Chapter 6
Business Markets and Business Buyer Behavior
Learning Objectives
1. Define the business market and explain how business markets differ from
consumer markets.
2. Identify the major factors that influence bu
...
Chapter 6
Business Markets and Business Buyer Behavior
Learning Objectives
1. Define the business market and explain how business markets differ from
consumer markets.
2. Identify the major factors that influence business buyer behavior.
3. List and define the steps in the business buying-decision process.
4. Compare the institutional and government markets and explain how institutional
and government buyers make their buying decisions.
Chapter Overview
The business market is huge. In Asia, it consists of millions of organizations that buy
trillions of dollars worth of goods and services each year. In many ways business
markets are like consumer markets, but in many other ways they are much different.
Points of comparison can be in areas of market structure and demand, the nature of the
buying unit, the types of decisions, and the decision process involved.
It can be observed that business markets usually have fewer but larger (volume) buyers
who are more geographically concentrated and use more rational methods for making
their purchasing decisions. In addition, there are usually more individuals involved in
the business buying decision (for example, purchasing by committee). These
professional buyers are also usually better trained and skilled at negotiation than their
counterpart consumer buyers. Difficulties arise because business buying decisions are
often very complex, lengthier, and more formal in nature. The seller must
accommodate and adjust to these characteristics if success in this market is to be
obtained.
The chapter explores a variety of models that explain the business buying process.
These models are excellent ways to show the main points of the business buying
process as compared to those of the consumer buying process mentioned above. It
should be remembered that four key questions must be answered before the business
market is pursued by the firm’s marketing efforts. What buying decisions do business
buyers make? Who participates in the buying process? What are the major influences
on buyers? How do business buyers make their buying decisions?
During the past few years, incredible advances in information technology have changed
the face of the business-to-business marketing process. Increasingly, business buyers
are purchasing all kinds of products and services electronically, either through
electronic data interchange links or on the Internet. The chapter discusses how the “epurchasing” process works for the business-to-business market and details the benefits
shared by exchange partners. The process is, however, not without drawbacks. A
challenge for managers will be to increase the benefits and decrease the drawbacks, to
link their organizations to cyber-networks, and to create new models that will work in
the new Internet age.Chapter 6: Business Markets and Business Buyer Behavior
111
The chapter concludes with an examination of two unique non-business markets—
institutional and government markets. These markets have additional characteristics
and needs. The special features of each are examined.
Chapter Outline
1. Introduction
a. Over the years, Ikea has grown to become one of the world’s largest
furniture retailer.
b. Ikea relies on about 1,800 suppliers in over 50 countries to stock its
shelves, andat the rate the company is growing, it will need to double its
supply network by 2010.
c. In one way or another, most large companies sell to other organizations.
d. Business buyer behavior refers to the buying behavior of the
organizations that buy goods and services for use in the production of
other products and services that are sold, rented, or supplied to others. It
also includes the behavior of retailing and wholesaling firms that acquire
goods for the purpose of reselling or renting them to others at a profit.
e. In the business buying process, business buyers determine which
products and services their organizations need to purchase, and then
find, evaluate, and choose among alternative suppliers and brands.
f. Business-to-business marketers must do their best to understand
business markets and business buyer behavior.
Use Key Terms Business Buyer Behavior, Business Buying Process here.
2. Business Markets
a. The business market is huge. In fact, business markets involve far more
dollars and items than do consumer markets.
Market Structure and Deman
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