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MKTG 3010 Test#1: Chapter 6 Business Markets and Business Buyer Behavior

1) business markets
2) business buyer behavior
3) the business buying process (BBP)
4) institutional markets and government markets
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
business markets different than consumer market
large in size, far more dollars and items than in consumer markets; include many sets of business products
business markets similar to consumer markets
both involve people who assume buying roles and make purchase decisions to satisfy needs
main differences btwn business markets and consumer markets
1) market structure and demand
2) nature of the buying unit
3) types of decisions and the decision process
market structure & demand
-derived demand
-inelastic and more fluctuating demand (less driven by price)
-a small percentage increase in consumer demand can cause large increases in business demand
derived demand
business demand that ultimately comes from the demand for consumer goods (eg. Gore-Tex)… less control as a business, demand for your product depends of demand of finished product
nature of the buying unit
-business purchases involve more decision participants/more professional purchasing effort
-companies have well-trained marketers & salespeople to deal w/ well-trained buyers
types of decisions and the decision process
-more complex buying decisions than consumer buyers
-longer & more formalized process
-buyer & seller dependent on each other
-supplier development
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
objective 2: business buyer behavior: 2 parts
1) the buying center- all the people involved in the buying decision
2) buying decision process
*influenced by organizational, interpersonal, and individual factors plus external environmental factors
major types of buying situations
1) straight rebuy
2) modified rebut
3) new task
4) systems selling/solutions selling
straight rebuy
a business buying situation in which the buyer routinely reorders something w/o any modifications
modified rebuy
a business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers
new task
a business buying situation in which the buyer purchases a product or service for the first timeq
systems selling/solutions selling
buying a packages solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation (eg. IBM, Six Flags)
participants in the business buying process
1) buying center
2) users
3) influences
4) buyers
5) deciders
6) gatekeepers
buying center
all the individuals and units that play a role in the purchase decision-making process
members of the buying organization who will actually use the purchased product or service
people in the organization who affect the buying decision; define specifications and also provide information for evaluating alternatives (technical personnel)
people in an organization’s buying center who make purchase
people who have formal or informal power to select/approve final suppliers
control the flow of info to others
major influences on business buyers
1) environmental
2) organizational
3) interpersonal
4) individual
5) buyers
objective 3: the business buying process (BBP)
1) problem recognition
2) general need description
3) product specification
4) supplier search
5) proposal solidification
6) supplier selection
7) order routine specification
8) performance review
problem recognition
the stage in which the company recognizes a problem or need that can be met by acquiring a good or service (eg. Quill)
general need description
stage in which a buyer describes the general characteristics and quantity of needed item
product specification
stage in which the buying organization decides on and specifies the best technical product characteristics for a needed item
supplier search
stage in which the buyer tries to find the best vendors
proposal solidification
stage in which buyer invites qualified suppliers to submit proposals
supplier selection
stage in which the buyer reviews proposals and selects a supplier or suppliers
order routine specification
stage in which buyer writes the final order with the chaos supplier(s), listing the technical specifications, qu
performance review
stage in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the management
objective 4: institutional markets and government markets
1) institutional markets
2) government markets
institutional markets
schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care (eg. P&G)
government market
federal, state, local that purchase or rent goods and services (eg. Lockheed Mar)

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