BUSINESS BUYING BEHAVIOR

Sonam MhajanMahendra YadavMilan BirDevendra Singh

WHAT WILL WE LEARN IN THIS UNIT:-Types of Business Consumers

Buying Center

Buying Motives Of Business Buyers

What will we learn in this unit:-Business

Buying Process

Types Of Business Buying

Models for Market Segmentation

What is Business Market?

Business markets involve many more dollars and items do consumer markets.

Types of Decisions & the Decision Process

Types of Decisions & the Decision Process

Characteristics of Business MarketsCharacteristics of Business Markets

Market Structure and DemandMarket Structure and Demand

Nature of the Buying UnitNature of the Buying Unit

Market structure

and Demand

Fewer, Larger Buyers

Geographically

Concentrated

Derived Demand from

consumers

Inelastic Demand

Fluctuating Demand

Nature of the Buying Unit

More Buyers

More Professional Purchasing efforts

Types of decision & decision process

More complex

decisions

Process is more

formalized

Build close long-term

relationships

Buyer and seller are more dependent on

each other

Types of Business

Consumers

Participants in the Business BuyingProcess: The Buying Center

Buying Center

Buying Center

UsersGatekeepers

Deciders Influencers

Buyers

Marketing

Production and Operations

Research and Development

Role of Various Functional

Departments in Purchase Process

Buying Motives Of Business Buyers

Efficiency

Economy

Good QualitySimplicity

Sale ability

Buying Motives Of Business Buyers

Ease of Operation

Space Saving

ObsolescenceSafety

Cleanliness

Major Types of Buying Situations:-

The buyer routinely reorders something without any

modifications. Straight Re-buy

Modified Re-buy

New Task

The buyer wants to modify product specifications,

prices, terms, or suppliers.

The buyer purchases a product or service for the

first time.

Characteristics of theThree Types of Buying Decisions:-

Newness of Problem or Need

Information Requirements

Information Search

Consideration of New Alternatives

Multiple Buying Influence

Financial Risks

Straight

RebuyLow

Minimal

Minimal

None

Very Small

Low

Routine response

Modified

RebuyMedium

Moderate

Limited

Limited

Moderate

Moderate

Limited prob.

solving

New TaskHigh

Maximum

Extensive

Extensive

Large

High

Extended prob

solving

Stages in the BusinessBuying Process:-

Problem RecognitionProblem Recognition

General Need DescriptionGeneral Need Description

Product SpecificationProduct Specification

Supplier SearchSupplier Search

Proposal SolicitationProposal Solicitation

Supplier SelectionSupplier Selection

Order Routine SpecificationOrder Routine Specification

Performance ReviewPerformance Review

Types Of Business Buying:-

Competitive Tendering

Non-Tender Purchasing

Reverse Auction

Purchasing Card

Supply Chain Management

Major Influences on Business Buying:-

EnvironmentalEconomic, Technological, Political, Competitive & Cultural

EnvironmentalEconomic, Technological, Political, Competitive & Cultural

OrganizationalObjectives, Policies, Procedures,

Structure, & Systems

OrganizationalObjectives, Policies, Procedures,

Structure, & Systems

InterpersonalAuthority, Status, Empathy &

Persuasiveness

InterpersonalAuthority, Status, Empathy &

Persuasiveness

IndividualAge, Education, Job Position, Personality &

Risk Attitudes

IndividualAge, Education, Job Position, Personality &

Risk Attitudes

BuyersBuyers

Business Market

Segmentation

•Market Segment is a group of people or organizations sharing one or more characteristics that cause them to have similar product needs.

Why it needs?

•Sustainable Competitive Advantage.•‘What’ and ‘Why’ of segmentation.

CRITERIA FOR BUSINESS MARKET SEGMENTATION:-

Measurability

Sustainability

Models for Market Segmentation:-

Two-stage market segmentationNested Approach to segmentation

Two-stage market segmentation:-

Macro-segmentation

Micro-segmentation

Macro-segmentation:-

Organization size

Geographic Location

Industry Classificatio

n

Purchasing Situation

Two-stage market segmentation:-

Benefit Segmentatio

n

Type of institution

Customers’ business potential

Purchasing Strategies

Supply chain Position

Macro-segmentation:-Buying

decision criteria

Purchasing strategy

Structure of decision

making unit

Perceived importance of the product

Attitude towards the

supplier

Nested Approach to segmentation:-

Demographics

Operating variables

Purchasing Approaches

Situational factors

Buyers’ personal characteristics

What we learnt in this unit:-T

ypes of Business Consumers

Buying Center

Buying Motives Of Business Buyers

What we learnt in this unit:-

Business

Buying Process

Types Of Business Buying

Models for Market Segmentation