1. Business Markets and Buying Behavior
Professor Chip Besio
Cox School of Business
Southern Methodist University

2. Business-to-Business Marketing
Sales to businesses rather than consumers
Example: IBM
Business-to-Business - sale of a personal computer to be used in an office environment
Consumer Marketing - sale of a personal computer for use by a student while at college

3. What is a Business Market?
Business Market - all organizations that buy goods and services to use in the production of other products and services that are sold, rented, or supplied to others
Business markets involve many more dollars and items do consumer markets

4. Characteristics of Business Markets
Few, large buyers
Geographically concentrated
Derived demand - comes from consumers at the end of the channel
Inelastic demand

5. Business Markets vs. Consumer Markets
Nature of the Buying Unit
More participants in the purchase
Professional purchasing effort
Few participants in the purchase
“Amateur” purchasing effort
Types of Decisions &
Decision Process
More complex decisions
Often higher risk; more at stake
Process is more formalized
Buyer/seller depend on one another
Build close long-term relationships
with customers
Simpler decisions
Usually limited risk
No formal info search or decision
Buyer and seller have limited interface
Psychology can be important
Marketing Mix
Predominantly sales force
Price is often negotiated
Advertising and other communications are frequently technical
Mostly mass communications
Price is fixed
Advertising is emotional or rational; reminder, persuasive, comparative, or awareness
Source: Adapted fromPrentice Hall

6. Model of Business Buyer Behavior
Marketing and
Other Stimuli
Product
Price
Place
Promotion
Economic
Technological
Political
Cultural
The Buying Organization
Interpersonal and Individual Influences
The Buying Center
Organizational Influences
Buying Decision
Process
Buyer’s Response
Delivery Terms and Times
Service Terms
Payment
Product or Service Choice
Supplier Choice
Order Quantities
Source: Prentice Hall

7. Participants in the Business Buying Process
Gatekeepers
Users
Buying
Center
Deciders
Influencers
Buyers
Source: Prentice Hall

8. Business Buying Situations
New Task Buying
Modified Rebuy
Involved Decision
Making
Straight Rebuy

9. Business Buying Situations NEW BUY
(Rarest, most complex type)
Big buying unit
Many people involved
Lots of indirect influence
Slower-than-usual processes
High risk
Buying unit gathers and weighs lots of information
Anyone can win
Performance matters (price not always as much)

10. Business Buying Situations STRAIGHT REBUY
(Most common, most simple)
Small buying unit (generally one person)
Low perceived risk
So long as quality is acceptable …
"In supplier” wins
"Out suppliers" can’t get an appointment
“Out supplier” salespeople must wait for "in supplier" to fail or requirements to change

11. Business Buying Situations MODIFIED RE-BUY
A window of opportunity for other suppliers
An "aging" new task or a "rejuvenated" straight re-buy
Compared to new buy:
Smaller buying unit
More rapid decision
Less risk
Performance and price
considered
Compared to straight re-buy:
Larger buying unit
Slower decision
More risk