Chapter 6: Business Markets and Business Buyer Behavior

Objective 6-1 Define the business market and explain how business markets differ from consumer markets. Objective 6-2 Identify the major factors that influence business buyer behavior. Objective 6-3 List and define the steps in the business buying decision process. Objective 6-4 Discuss how online, mobile, and social media have changed business-to-business marketing. Objective 6-5 Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions.

Business buyer behavior

The buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others.

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 and brands.

Derived demand

Business demand that ultimately comes from (derives from) the demand for consumer goods. [6.1]

Supplier development

Systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others. [6.1]

Buyers

People in an organization’s buying center who make an actual purchase. [6.2]

Buying center

All the individuals and units that play a role in the purchase decision-making process. [6.2]

Deciders

People in an organization’s buying center who have formal or informal power to select or approve the final suppliers. [6.2]

Gatekeepers

People in an organization’s buying center who control the flow of information to others. [6.2]

Influencers

People in an organization’s buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives. [6.2]

Modified rebuy

A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers. [6.2]

New task

A business buying situation in which the buyer purchases a product or service for the first time. [6.2]

Straight rebuy

A business buying situation in which the buyer routinely reorders something without modifications. [6.2]

Systems selling (solutions selling)

(or solutions selling) Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation. [6.2]

Users

Members of the buying organization who will actually use the purchased product or service. [6.2]

General need description

The stage in the business buying process in which a buyer describes the general characteristics and quantity of a needed item. [6.3]

Order-routine specification

The stage of the business buying process in which the buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties. [6.3]

Performance review

The stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement. [6.3]

Problem recognition

The first stage of the business buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good or a service. [6.3]

Product specification

The stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item. [6.3]

Proposal solicitation

The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals. [6.3]

Supplier search

The stage of the business buying process in which the buyer tries to find the best vendors. [6.3]

Supplier selection

The stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers. [6.3]

B-to-B digital and social media marketing

Using digital and social media marketing approaches to engage business customers and manage customer relationships anywhere, anytime. [6.4]

E-procurement

Purchasing through electronic connections between buyers and sellers—usually online. [6.4]

Government Market

Governmental units—federal, state, and local—that purchase or rent goods and services for carrying out the main functions of government. [6.5]

Institutional Market

Schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care. [6.5]