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PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong

Chapter 6
Business Markets and Business Buyer Behavior
Copyright 1999 Prentice Hall

What is a Business Market?

The Business Market - all the organizations that buy goods and services to use in the production of other products and services that are sold, rented, or supplied to others.

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

Copyright 1999 Prentice Hall

Characteristics of Business Markets

Market Structure and Demand
Fewer, larger buyers Geographically concentrated Demand derived from consumers Inelastic demand Fluctuating demand

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Nature of the Buying Unit

More buyers More professional purchasing effort

Types of Decisions & the Decision Process

More complex decisions Process is more formalized Buyer and seller are more dependent on each other Build close long-term relationships with customers
Copyright 1999 Prentice Hall

Model of Business Buyer Behavior

Product
Price Place Promotion The Buying Organization
The Buying Center Buying Decision Process

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Marketing and Other Stimuli

Economic Technological Political Cultural

Organizational Influences

Interpersonal and Individual Influences

Product or Service Choice

Supplier Choice Order Quantities

Buyers Response

Delivery Terms and Times Service Terms

Payment
Copyright 1999 Prentice Hall

Business Buying Situations

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New Task Buying

Involved Decision Making

Modified Rebuy

Straight Rebuy
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Participants in the Business Buying Process: The Buying Center

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Gatekeepers

Users

Deciders

Buying Center
Buyers

Influencers

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Major Influences on Business Buying

Environmental
Economic, Technological, Political, Competitive & Cultural

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Organizational
Objectives, Policies, Procedures, Structure, & Systems

Interpersonal
Authority, Status, Empathy & Persuasiveness

Individual
Age, Education, Job Position, Personality & Risk Attitudes

Buyers

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Stages in the Business Buying Process

Problem Recognition General Need Description Product Specification
Supplier Search

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Proposal Solicitation Supplier Selection

Order Routine Specification Performance Review
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Institutional and Government Markets

Institutional Markets
Low Budgets Captive Patrons

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Government Markets
Specialized Buying Outside Publics Public Review Open Bids

Negotiated Contracts
Copyright 1999 Prentice Hall