristics and quantity of the needed item |
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Product specification |
describes the technical criteria |
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Supplier search |
involves compiling a list of qualified suppliers |
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Proposal solicitation |
process of requesting proposals from qualified suppliers |
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Supplier selection |
the members of the buying center review the proposals and select supplier(s) |
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Order-routine specification |
includes the final order with the chosen supplier or suppliers and lists all of the specifications and terms of the purchase |
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Performance review |
when the supplier's performance is reviewed |
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Institutional markets |
consists of schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care
characteristics: low budgets "captive" audience |
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Government markets |
--tend to favor domestic suppliers, require suppliers to submit bids, and normally award to the lowest bidder --affected by environmental, organizational, interpersonal, and individual factors --asked to favor depressed firms and areas, small businesses, minority owned businesses, and firms that avoid discrimination |
