And Buyer Behavior

We will address the following questions:

■ What is the business market, and how does it differ from the consumer market?

■ How do institutions and government agencies do their buying?

■ What buying situations do organizational buyers face?

■ Who participates in business buying, and what are the influences on business buying decisions?

■ How do business buyers make their decisions?

Business organizations do not only sell. They also buy vast quantities of raw materials, manufactured components, plants and equipment, supplies, and business services. Over 13 million business, institutional, and government organizations in the United States alone—plus millions more in other countries—represent a huge, lucrative buying market for goods and services purchased from both domestic and international suppliers.

Business buyers purchase goods and services to achieve specific goals, such as making money, reducing operating costs, and satisfying social or legal obligations. For example, a mini-mill steelmaker like Nucor will add another plant if it sees a chance to boost profits, upgrade its computerized accounting system to reduce operating costs, and add pollution-control equipment to meet legal requirements.

In principle, a business buyer seeks to obtain for his or her organization the best package of economic, technical, service, and social benefits in relation to a market offering's costs. In reality, a business buyer (like a consumer) will have more incentive to choose the offering with the highest ratio of perceived benefits to costs—that is, the highest perceived value. The marketer must therefore provide an offering that delivers superior customer value to the targeted business buyers and be familiar with the underlying dynamics and process of business buying.

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