Chapter 6
Business Markets
And Buying Behavior
Objectives
• Become familiar with various types of
business markets
• Identify major characteristics of business
customers and transactions
• Understand several attributes of demand for
business products
• Become familiar with major components of a
buying center
• Describe industrial classification systems and
explain how they can be used to identify and
analyze business markets
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Business Market
Individuals or groups that purchase a
specific kind of product for resale, direct
use in producing other products, or use
in general daily operations (B2B).
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B2B Success
• Long-term mutually profitable relationships
• Co-develop products
• Timely exchanges at competitive prices
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Categories Of
Business Markets
1. Producer
2. Reseller
3. Government
4. Institutional
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Producer Market
Individuals and business organizations that
purchase products to make profits by using
them to produce other products or using
them in their operations.
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Number of Establishments
In Industry Groups
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Reseller Markets
Intermediaries that buy finished goods and
resell them for profit.
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Factors Considered When Making
Business Purchase Decisions
 Level of demand
 Space required relative to potential profit
 Ease of placing orders
 Availability of technical assistance
 Training programs from producers
 Competes or complements
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Government Markets
Federal, state, county, or local governments
that buy goods and services to support their
internal operations and provide products to
their constituencies.
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Institutional Markets
Organizations with charitable, educational,
community, or other nonbusiness goals.
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Dimensions
Of Marketing B2B
• Characteristics of transactions
• Attributes of customers
• Customer primary concerns
• Methods of buying
• Types of purchases
• Demand
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B2B Transaction Characteristics
• Larger
• Expensive
• Frequent replenishing
• Long-term agreement
• Discussions/negotiations
• Several decisionmakers
• Reciprocity
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Reciprocity
An arrangement unique to business
marketing in which two organizations
agree to buy from each other.
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B2B Customer Attributes
• Require detailed information
– Product features
– Technical specifications
• Personal goals influence decision
• Agents seek psychological satisfaction
– Advancement
– Financial rewards
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B2B Customers
Primary Concerns
• Price
• Quality
• Service
• Relationship
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Methods Of B2B Buying
• Description
• Inspection
• Sampling
• Negotiation
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Types Of B2B Purchases
• New-Task
• Straight Rebuy
• Modified Rebuy
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New-Task Purchase
An initial purchase by an organization of
an item to be used to perform a new job
or solve a new problem.
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Straight Rebuy Purchase
A routine purchase of the same products by
a business buyer.
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Modified Rebuy Purchase
A new-task purchase that is changed on
subsequent orders or when the requirement
of a straight rebuy purchase are modified.
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Business Product Demand
• Derived
• Inelastic
• Joint
• Fluctuating
US Economic Outlook
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Derived Demand
Demand for industrial products that stems
from demand for consumer products.
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Inelastic Demand
Demand that is not significantly altered by a
price increase or decrease.
Prices for Manufactured Goods
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Joint Demand
Demand involving the use of two or more
items in combination to produce a product.
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Fluctuating Demand
When demand for a business product is
derived by consumer demand, causing it
to fluctuate enormously
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Business Buying Decisions
• Buying Behavior
• Buying Center
• Stages of Process
• Influences
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Business (Organizational)
Buying Behavior
The purchase behavior of producers,
government units, institutions, and resellers.
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Buying Center
The people within an organization who make
business purchase decisions.
Purchasing Agent
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Business Buying Decision Process
And Factors That May Influence It
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Value Analysis
An evaluation of each component of a
potential purchase.
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Vendor Analysis
A formal, systematic evaluation of current
and potential vendors.
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Multiple Sourcing
An organization’s decision to use
several suppliers.
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Sole Sourcing
An organization’s decision to use only one
supplier.
Buyers select the sole source
option when...
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Using Industrial
Classification Systems
• Identifying Potential Business Customers
• Estimating Purchase Potential
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North American Industry
Classification System (NAICS)
An industry classification system that
generates comparable statistics among the
United States, Canada, and Mexico.
North American
Industry Classification System
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SIC/NAICS For Manufacturers Of
Magnetic And Optical Media
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Input-Output Data
Information that identifies what types of
industries purchase the products of a
particular industry.
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