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 and services or to resell or rent to others at a profit.
Business Buying Process: The decision process by which business buyers determine
which products and services their organizations need to purchase, and then find, evaluate
and choose among alternative suppliers. (Business-to-Business (B2B) Marketers)
1) Business Markets
- Involve far more dollars and items than do consumer markets.
Characteristics of business markets
Market Structure and Demand
- Business markets contain fewer but larger buyers
- Business buyer demand is derived from the final consumer
o Marketing efforts often directed towards final consumer
- Demand in many business markets is more inelastic (not affected by short run price
- Demand Fluctuates more and more quickly.
o Small percentage increase in consumer (10%) can cause huge rise in
business demand (200%)
Nature of the Buying Unit
- Business purchases involve more buyers
- Business buying involves a more professional purchasing effort
o Committees made up of experts used in decisions.
Types of Decisions and the decision process
- Business buyers usually face more complex buying decisions
o More money, complex technical and economical & social interactions
- Buying Process is more formalized
- Buyers and sellers work more closely together and build close, long-term
o Supplier Development: Systematic development of networks of suppliers-
partners to ensure an appropriate and dependable supply of products and
materials for use in making products or reselling them to others.
2) Business Buyer Behavior
(Copy Model) p.219 Major Types of Buying Situations
Straight Rebuy: A business buying situation in which the buyer routinely reorders
something without modifications.
- In suppliers: Try to maintain service and quality making process easier and more
- Out suppliers: Find new ways to add value or exploit dissatisfaction to gain
Modified Rebuy: A business situation in which the buyer wants to modify product
specifications, prices, terms or suppliers (Involves more participants)
- In suppliers: Put their best foot forward to protect and account
- Out suppliers: Use opportunity to make a better offer and gain business
New Task: A business buying situation in which the buyer purchases a product or service
for the first time.
- The buyer makes the fewest decisions in a straight rebuy and the most in a new task
- Sales often go to the company providing the most complete system
o Systems selling (Solutions selling): Buying a packaged solution to a
problem from a single seller, thus, avoiding all the separate decisions
involved in a complex buying decision.
Participants in a Business buying Process
Buying Centre: All the individuals and units that play a key role in the purchase decision-
making process. The decision-making unit of an organization.
- Users: Members of the organization who will actually use the purchased product or
- Influencers: People in an organization who affect the buying decision; they often
help define specifications and also provide information for evaluating alternatives.
- Buyers: People in the organization’s buying centre who make an actual purchase
- Deciders: People in the organizations buying centre who have the formal power to
select or appro