1. Chapter 8 Analyzing Business Markets and Business Buying Behavior by
PowerPoint by
Milton M. Pressley
University of New Orleans

2. Kotler on Marketing
Many businesses are wisely turning their suppliers and distributors into valued partners.

3. Chapter Objectives In this chapter, we focus on six questions:
What is the business market, and how does it differ from the consumer market?
What buying situations do organizational buyers face?
Who participates in the business buying process?
What are the major influences on organizational buyers?
How do business buyers make their decisions?
How do institutions and government agencies do their buying?

4. What is Organizational Buying?
The business market versus the consumer market
Business market
Fewer buyers
Larger buyers
Close supplier-customer relationship
Geographically concentrated buyers

5. What is Organizational Buying?
Derived demand
Inelastic demand
Fluctuating demand
Professional purchasing

6. What is Organizational Buying?
Several buying influences
Multiple sales calls
Directed purchasing
Reciprocity
Leasing

7. What is Organizational Buying?
Buying Situations
Straight rebuy
Modified rebuy
New Task
Systems Buying and Selling
Systems buying
Turnkey solution
Systems selling

8. Discussion Question
What are some of the benefits to an organization that can be derived from a single source solution, or a systems buying arrangement with a prime contractor? What are some of the potential pitfalls? What can the company do to protect itself from these hazards?

9. Participants in the Business Buying Process
The Buying Center
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
Key buying influencers
Multilevel in-depth selling

10. Major Influences on Buying Decisions
Interpersonal and Individual Factors
Cultural Factors
France
Germany
Japan
Korea
Latin America

11. The Purchasing/ Procurement Process
Incentive to purchase
Three Company Purchasing Orientations
Buying Orientation
Commoditization
Multisourcing
Procurement Orientation
Materials requirement planning (MRP)
Supply Chain Management Orientation

12. Table 8.1: Buygrid Framework: Major Stages (Buyphases) of the Industrial Buying Process in Relation to Major Buying Situations (Buyclasses)
Buyclasses
New
Modified
Straight
Task
Rebuy
1. Problem recognition
Yes
Maybe No
2. General need description
3. Product specification
Buyphases
4. Supplier search
5. Proposal solicitation
6. Supplier selection
7. Order-routine specification
8. Performance review

13. The Purchasing/ Procurement Process
General Need Description and Product Specification
Product value analysis
Supplier Search
Vertical hubs
Functional hubs
Direct extranet links to major suppliers
Buying alliances
Company buying sites
Request for proposals (RFPs)

14. Table 8-2: An Example of Vendor Analysis
Attributes
Rating Scale
Importance
Weights
Poor
(1)
Fair
(2)
Good
(3)
Excellent
(4)
Price
.30 x
Supplier reputation
.20
Product reliability
Service reliability
.10
Supplier Flexibility
Total score: .30(4) + .20(3) + .30(4) + .10(2) + .10(3) = 3.5

15. The Purchasing/ Procurement Process
Customer value assessment
Routine-order products
Procedural-problem products
Political-problem products
Order-Routine Specification
Blanket contract
Stockless purchase plans
Performance Review
Buyflow map