Chapter 7: Business Markets And Business Buyer Behavior

Front 1

Describe business buying behavior.

Back 1

Business buying behavior: the buying behavior of the organizations that buy goods and services for use in the production of other products and services or to resell or rent them to others at a profit

Front 2

Describe business buying process.

Back 2

Business buying process: the decision process by which business buyers determine which products and services their organizations need to purchase

Front 3

What are the characteristics of business markets?

Back 3

Market structure and demand:o Business markets contain fewer but larger buyerso Business buyer demand is derived from final consumer demando Demand in many business markets is more inelastic – not affected as much in the short run by price changeso Demand in business markets fluctuates more, and more quicklyNature of the buying unit:o Business purchases involve more buyerso Business buying involves a more professional purchasing effortTypes of decisions and the decision process:o Business buyers usually face more complex buying decisionso The business buying process is more formalizedo In business buying, buyers and sellers work more closely together and build close long-term relationships

Front 4

Which two parts are involved in the buying activity?

Back 4

1. The buying center2. The buying process

Front 5

List the three major types of buying situations.

Back 5

1. Straight rebuy: o A business buying situation in which the buyer routinely reorders something without any modifications2. Modified rebuy: o A business buying situation in which the buyer wants to modify product specifications, prices, terms or suppliers3. New-task:o A business buying situation in which the buyer purchases a product or service for the first time

Front 6

Name the participants in the business buying process.

Back 6

Users:o Members of the buying organization who will use the product or serviceInfluencers:o People in an organization’s buying center who affect the buying decision; they will often help define specifications and also provide information for evaluating alternativesBuyers: o Members of the buying organization who make a purchase Deciders:o People in an organization’s buying center who have formal or informal power to select or approve the final suppliersGatekeepers:o People who control the flow of information to others

Front 7

What are the major influences on business buyers?

Back 7

Not only financial, but also personal.- Environmental factors- Organizational factors- Interpersonal factors- Individual factors

Front 8

Explain the business buying process.

Back 8

1. Problem recognition: someone in the company recognizes a problem or need that can be met by acquiring a good or service2. General need description: the company describes the characteristics and quantity of the needed item3. Product specification4. Supplier search: to find the best vendor5. Proposal solicitation the buyer invites qualified suppliers to submit proposals6. Supplier selection7. Performance review: the buyer reviews supplier performance

Front 9

What is e-procurement?

Back 9

E-procurement: purchasing through electric connections between buyers and sellers – usually online

Front 10

What is an institutional market?

Back 10

Institutional market: schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care

Front 11

What is a government market?

Back 11

Government markets: government units – national, regional and local – that purchase or rent goods and services for carrying out the main functions of government