Page 104 - DMGT408DMGT203_Marketing Management

Unit 4: Business Markets and Business Buyer Behaviour

4.7 Summary Notes

Business buying refers to decision-making process by which organisations establish the
need for purchased products and services, and identify, evaluate, and choose among
alternative brands and supplies.
Organisational purchases are described as “rational” or “economic.” Organisations are
large and complex entities and develop preferences, memories, and behaviours through
perceptions, information processing, and experience. The culture prevailing in an
organisation determines relatively stable patterns of behaviours over time and across
situations.

Some organisations are more formal and some other may be more open and informal.
These differences influence the buying behaviour and supplier firms must understand
these differences to best serve the concerned organisation’s needs.
The organisational buying process involves problem recognition, information search,
evaluation of alternatives and selection, final purchase, and the post-purchase evaluation
is formal and extensive.
Purchase is more important and the terms and conditions agreed upon between buyers
and suppliers are more important than in case of personal consumers.

4.8 Keywords

Buying Centres: Group of individuals, potentially from any level within an organisation, either
contributing towards or taking direct responsibility for organisational purchasing decisions
Derived Demand: Demand for one good or service occurs as a result of demand for another.

Gatekeepers: People in the organization who have the power to prevent sellers or information
from reaching the members of buying centers
Inelastic Demand: Situation where the demand for a product does not increase or decrease
correspondingly with a fall or rise in its price.
Modified Re-buy: Situation in which an organisation buys goods that have been purchased
previously but changes either the supplier or some other element of the previous order
Straight Re-buy: A purchase in which the organisation buys the same goods in the same quantity
on the same terms from the same supplier
4.9 Review Questions

1. Analyse the demand and purchase pattern in organisations.
2. Explain the factors that influence the development of culture in an organisation.
3. Differentiate between straight re-buy, modified re-buy and new task. Give examples.
4. Discuss the organisational purchase decision process in brief.

5. Explain various roles played by a decision making unit. Do the roles vary according to
purchase situations?
6. How is business buying different from individual or retail buying?

7. State the strategies that should be adopted by the marketers facing each type of buying
situation.

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