Principles of Marketing : Chapter 6 (business buying behavior)

In the previous chapter we discussed the buying behavior of the customers, in this chapter, we will elaborately discuss the buying behavior in business markets. So business buying behavior is basically the purchase behavior of a company that buys goods or services for further processing or the goods/products are sold to other business, lease out to other suppliers. Like in consumer buying behavior (CBB), black box in the business market is known as buying centers.  Like in consumer buying behavior (CBB), the environment is same for the business market as well, but through buying centers and the process of buying is different for every organization through which buying behavior is also different. What makes (CBB) with business buying behavior (BBB) is the change in market structure and demand. Since the transaction is solely (B2B) business to business so there are few buyers and few sellers. The Second one is Geographic concentration, a product is manufactured through different parts and these parts are imported from different parts of the world, the case of iPhone. Price remains "In-elastic" (for example when the price of petrol (gasoline) increases, the demand somehow remain constant or the impact on demand is very less). And lastly, the buyer is solely dependent on the seller or the supplier.

The types of buying situations in BBB are of three types 1) Straight Re-Buy: when in the consignment, there is no modification, like supplying stationery to Bahria University, the order will remain constant. 2). Modify re-buy: when a customer changes their purchase behavior on the basis of price, quantity, or suppliers, 3) New task: when your buying behavior is developed on the basis of something new or new product development.

Buying centers as discussed above are those specific entities who are involved in the buying process. The intensity of the power in buying behavior depends on the position that entity holds. It consists of 5 types. 1). Users are basically the customer who consume a particular product. 2) Influencers are technical people who define specifications and provide information. 3) Buyers are basically the procurement department which has the power of selecting the suppliers and consignments. 4) Deciders are the top management who put a final decision of selection it can be the finance department. 5) Gatekeepers basically control and circulate the information it can be the office secretary

Moving forward with the Business buying behavior process. This process is more complexed and elongated than the consumer buying behavior process. The main reason behind it is the involvement of more cost and technicalities. The first part is Problem recognition (it can be through internal, within organization or external (outside organization). The company will see if there is any problem or any shortage of any supplies. The second part is General need description where we quote the quantity of the goods needed to eliminate the problem. Product specification describes the technicalities of the products which are required. For example, if the company wants to buy several computers, general need description tells us, we need 20 computer and product specification tell you we need quad core intel process i7. Value analysis describes the process of reducing cost and find the best alternative to reduce the price. Since Tender is opened and a lot of suppliers bid on it, supplier selection criteria involve critically select suppliers on the basis of cost reduction and value creation. Through a rigorous process, few of the suppliers are selected from a vast pool and then they were asked to submit the proposal of intent (proposal solicitation). After carefully examining the proposal one supplier is selected, which fits best for the job. After that, the company places few orders to the supplier (order routine specification) and after the consignment is delivered the company gives the performance evaluation review of it.

Lastly, the world is changing day by day because the technology is changing day by day. There comes the invention of E-Procurement. It is basically to facilitate both the buyer and seller. It helps to optimize the above-mentioned process in an easy way. You can approach or select buyer from any part of the world, easy to communicate and easy to put an order on the website.


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