|Business Markets and Buying Behavior|
The business market consists of organizations that buy goods and services to produce other goods and services, to resell to other business users or consumers, or to conduct the organization's operations.
It is an extremely large and complex market spanning a wide variety of business users that buy a broad array of business goods and services. Besides manufacturing, the business market includes agriculture, reseller, government, services, nonprofit, and international components.
Business market demand generally is derived, inelastic, and widely fluctuating. Business buyers usually are well informed about what they are buying. Business market demand is analyzed by evaluating the number and kinds of business users and their buying power.
Business buying, or purchasing, has taken on greater strategic importance. Organizations are buying more and making less, under intense time and quality pressures, and developing long-term partnering relationships with suppliers.
The buying-decision process in business markets may involve as many as five stages: need recognition, identification of alternatives, evaluation of alternatives, purchase decision, and postpurchase behavior. The actual number of stages in a given purchase decision depends on a number of factors including buying motives, the type of decision, the buying center, the buyer-seller relationship, and business buying patterns.
Business buying motives are focused on achieving a firm's objectives, but the business buyer's self-interest must also be considered. The types of business buying situations are new-task buy, straight rebuy, or modified rebuy.
The concept of a buying center reflects the multiple buying influences in business purchasing decisions. In a typical buying center people play the roles of users, influencers, deciders, gatekeepers, and buyers.
Developing a buyer-seller relationship stems from recognizing the importance of the customer's supply chain and the benefits of developing loyalty. Relationships require commitment and are built on trust and sharing information.
Buying practices of business users often are quite different from buying practices in the consumer market. In the business market, direct purchases (that is, without middlemen) are more common, purchases are made less frequently, and orders are larger. The negotiation period usually is longer, and reciprocity arrangements sometimes exist. The demand for service is greater, and the dependability of supply is more critical. Finally, leasing (rather than product ownership) is quite common in business marketing.
Electronic commerce is having a major impact on business transactions involving standardized products. Even though it will not replace the need for personalized relationships in many situations, the Internet will affect nearly every aspect of business marketing.