Chapter 8: Business Markets and Buying Behavior 167
4. You might want to ask “Who plays what roles in the family when a Wii video game console is
purchased?” Children (and perhaps their parents) are the users and influencers. The mother may be
the decider and the father the buyer. Older children may be the gatekeepers who control the flow of
information to the parents. Grandparents might also be the buyers, while the parents may play the
roles of deciders and gatekeepers. The point is that, to be successful, marketers must target the entire
buying center (or family). Focusing an entire sales presentation on the user may not be effective if the
decider is not persuaded.
Class Exercise 2: Inspection Methods
The purpose of this exercise is to allow students to demonstrate their understanding of different
purchasing methods. Each product is typically purchased by the following methods:
Business purchases can be made by several methods, including description, inspection, sampling, and
negotiation. Which method is most often used for each of the following products?
Question
Answer
1.
Grain
sampling
2.
Used vehicles
inspection
3.
Office space
inspection, negotiation
5.
negotiation
6.
Computer and printer
inspection
7.
Office furniture
inspection
8.
Pens and pencils
description
9.
Eggs
description
10.
Assembly line equipment
inspection, negotiation
168 Chapter 8: Business Markets and Buying Behavior
CHAPTER QUIZ
1. Reseller markets consist mainly of ____________.
a. consumers
b. retailers
c. wholesalers and retailers
d. manufacturers
e. industrial users
2. Abbott’s Office Supplies buys furniture and filing cabinets from Craine Furniture. Craine buys
paper, pens, and folders from Abbott’s. The two firms are engaged in_____________.
a. cross-selling
b. tying agreements
c. producer marketing
d. reciprocity
e. competitive bidding
3. If a business owner buys parts by specifying the quantity, grade, and other attributes, which buying
method is he or she using?
4. Administrative assistants that control the flow of information to other people in the organization
often play the ________ role in the buying center.
a. gatekeeper
b. user
c. influencer
d. buyer
e. controller
Chapter 8: Business Markets and Buying Behavior 169
SEMESTER PROJECT
Chapter 8 explains that different types of organizations market to each other. Business-to-business
marketing offers a wealth of career opportunities to marketing students. In this exercise, explore the
opportunities within this field.
Step 1: A frequent position within B2B marketing is purchasing manager. In this step, research the
position of purchasing manager. What types of firms hire purchasing managers?
170 Chapter 8: Business Markets and Buying Behavior
ANSWERS TO DISCUSSION AND REVIEW QUESTIONS
1. Identify, describe, and give examples of the four major types of business markets.
The four major types of business markets are producer markets, reseller markets, government
markets, and institutional markets.
The producer market consists of individuals and business organizations which purchase products to
2. Why might business customers generally be considered more rational in their purchasing
behavior than ultimate consumers?
Business customers usually seek and obtain more information about the product before purchasing
3. What are the primary concerns of business customers?
A business customer’s primary considerations when making purchasing decisions fall within the areas
of price, product quality, service, and supplier relationships. Price influences operating costs and costs
4. List several characteristics that differentiate transactions involving business customers from
consumer transactions.
Business-customer transactions differ from consumer transactions in several ways. Orders tend to be
5. What are the commonly used methods of business buying?
Most business customers use one or more of the following methods: description, inspection,
Chapter 8: Business Markets and Buying Behavior 171
6. Why do buyers involved in straight rebuy purchases require less information than those
making new-task purchases?
The straight rebuy purchase is a routine procedure. The specifications and terms are set and all major
7. How does demand for business products differ from consumer demand?
8. What are the major components of a firm’s buying center?
9. Identify the stages of the business buying decision process. How is this decision process used
when making straight rebuys?
The stages of the business buying decision process are (1) recognizing the problem, (2) establishing
10. How do environmental, business, interpersonal, and individual factors affect business
purchases?
The influence of these factors varies depending on different factors such as different buying
11. What function does an industrial classification system help marketers perform?
An industrial classification system is a ready-made tool which allows marketers to divide
172 Chapter 8: Business Markets and Buying Behavior
ANSWERS TO APPLICATION QUESTIONS
1. Identify organizations in your area that fit each business market category: producer,
reseller, government, and institutional. Explain your classifications.
Student answers will vary, but they should fit the following general classifications described in
the text:
• Producer markets purchase products to use to produce other products.
• Institutional markets are organizations with non-business goals.
2. Indicate the method of buying (description, inspection, sampling, or negotiation) an
organization would be most likely to use when purchasing each of the following items.
Defend your selections.
a. A building for the home office of a light bulb manufacturer: negotiation
3. Purchases by businesses may be described as new–task, modified rebuy, or straight rebuy.
Categorize the following purchase decisions and explain your choices.
a. Bob has purchased toothpicks from Smith Restaurant Supply for 25 years and recently
placed an order for yellow toothpicks rather than the usual white ones.
b. Jill’s investment company has been purchasing envelopes from AAA Office Supply for a
year and now needs to purchase boxes to mail year–end portfolio summaries to clients.
Jill calls AAA to purchase these boxes.
c. Reliance Insurance has been supplying its salespeople with small personal computers to
assist in their sales efforts. The company recently agreed to begin supplying them with
faster, more sophisticated computers.
4. Identifying qualified customers is important to the survival of any organization. NAICS
provides helpful information about many different businesses. Find the NAICS manual at
the library or online at www.naics.com and identify the NAICS code for the following items.
a. Chocolate candy bars: 311320 or 311330
Chapter 8: Business Markets and Buying Behavior 173
5. Using the prompt in the text, rank each of the following variables from 1 to 5 when
making the choice to produce and sell genetically modified (GMO) or non-GMO corn. 1
is the most important variable, whereas 5 is the least important. Based on health,
environment, and dependency on foreign energy sources, what would you do as a
farmer purchasing seed for next year’s crop?
This question helps students to understand the complexity of making business buying decisions.
Students are asked to consider five variables when making their decisions:
1. Safety to the environment
174 Chapter 8: Business Markets and Buying Behavior
ANSERS TO INTERNET EXERCISE
Boeing is the world’s leading aerospace corporation and the largest manufacturer of commercial
and military aircraft. Visit the company’s website at www.boeing.com.
1. At what types of business markets are Boeing’s products targeted?
Boeing targets several B2B markets. With its commercial airplanes, it targets producer markets
2. How does Boeing address some of the concerns of business customers?
The four primary concerns of business customers are price, quality, service, and supplier
3. What environmental factors do you think affect demand for Boeing products?
Demand for Boeing products could be influenced by several environmental factors. Student answers
may include the following:
• Political: government spending, debates over the role of aerospace, debates over government
Chapter 8: Business Markets and Buying Behavior 175
ANSWERS TO DEVELOPING YOUR MARKETING PLAN
The information obtained from these questions should assist students in developing various aspects of
your marketing plan found in the “Interactive Marketing Plan” exercise at www.cengagebrain.com.
1. What are the primary concerns of business customers? Could any of these concerns be
addressed with the strengths of your company?
Marketing to business customers involves the same groups and the same purposes, but there are
2. Determine the type of business purchase your customer will likely be using when purchasing
your product. How would this impact the level of information required by the business when
moving through the buying decision process?
The answers to this question will be as varied as the students’ products.
3. Discuss the different types of demand that the business customer will experience when
purchasing your product.
Again, the answers to this question will be as varied as the students’ products. Students can refer to
176 Chapter 8: Business Markets and Buying Behavior
COMMENTS ON THE CASES
VIDEO CASE 8.1: DALE CARNEGIE FOCUSES ON BUSINESS
CUSTOMERS
Summary
This case shows how a company that provides a valuable service thrives in the B2B market. Dale
Questions for Discussion
1. How would you apply Dale Carnegie’s methods if you were trying to make a sale to a
company with a large buying center?
The buying center is the group of people involved in making such purchase decisions. Dale
2. From a marketing perspective, why would people who work for the U.S. Department of
Veteran Affairs be as interested in taking a Dale Carnegie course as people who work for
American Express?
Government agencies such as the Department of Veterans affairs have customers too—the people
3. Which concerns of business customers should Dale Carnegie’s marketers pay close attention
to when selling training services to a company like American Express?
Although all four concerns (price, quality, service, and supplier relationships) may have a role,
Chapter 8: Business Markets and Buying Behavior 177
CASE 8.2: BOMBARDIER SERVES MULTIPLE BUSINESS
MARKETS
Summary
Founded over sixty years ago, Bombardier got its start selling Ski-Doo snowmobiles in Quebec
province, Canada. The machines are a winter transportation necessity in many parts of snowy
Questions for Discussion
1. How does derived demand apply to the demand for commercial jets purchased by airlines?
What are the implications for Bombardier’s marketing efforts?
Demand for commercial jets purchased by airlines is related to demand for consumer air travel.
When demand for consumer air travel is up, demand for commercial jets (such as those made by
2. When an airline wants to order new jets to replace older jets in its fleet, do you think it
would approach the decision as a new-task purchase, a straight rebuy, or a modified rebuy
purchase? Explain. Also, which methods of business buying are Bombardier’s customers
most likely to use? Why?
An airline that plans to replace older jets with new jets should approach the purchase as a new–
task purchase. The reason is that jet technology is always advancing, jets are expensive and
3. In which stage of the business buying decision process is Bombardier’s reputation likely to
have the most influence on a government that is considering the purchase of new subway
cars?
Bombardier’s reputation is especially important during the stage of the business buying decision
process when customers are searching for and evaluating possible suppliers. If Bombardier has a