Business Buying

Behavior
How it is made??
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 What is Business-to-business marketing?
• Any marketing strategy or content used by one business to
target and sell to another business.
• For example, companies that sell services, products to other
companies or organizations typically use B2B marketing.
• The purpose of marketing via business to business is to
inform, educate and convert potential customers.
THE CHARACTERISTICS OF BUSINESS-TO-BUSINESS (B2B)
MARKETS
• Business-to-business (B2B) markets differ from business-to-consumer (B2C)
markets in many ways.
• Business products can also be very complex.
• Not only can business products be complex, but so can figuring out the buying
dynamics of organizations.
• Generally, the more high-dollar and complex the item being sold is, the longer
it takes for the sale to be made.
• most business buyers demand that the products they buy meet strict
standards.
• The level of personal selling that goes on. Salespeople personally call on
business customers to a far greater extent than they do consumers.
Business-to-Consumer Markets versus
Business-to-Business Markets: How They
Compare
The Demand for B2B Products

• Derived demand
• Demand that springs from, or is derived from, a secondary source
other than the primary buyer of the product.
• Fluctuating demand
• Demand that fluctuates sharply in response to a change in consumer
demand.
• Joint demand
• When the demand for one product increases the demand for another.
TYPES OF B2B BUYERS
1. Producers
• Companies that purchase goods and services that they transform into other products.

2. Resellers
• Companies that sell goods and services produced by other firms without materially
changing them
3. Business-to-government (B2G) markets
• Markets in which local, state, and federal governments buy products.

4. Institutional markets
• Nonprofit organizations such as the American Red Cross, churches, hospitals, charitable
organizations, private colleges, and civic club
BUYING CENTERS

• Buying centers
• Groups of people within organizations who make purchasing decisions.
Other Players
• Users
• The people and groups within the organization that actually use the product.
• Influencers
• People who may or may not use the product but actively participate in the
purchasing process in order to secure a decision they consider favorable.
• Gatekeepers
• People who decide if and when a salesperson gets access to members of the
buying center.
• Decider
• The person who makes the final purchasing decision.
 STAGES IN THE B2B BUYING PROCESS AND
B2B BUYING SITUATIONS
• A need is recognized.
• The need is described and quantified.
• Potential suppliers are searched for.
• Qualified suppliers are asked to complete responses to requests for proposal
(RFPs
• The proposals are evaluated and supplier(s) selected
• An order routine is established.
• A post-purchase evaluation is conducted and the feedback provided to the
vendor.
Types of B2B Buying Situations
• straight rebuy
• When a purchaser buys the same product in the same quantities from the
same vendor
• new buy
• When a firm purchases a product for the first time.
• modified rebuy
• When a company wants to buy the same type of product it has in the past
but make some modifications to it.
INTERNATIONAL B2B MARKETS AND E-
COMMERCE
• International B2B Markets
• B2B E-Commerce
• sell-side site A Web site in which a single seller sells products to many
different buyers
• buy-side site A Web site in which a business buys products from multiple
sellers that go there to do business with the firm.
• B2B exchanges E-commerce Web sites where multiple buyers and sellers go
to find and do business with one another.
• B2B auctions Web-based auctions that occur between businesses
Market Segmenting,
Targeting, and Positioning
What is market segmentation

• The process of breaking down all consumers into groups of

potential buyers with similar characteristics
TARGETED MARKETING vs.
MASS MARKETING

• Targeted marketing or differentiated marketing

• Choosing select groups of people to sell to
• Mass marketing or undifferentiated marketing
• Selling the same product to all consumers
Benefits of Segmenting and Targeting
Markets
• Avoid head-on competition with other firms trying to capture the same
customers
• Develop new offerings and expand profitable brands and products lines
• Remarket older, less-profitable products and brands
• Identify early adopters
• Redistribute money and sales efforts to focus on your most profitable
customers
• Retain “at risk” customers in danger of defecting to your competitors
Segmenting and Targeting a Firm’s Current
Customers

• Studying their buying patterns

• Firms also try to get a better read on their customers by
surveying them or hiring marketing research firms to do so.
• Using Facebook to develop closer relationships with their
customers.
One-to-One Marketing

• Forming close, personal relationships with

customers and giving them exactly what they
want.
Steps in One-to-One Marketing
HOW MARKETS ARE SEGMENTED

• A firm will opted use multiple segmentation bases, or

criteria to classify buyers, to get a fuller picture of its
customers and create real value for them.
 Types of Segmentation Bases
• Behavioral segmentation.
• - What benefits do customers want, and how do they use our product?
• Demographic segmentation.
• - How do the ages, races, and ethnic backgrounds of our customers affect what
they buy?
• Geographic segmentation.
• - Where are our customers located, and how can we reach them? What products
do they buy based on their locations?
• Psychographic segmentation.
• - What do our customers think about and value? How do they live their lives?
Behavioral Segmentation

• Dividing people and

organization into groups
according to how they
behave with or act toward
products
Segmenting by Demographics

• Segmenting buyers by tangible, personal

characteristics such as their ages, incomes,
ethnicity, family sizes, and so forth
• Demographics are commonly utilized to
segment markets because a mountain of
demographic information is publicly available
in databases around the world.
Segmenting by Geography

• Segmenting buyers by where they are located

Segmenting by Geography
Geocoding
- The process of plotting geographic marketing information takes on a map. Geocoding can help
businesses see where prospective customers might be clustered and target them with various ad campaigns,
including direct mail, for example.

Geodemographics
- Combining both demographic and geographic information for marketing purposes. customer profile
- The description of a type of customer based on market segmentation criteria

population density
- The number of people per square mile.

proximity marketing - The process of segmenting buyers geographically and target them within a
few hundred feet of a business businesses using wireless technology.
Segmenting by Psychographics

• Segmenting people by their activities, interests,

opinion, attitudes, values, and lifestyles.
 • Innovators.
Consumers were • Thinkers.
then divided up into • Achievers.
the following
• Experiencers.
categories, each
characterized by • Believers.
certain buying • Strivers.
behaviors. • Makers.
• Survivors.
Innovators
- are successful, sophisticated, take-charge people with high self-esteem. Because they have such
abundant resources, they exhibit all three primary motivations in varying degrees. They are change
leaders and are the most receptive to new ideas and technologies. Innovators are very active
consumers, and their purchases reflect cultivated tastes for upscale, niche products and services.
Image is important to Innovators, not as evidence of status or power but as an expression of their
taste, independence, and personality. Innovators are among the established and emerging leaders
in business and government, yet they continue to seek challenges. Their lives are characterized by
variety. Their possessions and recreation reflect a cultivated taste for the finer things in life

Thinkers
- are motivated by ideals. They are mature, satisfied, comfortable, and reflective people who value
order, knowledge, and responsibility. They tend to be well educated and actively seek out
information in the decision-making process. They are well informed about world and national
events and are alert to opportunities to broaden their knowledge. Thinkers have a moderate
respect for the status quo institutions of authority and social decorum, but are open to consider
new ideas. Although their incomes allow them many choices, Thinkers are conservative, practical
consumers; they look for durability, functionality, and value in the products they buy
Achievers
- Motivated by the desire for achievement, Achievers have goal-oriented lifestyles and a deep
commitment to career and family. Their social lives reflect this focus and are structured around family,
their place of worship, and work. Achievers live conventional lives, are politically conservative, and
respect authority and the status quo. They value consensus, predictability, and stability over risk,
intimacy, and self-discovery. With many wants and needs, Achievers are active in the consumer
marketplace. Image is important to Achievers; they favor established, prestige products and services
that demonstrate success to their peers. Because of their busy lives, they are often interested in a
variety of timesaving devices.
Experiencers
- are motivated by self-expression. As young, enthusiastic, and impulsive consumers, Experiencers
quickly become enthusiastic about new possibilities but are equally quick to cool. They seek variety and
excitement, savoring the new, the offbeat, and the risky. Their energy finds an outlet in exercise, sports,
outdoor recreation, and social activities. Experiencers are avid consumers and spend a comparatively
high proportion of their income on fashion, entertainment, and socializing. Their purchases reflect the
emphasis they place on looking good and having “cool” stuff.
Believers
- Like Thinkers, Believers are motivated by ideals. They are conservative, conventional people with
concrete beliefs based on traditional, established codes: family, religion, community, and the nation.
Many Believers express moral codes that are deeply rooted and literally interpreted. They follow
established routines, organized in large part around home, family, community, and social or religious
organizations to which they belong. As consumers, Believers are predictable; they choose familiar
products and established brands. They favor American products and are generally loyal customers

Makers
- Like Experiencers, Makers are motivated by self-expression. They express themselves and
experience the world by working on it—building a house, raising children, fixing a car, or
canning vegetables—and have enough skill and energy to carry out their projects successfully.
Makers are practical people who have constructive skills and value self-sufficiency. They live
within a traditional context of family, practical work, and physical recreation and have little
interest in what lies outside that context. Makers are suspicious of new ideas and large
institutions such as big business. They are respectful of government authority and organized
labor, but resentful of government intrusion on individual rights. They are unimpressed by
material possessions other than those with a practical or functional purpose. Because they
prefer value to luxury, they buy basic products.
Survivors
-they live narrowly focused lives. With few resources with which to cope, they often
believe that the world is changing too quickly. They are comfortable with the familiar
and are primarily concerned with safety and security. Because they must focus on
meeting needs rather than fulfilling desires, Survivors do not show a strong primary
motivation. Survivors are cautious consumers. They represent a very modest market
for most products and services. They are loyal to favorite brands, especially if they
can purchase them at a discount.
Consumer insight

• An understanding of consumers that results when both

quantitative and qualitative information are gathered about
them.
Segmentation in B2B Markets
A price-focused segment
- composed of small companies that have low profit margins and regard the good or
service being sold as not being strategically important to their operations.

A quality and brand-focused segment

- composed of firms that want the best possible products and are prepared to pay
for them.

A service-focused segment
- composed of firms that demand high-quality products and have topnotch delivery
and service requirements.

A partnership-focused segment
- composed of firms that seek trust and reliability on the part of their suppliers and
see them as strategic partners.