1. ANALYZING BUSINESS MARKETS AND BUSINESS BUYING BEHAVIORS
CHAPTER 7
ANALYZING BUSINESS MARKETS AND BUSINESS BUYING BEHAVIORS

2. BUSINESS-TO-BUSINESS MARKET
Business-to-Business Consumer
Market Market
1. Businesses
2. Government/Military
3. Institutions
Business
Business
Consumers

3. ORGANIZATIONAL BUYING
Business vs. Consumer Market:
Mrk.Characteristics Consumer Business
Number of buyers Many Few
Size of Buyers Small Large
Supplier Relations No Close
Concentration No Yes
Demand Unpredictable Derived
Demand Elastic Inelastic

4. ORGANIZATIONAL BUYING (CONT.)
Mrk.Characteristics Consumer Business
Demand Normal Fluctuating
Professional Purchasing No Yes
Purchasing Middlemen Direct
Buying Influence No Yes
Reciprocity No Yes
Leasing Some Heavy

5. BUYING SITUATION (A)New Task (B)Modified Re-buy (C)Straight Re-buy
Buy-grid Model
(A) (B) (C)
Problem recognition Yes Maybe No
Need Description Yes Maybe No
Product Specification Yes Yes Yes

6. BUYING SITUATION (CONT.)
Buy-grid model (cont.)
(A) (B) (C)
Supplier search Yes Maybe No
Proposal solicitation Yes Maybe No
Supplier selection Yes Maybe No
Supplier selection Yes Maybe No
Order-routine Spec Yes Maybe No
Performance Review Yes Yes Yes

7. PARTICIPATION IN BUSINESS BUYING
System Buying/Selling:
System contracting:
Single supply source provides the entire requirement of MRO.
Large scale projects such as dams, refineries, steel factories.
Buying Centers:
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers

8. PARTICIPANTS IN THE BUSINESS BUYING(CONT.)
Major Influences In Business Buying:
Environmental factors:
Demand
economic outlook
interest rate
Technology
political life
Competition
social responsibility;

9. PARTICIPANTS IN THE BUSINESS BUYING (CONT.)
Major Influences in Business Buying (cont.):
Organizational factors:
Purchasing department upgrading..
Cross-functional roles.
Centralized purchasing.
Decentralized purchasing for small ticket items.
Internet purchasing.
Long term contract.
Purchasing-performance evaluation.
Lean production-high quality and JIT inventory planning.
Interpersonal factors:
Interest, authority, status, empathy and persuasiveness.
Individual factors:
Age,income, education, job position, personality,risk attitudes
Cultural factors