b to b markets

Principles of Marketing 5e, © Pearson Education 2008
Previewing concepts (1)
Define the business market and explain how business markets differ from consumer markets
Identify the major factors that influence business buyer behaviour

Principles of Marketing 5e, © Pearson Education 2008
Previewing concepts (2)
List and define the steps in the business buying decision process
Compare institutional and government markets and explain how institutional and government buyers make their buying decisions

Principles of Marketing 5e, © Pearson Education 2008
Prelude case:
Concorde is dead –
the booming Busjet market

Principles of Marketing 5e, © Pearson Education 2008
What is the business
buying process?
The business buying process is the decision-making process by which business buyers establish the need for purchased products and services, and identify, evaluate, and choose among alternative brands and suppliers.

Principles of Marketing 5e, © Pearson Education 2008
Characteristics of
business markets
Fewer but larger buyers
Geographically concentrated
Derived from final consumer demand
More inelastic
More fluctuations
More buyers in process
More professional purchasing effort
More complex and formalised buying decisions
Based on long-term relationships

Principles of Marketing 5e, © Pearson Education 2008
Derived demand
Invista sells fibre to those who sell fabric to those who sell garments to end consumers.
Source:
McCann Erikson

Principles of Marketing 5e, © Pearson Education 2008
Business buyer behaviour
The
environment
The
buying
organisation
Buyer
response

Principles of Marketing 5e, © Pearson Education 2008
Environmental components affecting business buyer behaviour
Marketing stimuli
Product
Price
Place
Promotion
Other stimuli
Economic
Technological
Political
Cultural
Competitive

Principles of Marketing 5e, © Pearson Education 2008
Possible buyer responses
in the buying process
Product or service choice
Supplier choice
Order quantities
Delivery terms and times
Service terms
Payment

Principles of Marketing 5e, © Pearson Education 2008
IKEA involves suppliers
in its business

Principles of Marketing 5e, © Pearson Education 2008
Types of buying situations
Straight rebuy
Modified rebuy
New task

Principles of Marketing 5e, © Pearson Education 2008
Participants in the
business buying process
Users
Influencers
Buyers
Deciders
Gatekeepers

Principles of Marketing 5e, © Pearson Education 2008
Figure 6.2 Major influences on business buyer behaviour
Environmental
Organisational
Interpersonal
Individual
Buyers

Principles of Marketing 5e, © Pearson Education 2008
What is the
business buying process?
The business buying process is the decision-making process by which business buyers establish the need for purchased products and services, and identify, evaluate and choose among alternative brands and suppliers.

Principles of Marketing 5e, © Pearson Education 2008
Figure 6.3 Stages of the business buying process
Problem
recognition
General
need description
Product
specification
Supplier search
Proposal
solicitation
Supplier
selection
Order-routine
specifications
Performance
review

Principles of Marketing 5e, © Pearson Education 2008
Benefits of e-procurement
Gives buyers access to new suppliers
Lowers purchasing costs
Hastens order processing and delivery
Frees purchasing people to focus on strategic issues

Principles of Marketing 5e, © Pearson Education 2008
Benefits of e-procurement
Acme Whistles

Principles of Marketing 5e, © Pearson Education 2008
What are institutional and
government markets?
Institutional markets include schools, hospitals, nursing homes, prisons and other institutions providing care.
Governmental units include national and local units that purchase or rent goods to carry out government functions.

Principles of Marketing 5e, © Pearson Education 2008
Discussing the concepts (1)
How do the market structure and demand of the business markets for Michelin tyres sold to car makers differ from those selling Michelin tyres to final consumers?
Discuss several ways in which a straight rebuy differs from a new-task situation.