Analyzing business market and

business buying behavior

Prepared by:

Mohammed N. Nabi
GCID # 911-37-6275
MMIS Program

Course: Applied Marketing MKTG = 6930

Instructor:- Professor Dr. R.J Fontenot
Summer Semester 2016 (05/25/2016)

Georgia College and State University

Macon Campus

Buying behavior and Analyzing business market

Who is Customer or Consumer? A customer (sometimes known as a client, buyer, or

purchaser) is the recipient of a Good or a service, or a product, or an idea, obtained from a seller,
vendor, or supplier via a financial transaction or exchange for money or some other valuable
consideration.
A customer may or may not also be a consumer, but the two notions are distinct, even though the
terms are commonly confused. A customer purchases goods; a consumer uses them.
Business Market vs Consumer Market
Business market- consists of all the organizations that acquire goods and services used in the
production of other products or services that are sold, rented or supplied to others.
Consumer market- markets dominated by products and services designed for the general
consumer.
Several Characteristics of Business Market: - 1) Fewer Buyers. 2). Larger Buyers. 3) Close
Supplier-customer Relationship. 4) Geographically Concentrated Buyers. 5) Derived Demand. 6)
Inelastic Demand. 7) Fluctuating Demand. 8) Professional Purchasing. 9) Several Buying.
Influences.10) Multiple Sales Calls. 11) Direct Purchasing. 12) Reciprocity. 13) Leasing.
What is ORGANIZATIONAL BUYING?
Decision making process by which formal organizations establish the need for purchased
products and services.
Institutional Markets consist of schools, hospitals, nursing homes, prisons, and other
institutions that must provide goods and services to people in their care. Many of these
organizations are characterized by low budgets and captive clienteles.
Analyzing Business Markets &Business Buying Behavior
Participants in the business buying Process- It consists of 1) initiators, 2) users,3) influencers, 4)
deciders,5) approvers, 6) buyers, and 7) gatekeepers.
Major Influences on buying decisions a) Environment Factors b) Organizational Factor c)
Other Organizational Factors d) Long-Term Contracts e) Purchasing-Performance Evaluation
and Buyers f) Professional Development, g) Improved Supply Chain Management, h)
Interpersonal and Individual Factors, i) Cultural Factors
The purchasing/procurement process business buyers buy goods and services to make money or
to reduce operating costs or to satisfy a social or legal obligation.
Company Purchasing Orientations:
1. Buying orientation- obtain the best deal in terms of price, quality and availability.
2. Procurement orientation- improving quality.
3. Supply Chain Management orientation- improved customer service. 4. Deciders

Type of purchasing processes

1. Routine products: These products have low value and cost to the customer and involve little
risk.
2. Leverage products: These products have high value and cost to the customer but involve little
risk of supply because many companies make them.
3. Strategic products: These products have high value and cost to the customer and also involve
high risk.
4. Bottleneck products: These products have low value and cost to the customer but they involve
some risk.
Stages in the buying process 1. Problem recognition, 2. General need description, 3. Product
specification, 4. Supplier search, 5. Proposal solicitation, 6. Supplier selection, 7. Order-routine
specification, 8. Performance review
Summary:
1. Organizational buying is the decision-making process by which formal organizations establish
the need for purchased products and services, then identify, evaluate, and choose among
alternative brands and suppliers.
2. Compared to consumer markets, business markets generally have fewer and larger buyers, a
closer customer-supplier relationship, and more geographically concentrated buyers.
3. The buying center is the decision-making unit of a buying organization. It consists of
initiators, users, influencers, deciders, approvers, buyers, and gatekeepers. To influence these
parties, marketers must be aware of environmental, organizational, interpersonal, and individual
factors.
4. The buying process consists of eight stages called buy phases: (1) problem recognition, (2)
general need description, (3) product specification, (4) supplier search, (5) proposal solicitation,
(6) supplier selection, (7) order-routine specification, and (8) performance review.
5. Business marketers must form strong bonds and relationships with their customers and provide
them added value. Some customers, however, may prefer a transactional relationship.
Technology is aiding the development of strong business relationships.
6.The institutional market consists of schools, hospitals, nursing homes, prisons, and other
institutions that provide goods and services to people in their care. Buyers for government
organizations tend to require a great deal of paperwork from their vendors and to favor open
bidding and domestic companies. Suppliers must be prepared to adapt their offers to the special
needs and procedures found in institutional and government markets.

References:1.Marketing Management, Kotler & Keller, ISBN: 13-9780132102926

2. Wikipedia.org
3. Slideshare.net
4. https://prezi.com
5. www.mktgsensei.com - Kotler -Keller chapter 07