Transcript Business Buyer Behav..

Business Markets and
Buying Behavior
Professor Chip Besio
Cox School of Business
Southern Methodist University
Business-to-Business
Marketing
Sales to businesses rather than consumers
Example: Dell
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Business-to-Business - sale of a personal
computer to be used in an office environment
Consumer Marketing - sale of a personal
computer for use by a student while at college
WHAT ARE
BUSINESS MARKETS
Business Market - all organizations
that buy goods and services to use in
the production of other products and
services that are sold, rented, or
supplied to others
Business markets involve many more
dollars and items do consumer markets
THE NATURE AND SIZE OF
ORGANIZATIONAL MARKETS
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Business Marketing
Industrial Markets (Industrial Firms)
Reseller Markets (Resellers)
Government Markets (Government Units)
Global Organizational Markets
Slide 6-6
CHARACTERISTICS OF
ORGANIZATIONAL MARKETS
Few, large buyers
Geographically concentrated
Derived demand - comes from
consumers at the end of the channel
Inelastic demand
TYPE AND NUMBER OF ORGANIZATIONIAL
CUSTOMERS IN THE U.S.
Slide 6-7
MEASURING DOMESTIC AND GLOBAL
INDUSTRIAL, RESELLER, AND
GOVERNMENT MARKETS
• North American
Industry
Classification
System (NAICS)
• North American
Product
Classification
System (NAPCS)
Slide 6-9
NAICS breakdown for information industries
sector: NAICS code 51 (abbreviated)
Key characteristics of organizational buying
behavior
Key Organizational Buying Criteria
Comparing consumer and organizational
purchases
Organizational Markets
Consumer Markets
Nature of the Buying Unit
Nature of the Buying Unit
• More participants in the purchase
• Professional purchasing effort
Types of Decisions &
Decision Process
• More complex decisions
• Often higher risk; more at stake
• Process is more formalized
• Buyer/seller depend on one another
• Build close long-term relationships
with customers
Marketing Mix
• Predominantly sales force
• Price is often negotiated
• Advertising and other
communications are frequently
technical
Source: Adapted fromPrentice Hall
• Few participants in the purchase
• “Amateur” purchasing effort
Types of Decisions &
Decision Process
• Simpler decisions
• Usually limited risk
• No formal info search or decision
• Buyer and seller have limited interface
• Psychology can be important
Marketing Mix
• Mostly mass communications
• Price is fixed
• Advertising is emotional or rational;
reminder, persuasive, comparative,
or awareness
Comparing the stages in consumer and
organizational purchases
CHARACTERISTICS OF
ORGANIZATIONAL BUYING
• The Buying Center: A Cross-Functional
Group
 Buying Center
 Buying Committee
 People in the Buying Center
CHARACTERISTICS OF
ORGANIZATIONAL BUYING
• The Buying Center: A Cross-Functional
Group
 Roles in the Buying Center
• Users
• Deciders
• Influencers
• Gatekeepers
• Buyers
Slide 6-22
Participants in the Business Buying
Process
Gatekeepers
Deciders
Users
Buying
Center
Buyers
Source: Prentice Hall
Influencers
Segmentation variables and breakdowns
for U.S. organizational markets
Business Buying Situations
Involved Decision
Making
New Task Buying
Modified Rebuy
Straight Rebuy
How the buying situation affects
buying center behavior
Business Buying Situations
New Buy
(Rarest, most complex type)
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Big buying unit
Many people involved
Lots of indirect influence
Slower-than-usual processes
High risk
Buying unit gathers and weighs lots of information
Anyone can win
Performance matters (price not always as much)
Business Buying Situations
Straight Rebuy
(Most common, most simple)
Small buying unit (generally one person)
Low perceived risk
So long as quality is acceptable …
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"In supplier” wins
"Out suppliers" can’t get an appointment
“Out supplier” salespeople must wait for "in
supplier" to fail or requirements to change
Business Buying Situations
Modfied Rebuy
A window of opportunity for other suppliers
An "aging" new task or a "rejuvenated"
straight re-buy
Compared to straight
Compared to new buy:
re-buy:
 Smaller buying unit
 More rapid decision
•Larger buying unit
 Less risk
•Slower decision
 Performance and price
•More risk
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considered
GOING ONLINE
NAVIGATING THE NAICS
Slide 6-42
Going Online
1. What is the three-digit industry
subsector code for food
manufacturing?
Going Online
2. What is the six-digit U.S. code for dog
and cat food manufacturing?
Slide 6-44
Going Online
3. How many establishments and what is
the value of shipments sold by the
U.S. dog and cat food manufacturing
industry based on the latest
government statistics?
Slide 6-45