Business buyer behavior
The buying behavior of the organization that buy goods and services for use in the production of other products and services or to resell or rent them
Business buying process
The decision process by which business buyers determine
Derived demand
Business demand that ultimately comes from (derives from) the demand for consumer goods.
Supplier development
Systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others.
Straight rebuy
A business buying situation in which the buyer routinely reorders something without any modifications.
Modified rebuy
A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers.
New task
A business buying situation in which the buyer purchases a product or service for the first time.
Systems selling (or solutions selling)
Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.
Buying center
All the individuals and units that play a role in the purchase decision making process.
Users
Members of the buying organization who will actually use the purchased product or service.
Influencers
People in an organization's buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives.
Buyers
The people in the organization's buying center who make an actual purchase.
Deciders
People in the organization's buying center who have formal or informal power to select or approve the final suppliers.
Gatekeepers
People in the organization's buying center who control the flow of information to others.
Problem recognition
The first stage of the business buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good or a service.
General need description
The stage in the business buying process in which the company describes the general characteristics and quantity of a needed item.
Product specification
The stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item.
Supplier search
The stage of the business buying process in which the buyer tries to find the best vendors.
Proposal solicitation
The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.
Supplier selection
The stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers.
Supplier selection
The stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers.
Order-routine specification
The stage of the business buying process in which the buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties.
Performance review
The stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement.
E-procurement
Purchasing through electronic connections between buyers and sellers -- usually online.
Institutional market
Schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care.
Government market
Governmental units -- federal, state, and local -- that purchase or rent goods and services for carrying out the main functions of government.
Business to Business
mostly similar to consumer marketing, but have some differences;
ads & promotions are more technical;
do business directly with manufacturer;
deals usually involve reciprocity (sales go both ways)
Characteristics of Business Markets
Marketing structure and demand;
Nature of the buying unit;
Types of decisions
Marketing structure and demand
derived demand: based on another product (tires based on demand for new cars);
limited number of customers (one company may have a few or maybe a few thousand customers);
inelastic: little price fluctuation with demand
Nature of the buying unit
many people involved in the process: boss, user, purchasing agent, IT
Types of decisions
ROI on purchase:
better profit or better service;
may involve suppliers in solution
Business Buying Behavior
Buying Situations;
Participants;
Major Influences;
Business Buying Behavior: Buying Situations
Often push risk to supplier, Selling Systems
Business Buying Behavior: Participants
many people involved in the decision,
most difficult aspect of B2B marketing
Business Buying Behavior: Major Influences
environmental, culture, technical, decision makers, entertain
Business Buying Process
problem recognition;
general needs description;
product specification;
supplier search;
proposal solution;
supplier selection;
order routine specification (for repeat orders);
performance review
Business Buying on the Internet
largest area of growth in B2B;
78% of ebusiness is B2B;
advertising and publishing has dramatically shifted to internet;
example: Grainger
Institutional Markets
schools, prisons
Government Markets
huge market, with many procurement rules;
often prefer to buy from certain types of businesses (minority, woman-owned)
Marketing B to B
Trade Journals - 15% of marketing budget;
Sponsorships / Event Marketing;
Trade Shows (now only on web)