1. Marketing Stephan Langdon, MBA, M.Ed.

2. Week 6

3. Business Markets and Business Buying Behavior Business Markets Business Buyer Behavior The Business Buying Process E-Procurement: Buying on the Internet Institutional and Government Markets Topic Outline

4. Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in production of other products and services that are sold, rented, or supplied to others. Business buying process is the process where business buyers determine which products and services are needed to purchase, and then find, evaluate, and choose among alternative brands Business Markets

5. Business Markets

6. One main difference between business markets and consumer markets is ____________. market demand nature of the buying unit types of decisions all of the above

7. One main difference between business markets and consumer markets is ____________. market demand nature of the buying unit types of decisions all of the above

8. Business Markets Market Structure and Demand

9. ________ is demand that ultimately comes from the demand for consumer goods. Consumer demand Marketing demand Derived demand B2B demand

10. ________ is demand that ultimately comes from the demand for consumer goods. Consumer demand Marketing demand Derived demand B2B demand

11. Business Markets More decision participants More professional purchasing effort

12. Business Markets Supplier development is the systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials that they will use in making their own products or resell Types of Decisions and the Decision Process

13. Systematic development of supplier-partners to ensure dependable supply of materials for use in making products is called ________. vendor management supplier development B2B supply curve

14. Systematic development of supplier-partners to ensure dependable supply of materials for use in making products is called ________. vendor management supplier development B2B supply curve

15. Business Buyer Behavior The Model of Business Buyer Behavior

16. Which of the following is not a characteristic of the business market? Business markets are more geographically concentrated. Many business markets have elastic demand. Business markets have more fluctuating demand. Business marketers have far fewer but larger customers.

17. Which of the following is not a characteristic of the business market? Business markets are more geographically concentrated. Many business markets have elastic demand. Business markets have more fluctuating demand. Business marketers have far fewer but larger customers.

18. Business Buyer Behavior Straight rebuy is a routine purchase decision such as reorder without any modification Modified rebuy is a purchase decision that requires some research where the buyer wants to modify the product specification, price, terms, or suppliers New task is a purchase decision that requires thorough research such as a new product Major Types of Buying Situations

19. Which of the following is not one of the major types of buying situations faced by business buyers? Straight rebuy New task buy Online rebuy Modified rebuy

20. Which of the following is not one of the major types of buying situations faced by business buyers? Straight rebuy New task buy Online rebuy Modified rebuy

21. Which of the business buyer purchase decisions offers the greatest opportunities and the greatest challenges for marketers? Straight rebuy New task buy Modified rebuy Both 2 and 3

22. Which of the business buyer purchase decisions offers the greatest opportunities and the greatest challenges for marketers? Straight rebuy New task buy Modified rebuy Both 2 and 3

23. Business Buyer Behavior Systems selling involves the purchase of a packaged solution from a single seller Two-step process of selling: Interlocking products System of production, inventory control, distribution, and other services to meet the buyer’s need for a smooth-running operation Major Types of Buying Situations

24. Business Buyer Behavior Participants in the Business Buying Process Buying center is all of the individuals and units that participate in the business decision-making process Users Influencers Buyers Deciders Gatekeepers

25. The buying center includes all members of the organization who play any of five roles except ________. influencers deciders gatekeepers sellers

26. The buying center includes all members of the organization who play any of five roles except ________. influencers deciders gatekeepers sellers

27. The ________ role in the purchase decision process is to control the flow of information to others. buyer’s gatekeeper’s influencer’s decider’s

28. The ________ role in the purchase decision process is to control the flow of information to others. buyer’s gatekeeper’s influencer’s decider’s

29. Business Buyer Behavior Participants in the Business Buying Process Buying center provides a major challenge Who participates in the process Their relative authority What evaluation criteria each participant uses Informal participants

30. Business Buyer Behavior Participants in the Business Buying Process Users are those that will use the product or service Influencers help define specifications and provide information for evaluating alternatives Buyers have formal authority to select the supplier and arrange terms of purchase Deciders have formal or informal power to select and approve final suppliers Gatekeepers control the flow of information

31. Business Buyer Behavior Major Influences on Business Buyers

32. Business Buyer Behavior Major Influences on Business Buyers Environmental Factors

33. Business Buyer Behavior Major Influences on Business Buyers Organizational Factors

34. Business Buyer Behavior Major Influences on Business Buyers Interpersonal Factors

35. Business Buyer Behavior The Buying Process

36. Once a business buyer determines a problem or need, the next step in the business buying process is to ________. begin a supplier search solicit suppliers’ proposals determine a general need description make a purchase

37. Once a business buyer determines a problem or need, the next step in the business buying process is to ________. begin a supplier search solicit suppliers’ proposals determine a general need description make a purchase

38. Business Buyer Behavior Problem recognition occurs when someone in the company recognizes a problem or need Internal stimuli Need for new product or production equipment External stimuli Idea from a trade show or advertising The Buying Process

39. Business Buyer Behavior General need description describes the characteristics and quantity of the needed item Product specification describes the technical criteria Value analysis is an approach to cost reduction where components are studied to determine if they can be redesigned, standardized, or made with less costly methods of production The Buying Process

40. An approach to cost reduction in which components are studied to determine if they can be made by less costly methods is called ____________. value analysis derived demand deciders inventory control

41. An approach to cost reduction in which components are studied to determine if they can be made by less costly methods is called ____________. value analysis derived demand deciders inventory control

42. Business Buyer Behavior Supplier search involves compiling a list of qualified suppliers Proposal solicitation is the process of requesting proposals from qualified suppliers The Buying Process

43. Business Buyer Behavior Supplier selection is the process when the buying center creates a list of desired supplier attributes and negotiates with preferred suppliers for favorable terms and conditions Order-routine specifications is the final order with the chosen supplier and lists all of the specifications and terms of the purchase The Buying Process

44. Business Buyer Behavior Performance review involves a critique of supplier performance to the purchase terms The Buying Process

45. Business Buyer Behavior Online purchasing Company-buying sites Extranets E-Procurement

46. Business Buyer Behavior E-Procurement Advantages Access to new suppliers Lowers costs Speeds order processing and delivery Shares information Sales Service and support Disadvantages Can erode relationships as buyers search for new suppliers Security

47. Institutional and Government Markets Institutional markets consist of hospitals, nursing homes, and prisons that provide goods and services to people in their care Characteristics Low budgets “Captive” audience

48. Institutional and Government Markets Government markets tend to favor domestic suppliers and require suppliers to submit bids and normally award to the lowest bidder Carefully monitored Affected by similar environmental factors Good credit Non-economic factors Minority suppliers Depressed suppliers Small businesses

49. The ________ consists of schools, hospitals, nursing homes, and prisons that provide goods and services to people in their care. government market institutional market non-profit market for-profit market

50. The ________ consists of schools, hospitals, nursing homes, and prisons that provide goods and services to people in their care. government market institutional market non-profit market for-profit market