BusinessMarketsandBusinessBuyerBehaviorChapter77-1Objectives•Beabletodefinethebusinessmarketandexplainhowbusinessmarketsdifferfromconsumermarkets.•Knowthemajorfactorsthatinfluencebusinessbuyerbehavior.7-2Objectives•Understandthestepsinthebusinessbuyingdecisionprocess.•Understandinstitutionalandgovernmentmarketsandhowbuyersinthesemarketsmaketheirbuyingdecisions.7-3•Sellsjetsexclusivelyforcorporateuse•300–500customersworldwide•Rational,objective,andhumanfactorsinfluencebusinessbuyer’sdecisions•Multiplepeopleareinvolvedinthedecision•BuyinginfluencesincludetheCEO,pilot,boardmembers,evenspouses•CompanyhasbeenhighlysuccessfulGulfstreamAerospaceCaseStudy7-4Definition•BusinessBuyerBehavior:Thebuyingbehavioroforganizationsthatbuygoodsandservicesforuseintheproductionofotherproductsandservicesorforthepurposeofresellingorrentingthemtoothersataprofit.7-5•CharacteristicsofBusinessMarketsSalesinthebusinessmarketfarexceedsalesinconsumermarkets.Businessmarketsdifferfromconsumermarketsinmanyways.MarketingstructureanddemandNatureofthebuyingunitTypesofdecisionsandthedecisionprocessBusinessMarkets7-6BusinessMarkets•MarketingStructureandDemand•NatureoftheBuyingUnit•TypesofDecisionsandtheDecisionProcess•Comparedtoconsumermarkets:BusinessmarketshavefewerbutlargercustomersBusinesscustomersaremoregeographicallyconcentratedDemandisdifferentDemandisderivedDemandispriceinelasticDemandfluctuatesmore,andchangesmorequicklyCharacteristics7-7BusinessMarkets•MarketingStructureandDemand•NatureoftheBuyingUnit•TypesofDecisionsandtheDecisionProcess•Comparedtoconsumerpurchases:Businesspurchasesinvolvemorebuyersinthedecisionprocess.Purchasingeffortsareundertakenbyprofessionalbuyers.Characteristics7-8BusinessMarkets•MarketingStructureandDemand•NatureoftheBuyingUnit•TypesofDecisionsandtheDecisionProcess•Comparedtoconsumerpurchases:Businessbuyersfacemorecomplexbuyingdecisions.Thebuyingprocessismoreformalized.Buyersandsellersworkmorecloselytogetherandbuildlong-termrelationships.Characteristics7-9•MajorTypesofBuyingSituationsStraightrebuyReorderingwithoutmodificationModifiedrebuyRequiresmodificationtopriorpurchaseNewtaskFirst-timepurchaseBusinessBuyerBehavior7-10•SystemsSelling:Buyingapackagedsolutiontoaproblemfromasingleseller.ConvenienceisamajorbenefitOftenakeymarketingstrategyforbusinessesseekingtowinandholdaccounts.BusinessBuyerBehavior7-11ParticipantsintheBusinessBuyingProcessBusinessBuyerBehavior•Users•Buyers•Influencers•Deciders•Gatekeepers7-12MajorInfluencesonBusinessBuyers•Environmental•Organizational•Interpersonal•Individual•Economictrends•Supplyconditions•Technologicalchange•Regulatoryandpoliticalenvironments•Competitivedevelopments•CultureandcustomsKeyFactors7-13MajorInfluencesonBusinessBuyers•Environmental•Organizational•Interpersonal•Individual•Objectives•Policies•Procedures•Organizationalstructure•SystemsKeyFactors7-14MajorInfluencesonBusinessBuyers•Environmental•Organizational•Interpersonal•Individual•Authority•Status•Empathy•PersuasivenessKeyFactors7-15MajorInfluencesonBusinessBuyers•Environmental•Organizational•Interpersonal•Individual•Authority•Age•Education•Jobposition•Personality•RiskattitudesKeyFactors7-16•EightStages:Stage1:ProblemRecognitionStage2:GeneralNeedDescriptionStage3:ProductSpecificationValueanalysishelpstoreducecostsStage4:SupplierSearchSupplierdevelopmentBusinessBuyingProcess7-17•EightStages:Stage5:ProposalSolicitationStage6:SupplierSelectionStage7:Order-RoutineSpecificationBlanketcontractsareoftenusedformaintenance,repairandoperatingitems.Stage8:PerformanceReviewBusinessBuyingProcess7-18•BusinessBuyingontheInternetE-procurementisgrowingrapidly.Reverseauctionsaccountformuchoftheonlinepurchasingactivity.E-procurementoffersmanybenefits:AccesstonewsuppliersLowerpurchasingcostsQuickerorderprocessinganddeliveryBusinessBuyingProcess7-19•InstitutionalMarketsConsistofchurches,schools,prisons,hospitals,nursinghomesandotherinstitutionsthatprovidegoodsandservicestopeopleintheircare.InstitutionalandGovernmentMarkets7-20•InstitutionalMarketsOftencharacterizedbylowbudgetsandcaptivepatrons.Marketersmaydevelopseparatedivisionsandmarketingmixestoserviceinstitutionalmarkets.InstitutionalandGovernmentMarkets7-21•GovernmentMarketsGovernmentalunits–federal,state,andlocal–thatpurchaseorrentgoodsandservicesforcarryingoutthemainfunctionsofgovernment.InstitutionalandGovernmentMarkets7-22•GovernmentMarketsMorethan82,000buyingunits.Requiresupplierstosubmitbids.Favordomesticsuppliers.Extensivepaperworkisrequiredfromsuppliers.InstitutionalandGovernmentMarkets7-23•GovernmentMarketsGovernmentbuyersoftenfavor:DepressedbusinessfirmsandareasSmallbusinessesMinority-ownedbusinessesFirmswhichpracticenon-discriminatorypracticesInstitutionalandGovernmentMarkets7-24•GovernmentMarketsMostfirmsthatselltogovernmentbuyersarenotmarketingoriented.Somecompanieshaveseparategovernmentmarketingdepartments.Muchofgovernmentbuyinghasmigratedonline.InstitutionalandGovernmentMarkets