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CHAPTER 7 ANALYZING BUSINESS MARKETS AND BUSINESS BUYING BEHAVIORS.

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Presentation on theme: "CHAPTER 7 ANALYZING BUSINESS MARKETS AND BUSINESS BUYING BEHAVIORS."— Presentation transcript:

1 CHAPTER 7 ANALYZING BUSINESS MARKETS AND BUSINESS BUYING BEHAVIORS

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

3 ORGANIZATIONAL BUYING n 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 n (A)New Task n (B)Modified Re-buy n (C)Straight Re-buy Buy-grid Model Buy-grid Model (A) (B) (C) (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.) Buy-grid model (cont.) (A) (B) (C) (A) (B) (C) Supplier search Yes Maybe No Proposal solicitation Yes Maybe No Supplier selection Yes Maybe No Proposal solicitation Yes Maybe No Supplier selection Yes Maybe No Order-routine Spec. Yes Maybe No Performance Review Yes Yes Yes

7 PARTICIPATION IN BUSINESS BUYING n System Buying/Selling: »System contracting: n Single supply source provides the entire requirement of MRO. »Large scale projects such as dams, refineries, steel factories. n Buying Centers: 1.Initiators 2.Users 3.Influencers 4.Deciders 5.Approvers 6.Buyers 7.Gatekeepers

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

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


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