Principles of marketing: Lecture 16

MGT301
Principles of Marketing
Lecture­16


Summary
of  
Lecture­15


Consumer Buying Behavior
Product
Price
Place
Promotion

Buyer’s decision
process

Product choice
Brand choice
Dealer choice

Marketing
Marketingand
and
Other
Other Stimuli
Stimuli

Buyer’s

Buyer’s Black
Black Box
Box
”what”
”what”&&“how”
“how”

Buyer’s
Buyer’s Response
Response

Economic
Technological
Political
Cultural

Buyer
characteristics
affecting consumer
behavior

Purchase timing
Purchase quantity


Characteristics Affecting Consumer 
Behavior






 Cultural
 Social
 Personal
 Psychological


Buyer Decision Process


Need
Need Recognition
Recognition

Information
Information Search
Search

Cultural,
Cultural, Social,
Social,
Individual
Individual and
and
Psychological
Psychological
Factors
Factors
affect

affect
all
all steps
steps

Evaluation
Evaluation
of
of Alternatives
Alternatives

Purchase
Purchase

Postpurchase
Postpurchase
Behavior
Behavior


Cultural
Factors

Individual
Factors

Social
Factors

Psychological

Factors

CONSUMER
DECISIONMAKING
PROCESS

BUY /
DON’T BUY


Today’s Topics


Business Markets and Buying 
Behavior 


What is a Business Market?
The Business Market ­ all the organizations that buy goods and 
services to use in the production of other products and services 
that are sold, rented, or supplied to others.


Characteristics of Business Markets


Market Structure and Demand


 Fewer, larger buyers 



 Geographically concentrated



 Demand derived from consumers 



 Inelastic demand 



 Fluctuating demand


Nature of the Buying Unit


 More buyers 



 More professional purchasing effort


Types of Decisions & the 
Decision Process



 More complex decisions



 Process is more formalized



 Buyer and seller are more dependent on each other



 Build close long­term relationships with customers


Business Buyer Behavior
The buying behavior of the organizations that buy goods and 
services for use in the production of other products and 
services or for the purpose of reselling or renting them to others 
at profit.


Model of Business Buyer Behavior


Product

Marketing

Marketing and
and
Other
Other Stimuli
Stimuli

Economic

Price

Technological

Place

Political

Promotion

Cultural

Organizational
Influences

Product or Service
Choice

The
TheBuying
Buying Organization
Organization

The Buying Center
Buying Decision
Process

Buyer’s
Buyer’s Response
Response

Interpersonal
and Individual
Influences

Delivery Terms
and Times

Supplier Choice

Service Terms

Order Quantities

Payment


Business Buying Situations


Involved Decision Making

New

New Task
Task Buying
Buying

Modified
Modified Rebuy
Rebuy

Straight
Straight Rebuy
Rebuy


Participants in the Business Buying 
Process: The Buying Center
Gatekeepers

Deciders

Buying
Buying
Center
Center

Buyers

Users

Influencers

Initiator
Initiator

User
User

GateGatekeeper
keeper

Influencer
Influencer

Buying
Buying
Center
Center

Decider
Decider

Buyer
Buyer


Major Influences on 
Business Buying
Environmental
•Level of
demand

•Economic
outlook
•Interest rate
•Rate of technological change
•Political and
regulatory
developments
•Competitive
developments
•Social responsibility concerns

Organizational
Interpersonal
•Objectives
•Policies
•Procedures

•Interests
•Authority
•Status

•Organizational
•Empathy
structures
•Persuasive•Systems
ness

Individual

•Age

•Income
Business
•Education
Buyer
•Job position
•Personality
•Risk attitudes
•Culture


Stages in the Business
Buying Process


Problem
Problem Recognition
Recognition
General
General Need
Need Description
Description

Product
Product Specification
Specification
Supplier
Supplier Search
Search
Proposal
Proposal Solicitation

Solicitation
Supplier
Supplier Selection
Selection
Order
Order Routine
Routine Specification
Specification

Performance
Performance Review
Review


Key Organizational Buying Criteria