p. 192
PPT 6-12
PPT 6-13
p. 192
PPT 6-14
p. 192
PPT 6-15
Participants in the Business Buying Process
The decision-making unit of a buying organization is called
its buying center: all the individuals and units that
participate in the business decision-making process.
The buying center includes all members of the organization
who play any of five roles in the purchase decision process.
Users are members of the organization who will use
the product or service.
Influencers often help define specifications and also
provide information for evaluating alternatives.
Buyers have formal authority to select the supplier
and arrange terms of purchase.
Deciders have formal or informal power to select or
approve the final suppliers.
Gatekeepers control the flow of information to
others.
The buying center is not a fixed and formally identified unit
within the buying organization. It is a set of buying roles
assumed by different people for different purchases.
Within the organization, the size and makeup of the buying
center will vary for different products and for different
buying situations.
The buying center concept presents a major marketing
challenge. The business marketer must learn who
participates in the decision, each participant’s relative
influence, and what evaluation criteria each decision
participant uses.
The buying center usually includes some obvious
participants who are involved formally in the buying process.
It may also involve less obvious, informal participants, some
of whom may actually make or strongly affect the buying
decision. Sometimes, even the people in the buying center
are not aware of all the buying participants.
Major Influences on Business Buyers
Business buyers are subject to many influences when they
make their buying decisions. Business buyers respond to
both economic and personal factors. They react to both
reason and emotion.
p. 192
Key Terms: Buying
center, Users,
Influencers, Buyers,
Deciders,
Gatekeepers
p. 193
Ad: USG
PPT 6-16
PPT 6-17
p. 193
p. 193
PPT 6-18
PPT 6-19
PPT 6-20
p. 195
When suppliers’ offers are very similar, business buyers have
little basis for strictly rational choice. Because they can meet
organizational goals with any supplier, buyers can allow
personal factors to play a larger role in their decisions.
When competing products differ greatly, business buyers are
more accountable for their choice and tend to pay more
attention to economic factors.
Business buyers are heavily influenced by factors in the
current and expected economic environment, such as the
level of primary demand, the economic outlook, and the cost
of money.
An increasingly important environmental factor is supply of
key materials. Many companies are now more willing to buy
and hold larger inventories of scarce materials to ensure
adequate supply. Business buyers also are affected by
technological, political, and competitive developments in the
environment.
Culture and customs can strongly influence business buyer
reactions to the marketer’s behavior and strategies,
especially in the international marketing environment.
Organizational factors are also important. Each buying
organization has its own objectives, policies, procedures,
structure, and systems, and the business marketer must
understand those factors as well.
The buying center usually includes many participants who
influence each other, so interpersonal factors also influence
the business buying process. These factors can include
expertise and authority. It is often difficult to assess such
interpersonal factors and group dynamics.
Each participant in the business buying-decision process
brings in personal motives, perceptions, and preferences.
These individual factors are affected by personal
characteristics such as age, income, education, professional
identification, personality, and attitudes toward risk.
Review Learning Objective 2: Identify the major factors
that influence business buyer behavior.
p. 193
Figure 6.2: Major
Influences on
Business Buyer
Behavior
p. 194
Photo: International
marketing manners
Assignments, Resources
Use Real Marketing 6.1 here
Use Discussion Questions 6-3 here
Use Marketing Ethics here
Use Additional Projects 1 and 2 here
Use Small Group Assignment 1 here
Use Individual Assignment 1 here
Troubleshooting Tip
One area of concern deals with students under-
standing a buying center. The easiest way to
overcome this is by asking the students to form their
own buying center. Who at the university or college
would be involved in buying computers for the
computer lab, athletic equipment for the gym,
textbooks for the class, and shrubs for the campus?
Be sure to explain that it is not always the most
obvious people that might be involved in the process.
How many committees (people) did they come up
with? After one illustration, students usually catch on
to how the process works. Finish the discussion by
asking how the marketing person in a supplier
organization should use or gain knowledge about the
buying center process of a future sales client (use the
examples above if necessary to make a connection).
PPT 6-21
p. 195
PPT 6-22
PPT 6-23
p. 196
PPT 6-24
List and define the steps in the business buying decision
process.
The Business Buyer Decision Process
Buyers who face a new task buying situation usually go
through all stages of the buying process. Buyers making
modified or straight rebuys may skip some of the stages.
Problem Recognition
Problem recognition can result from internal or external
stimuli. Internally, the company may decide to launch a new
product that requires new production equipment and
materials. Externally, the buyer may get some new ideas at a
trade show, see an ad, or receive a call from a salesperson
who offers a better product or a lower price.
General Need Description
The buyer next prepares a general need description that
describes the characteristics and quantity of the needed item.
Learning Objective
3
p. 195
Figure 6.3: Stages
of the Business
Buyer Decision
Process
p. 195
Key Term: Problem
recognition
p. 196
Ad: Accenture
Digital
p. 196
PPT 6-25
For standard items, this process presents few problems. For
complex items, however, the buyer may have to work with
others—engineers, users, and consultants—to define the
item.
Product Specification
The buying organization next develops the item’s technical
product specifications, often with the help of a value
analysis engineering team.
Product value analysis is an approach to cost reduction in
which components are studied carefully to determine if they
can be redesigned, standardized, or made by less costly
methods of production.
The team decides on the best product characteristics and
specifies them accordingly.
Supplier Search
The buyer now conducts a supplier search to find the best
vendors. The buyer can compile a small list of qualified
suppliers by reviewing trade directories, doing a computer
search, or phoning other companies for recommendations.
Today, more and more companies are turning to the Internet
to find suppliers.
The newer the buying task, the more complex and costly the
item, and the greater the amount of time the buyer will spend
searching for suppliers.
Proposal Solicitation
In the proposal solicitation stage of the business buying
process, the buyer invites qualified suppliers to submit
proposals.
When the item is complex or expensive, the buyer will
usually require detailed written proposals or formal
presentations from each potential supplier.
Supplier Selection
p. 196
Key Terms: General
need description,
Problem
specification
p. 196
Key Terms:
Supplier search,
Proposal solicitation
p. 197
p. 197
PPT 6-26
During supplier selection, the buying center often will draw
up a list of the desired supplier attributes and their relative
importance.
Buyers may attempt to negotiate with preferred suppliers for
better prices and terms before making the final selections. In
the end, they may select a single supplier or a few suppliers.
Many buyers prefer multiple sources of suppliers to avoid
being totally dependent on one supplier and to allow
comparisons of prices and performance of several suppliers
over time.
Order-Routine Specification
The buyer now prepares an order-routine specification. It
includes the final order with the chosen supplier or suppliers
and lists items such as technical specifications, quantity
needed, expected time of delivery, return policies, and
warranties.
In the case of maintenance, repair, and operating items,
buyers may use blanket contracts rather than periodic
purchase orders. A blanket contract creates a long-term
relationship in which the supplier promises to resupply the
buyer as needed at agreed prices for a set time period.
Many large buyers now practice vendor-managed inventory,
in which they turn over ordering and inventory
responsibilities to their suppliers.
Performance Review
The performance review may lead the buyer to continue,
modify, or drop the arrangement.
The eight-stage model provides a simple view of the
business buying-decision process. The actual process is
usually much more complex.
Review Learning Objective 3: List and define the steps in
the business buying decision process.
p. 197
Key Terms:
Supplier selection,
Order-routine
specification
p. 197
Key Term:
Performance review
Assignments, Resources
Use Discussion Question 6-4 here
Use Critical Thinking Exercise 6-7 here
Use Marketing by the Numbers here
Use Video Case here
Troubleshooting Tip
It is often difficult for students to draw a parallel
between business buying and consumer buying even
though the students learned about consumer buying
in the previous chapter. One way to overcome this
difficulty is to have students discuss the differences
in how they buy clothes for themselves, versus how
Macy’s or another department store would buy
clothes to resell.
p. 197
PPT 6-27
PPT 6-28
p. 197
PPT 6-29
p. 198
Discuss how new information technologies and online,
mobile, and social media have changed
business-to-business marketing.
Engaging Business Buyers with Digital and Social
Marketing
E-Procurement and Online Purchasing
Electronic purchasing, or e-procurement, has grown rapidly
in recent years. It is now standard procedure in most
companies.
E-procurement reduces transaction costs and results in more
efficient purchasing for both buyers and suppliers. In turn,
business marketers can connect with customers online to
share marketing information, sell products and services,
provide customer support services, and maintain ongoing
customer relationships.
E-procurement reduces the time between order and delivery.
It also eliminates the paperwork associated with traditional
requisition and ordering procedures and helps an
organization keep better track of all purchases.
Beyond the cost and time savings, e-procurement frees
purchasing people to focus on more strategic issues.
The use of e-procurement also presents some problems.
At the same time that the Web makes it possible for suppliers
and customers to share business data and even collaborate on
product design, it can also erode decades-old
customer-supplier relationships. Many buyers now use the
process to pit suppliers against each other and to search out
better deals, products and turnaround times on a
purchase-by-purchase basis.
Learning Objective
4
p. 197
Key Term:
E-procurement
p. 198
Ad: Staples
p. 199
Business-to-Business Digital and Social Media Marketing
B-to-B digital and social media marketing involves using
these approaches to engage business customers and manage
customer relationships anywhere, anytime.
It isn’t just a concept that is growing; it is exploding. While
digital and social media can create greater customer
engagement, marketers know they aren’t really targeting
businesses, but rather individuals in those businesses who
affect buying decisions.
Review Learning Objective 4: Discuss how new
information technologies and online, mobile, and social
media have changed business-to-business marketing.
p. 198
Key Term: B-to-B
digital and social
media marketing
p. 199
Photo: Maersk Line
Assignments, Resources
Use Real Marketing 6.2 here
Use Online, Mobile, and Social Media Marketing
here
Use Think-Pair-Share 3 here
PPT 6-30
p. 199
p. 199
PPT 6-31
Compare the institutional and government markets and
explain how institutional and government buyers make
their buying decisions.
Institutional and Government Markets
Much of this discussion also applies to the buying practices
of institutional and government organizations. However,
these two non-business markets have additional character-
istics and needs.
Institutional Markets
The institutional market consists of schools, hospitals,
nursing homes, prisons, and other institutions that provide
goods and services to people in their care. Institutions differ
from one another in their sponsors and in their objectives.
Many institutional markets are characterized by low budgets
and captive patrons.
Many marketers set up separate divisions to meet the special
characteristics and needs of institutional buyers.
Learning Objective
5
p. 199
Key Term:
Institutional market
p. 201
Photo: General
Mills
PPT 6-32
Government Markets
The government market offers large opportunities for many
companies, both big and small.
In most countries, government organizations are major
buyers of goods and services. In the United States alone,
federal, state, and local governments contain more than
89,000 buying units that purchase more than $3 trillion in
goods and services each year.
Government organizations typically require suppliers to
submit bids, and normally they award the contract to the
lowest bidder. In some cases, the government unit will make
allowances for the supplier’s superior quality or reputation
for completing contracts on time.
Government organizations tend to favor domestic suppliers
over foreign suppliers.
Government buyers are affected by environmental,
organizational, interpersonal, and individual factors.
One unique aspect of government buying is that it is
carefully watched by outside publics, ranging from Congress
to a variety of private groups interested in how the
government spends taxpayers’ money.
Because their spending decisions are subject to public
review, government organizations require considerable
paperwork from suppliers, who often complain about
excessive paperwork, bureaucracy, regulations,
decision-making delays, and frequent shifts in procurement
personnel.
Most governments provide would-be suppliers with detailed
guides describing how to sell to the government.
Non-economic criteria also play a growing role in
government buying.
Government buyers are asked to favor depressed
business firms and areas; small business firms;
minority-owned firms; and business firms that avoid
race, gender, or age discrimination.
Many firms that sell to the government have not been
p. 201
Key Term:
Government market
marketing oriented.
Total government spending is determined by elected
officials rather than by any marketing effort to
develop this market.
Government buying has emphasized price, making
suppliers invest their effort in technology to bring
costs down.
When the product’s characteristics are specified
carefully, product differentiation is not a marketing
factor.
Nor do advertising or personal selling much matter in
winning bids on an open-bid basis.
Several companies, including GE, Boeing, and Goodyear,
have established separate government marketing
departments. These companies anticipate government needs
and projects, participate in the product specification phase,
gather competitive intelligence, prepare bids carefully, and
produce stronger communications to describe and enhance
their companies’ reputations.
Review Learning Objective 5: Compare the institutional
and government markets and explain how institutional and
government buyers make their buying decisions.
Assignments, Resources
Use Discussion Question 6-5 here
Use Critical Thinking Exercise 6-8 here
Use Small Group Assignment 2 here
Use Individual Assignment 2 here
Use Think-Pair-Share 4 here
Use Company Case here