CHAPTER 7 BUSINESS MARKETS AND BUSINESS BUYER BEHAVIOR
Business buyer behavior: The buying behavior of the organizations that buy goods and services for
use in the production of other products and services or to resell or rent to others at a profit.
Characteristics of business markets
Market structure demand:
Far fewer but far larger buyers than consumer marketers.
Derived demand: Business demand that ultimately comes from the demand for consumer
Nature of the buying unit:
Compared to consumer purchases, B2B involves more decision participants and a more
professional purchasing effort.
Types of decisions and the decision process:
More complex buying decisions than consumer buyers.
Buyer and seller are more dependent on each other.
Supplier development: Systematic development of networks of supplier-partners to ensure
an appropriate and dependable supple of products and materials for use in making products
or reselling them to others.
Business buyer behavior
Major types of buying situations:
1. Straight rebuy: A business buying situation in which the buyer routinely reorders
something without any modifications.
2. Modified rebuy: A business buying situation in which the buyer wants to modify product
specifications, prices, terms, or suppliers.
3. New task: A business buying situation in which the buyer purchases a product or service
for the first time.
Systems selling (solutions selling): Buying a packaged solution to a problem from a
single seller, thus avoiding separate decisions involved in a complex buying
Buying centre: All the individuals and units that play a role in the purchase decision-making
Major influences on business buyers:
The buying process:
1. Problem recognition
2. General need description
3. Product specification
4. Supplier search
5. Proposal solicitation
6. Supplier selection
7. Order-routine specification
8. Performance review
Eprocurement: Purchasing through electronic connections between buyers and sellers, usually
Institutional and government markets
Institutional market: Schools,
CHAPTER 9 PRODUCTS SERVICES AND BRANDS: BUILDING CUSTOMER VALUE
Product: Anything that can be offered to a market for attention, acquisition, use, or consumption that
might satisfy a want or need.
Service: Any activity or benefit that one party can offer to another that is essentially intangible and
does not result in the ownership of anything.
2 Consumer products
Consumer products: A product bought by final consumers for personal consumption.
1. Convenience products: Product that customers usually buy frequently, immediately, and
with a minimum of comparison and buying effort. Ex: Candy, magazines.
2. Shopping products: Product that customer, in the process of selection and purchase,
usually compares on such bases as suitability, quality, price and style. Ex: hotel.
3. Specialty products: Product with unique characteristics or brand identification for which a
significant group of buyers is willing to make a special purchase effort. Ex: car brands.
4. Unsought products: Consumer products that the consumer either does not know about
or knows about but does not normally think of buying. Ex: life insurance.
Business product: A product bought by individuals and organizations for further processing or for
use in conducting a business.
1. Materials and parts (ex: livestock)
2. Capital items (ex: buildings)
3. Supplies and services (ex: operating supplies)
Social marketing: The use of commercial marketing concepts and tools in programs designed to
influence individuals behavior to improve their well-being and that of society.
Product and service decisions
3 Three levels: individual, product line, and product mix.
Product quality: The characteristics of a product or service that bear on its ability to satisfy stated or
implied customer needs.
Brand: A name, term, sign, symbol, design, or a combination of these that identifies the products or
services of one seller or group of sellers and differentiates them from those of competitors.
Packaging: The activities of designing and producing the container or wrapper for a product.
Product line decisions
Product line: A group of products that are closely related because they function in a similar manner,
are sold to the same customer groups, are marketed through the same types of outlets, or fall within
given price ranges.
Product mix decisions
Product mix (product portfolio): The set of all product lines and items that a particular seller offers
Width = # of product lines
Length = total # of products in lines
Depth = # of versions of each product in a line
Consistency = how closely related lines are in end use
Brand equity: The differential effect that knowing the brand name has on customer response to the
product or its marketing.
Brand positioning brand name selection brand sponsorship brand development
A manufacturer has four sponsorship options:
1. National/manufacturers brand
2. Private/store/distributor brand
3. Licensed brand
Store brand: Brand created and owned by a reseller of a product or service.