Transcript CHPT7 - courses.psu.edu

CHAPTER 7
ANALYZING BUSINESS
MARKETS AND BUSINESS
BUYING BEHAVIORS
BUSINESS-TO-BUSINESS
MARKET
Business
Business
Consumers
Business-to-Business
Consumer
Market
Market
1. Businesses
2. Government/Military
3. Institutions
ORGANIZATIONAL BUYING
Business vs. Consumer Market:
Mrk.Characteristics Consumer Business
Number of buyers
Many
Few
Size of Buyers
Small
Large
Supplier Relations
No
Close
Concentration
No.
Yes
Demand
Unpredictable Derived
Demand
Elastic
Inelastic

ORGANIZATIONAL BUYING
(CONT.)
Mrk.Characteristics Consumer Business
Demand
Normal Fluctuating
Professional Purchasing No
Yes
Purchasing
Middlemen Direct
Buying Influence
No
Yes
Reciprocity
No
Yes
Leasing
Some
Heavy
BUYING SITUATION
(A)New Task
 (B)Modified Re-buy
 (C)Straight Re-buy
Buy-grid Model
(A)
(B)
Problem recognition Yes Maybe
Need Description
Yes Maybe
Product Specification Yes Yes

(C)
No
No
Yes
BUYING SITUATION (CONT.)
Buy-grid model (cont.)
(A)
(B)
Supplier search
Yes Maybe
Proposal solicitation
Yes Maybe
Supplier selection
Yes Maybe
Proposal solicitation
Yes Maybe
Supplier selection
Yes Maybe
Order-routine Spec.
Yes Maybe
Performance Review
Yes Yes
(C)
No
No
No
No
No
No
Yes
PARTICIPATION IN BUSINESS
BUYING

System Buying/Selling:
» System contracting:

Single supply source provides the entire requirement of MRO.
» Large scale projects such as dams, refineries, steel factories.

Buying Centers:
1.
2.
3.
4.
5.
6.
7.
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
PARTICIPANTS IN THE
BUSINESS BUYING(CONT.)

Major Influences In Business Buying:
» Environmental factors:




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
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Demand
economic outlook
interest rate
Technology
political life
Competition
social responsibility;
PARTICIPANTS IN THE
BUSINESS BUYING (CONT.)

Major Influences in Business Buying (cont.):
» Organizational factors:

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
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Purchasing department upgrading..
Cross-functional roles.
Centralized purchasing.
Decentralized purchasing for small ticket items.
Internet purchasing.
Long term contract.
Purchasing-performance evaluation.
Lean production-high quality and JIT inventory planning.
» Interpersonal factors:

Interest, authority, status, empathy and persuasiveness.
» Individual factors:

Age,income, education, job position, personality,risk attitudes
» Cultural factors