Business Mkts and Bus Buyer Behavior

BUSINESS MARKETS AND BUSINESS BUYER BEHAVIOR

I. BUSINESS MARKETS

All the organizations that buy goods and services to use in the production of other products and services or for the purpose of reselling or renting them to others at a profit. In the business buying process, business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose form among the alternative suppliers and brands.

Characteristics of business markets

In some ways it is quite similar to consumer market, both involve people who assume buying roles and make purchase decisions to satisfy needs. The main differences are in terms of

• Market structure and demand

• Nature of the buying unit

• Types of decsions and the decision process involved

a. Market structure and demand

The business marketer normally deals with fewer but far larger buyers.

Business customers are more geographically concentrated.

Business buyer demand is derived from final consumer demand.

Demand in many business markets is more inelastic – not affected as much in the short run by price changes.

Demand in business market has larger and more frequent fluctuations.

b. Nature of the buying unit

Business purchases involve more buyers.

Business buying involves a more professional purchasing effort.

c. Types of decisions and the decisions and the decision process

Business buyers usually face more complex buying decisions.

The business buying process is more formalized.

In business buying, buyers and sellers work more closely together and build close, long run relationships.

A model of business buyer behavior

In this model, marketing and other stimuli affect the buying organization and produce certain buyer responses. As with consumer buying, the marketing stimuli for business buying consist of the four Ps: product, price, place, and promotion. Other stimuli include...