BUSINESS BUYER BEHAVIOR

Business Markets

^[5] Business markets are all the organisations that buy G&S to use them in production (or services) or for the purpose of supplying, renting or reselling. These include the industrial, reseller & institutional/govt markets. Business buyers determine which products are needed, find potential products & make an evaluation.

Market Structure And Demand

Business markets have far fewer but far larger buyers than consumer markets. There is more dependencies & a need for closer relationships. Demand is derived from consumer demand. Some markets are inelastic while some fluctuate more than consumer markets.

The Nature Of The Buying Unit

Business purchases involve more decision participants & a professional purchasing effort. Trained purchasing agents do most buying, so B2B marketers face a harder task.

Types of Decisions And Decision Processes

Business buyers face more complex buying decisions; they involve large sums of cash, technical & economic considerations & interaction among many people in different levels of the firm. This increases length of formalised purchasing decisions. Leasing instead of outright purchases is an option to conserve capital & get latest products (& tax advantages). Buyers/Sellers are more reliant upon one another. Must work closely with customers on all stages of the buying process (problems, solutions, after sale) for supplier development - the systematic development of networks of supplier-partners to ensure an appropriate & dependable supply. There is a reciprocity tendency in these direct purchases.

Business Buyer Behaviour

^[6] Markets want to know how business buyers respond to various marketing & external stimuli. Many firm’s prefer a complete solution from 1 seller instead of buying many goods & services from many sellers - Systems (Solution) Selling.

Main Types of Buying Situations

• Straight Re-buy - routinely re-order the same thing, suppliers maintain quality & try to create automatic reordering
• Modified Re-buy - modifies product specifications, price, terms or suppliers. More decision participants
• New Task - purchases a G/S for the 1st time. More decision participants

Participants in the Business Buying Process

The decision making unit of a buying organisation is the buying center. There are users, influencers, buyers (formal authority to select purchases), Deciders (approve the buyers), and gatekeepers (control flow of information).

Main Influences On Business Buying

• Environmental – economic, technological, political, competitive & social & cultural developments. E.g. GFC – Value
• Organisational – objectives, policies, procedures,