Chapter 7: Analysing Business Markets

The Business Market Vs Consumer Market

Differences between B2B (Business to Business) and B2C (Business to Customer) markets

• Fewer, Larger buyers in B2B
• Closer Suplier-Customer Relationship due to higerr magnitude of business
• Professional Purchasing Department in bing businesses, more formal, less flexible, tough to negotiate with, lots of rules and regulations to be followed.
• Several Buying influences: The interacting person may not be the decsion maker.
• Multiple Sales Calls-it takes longer and lots of efforts to win trust of the customer.
• Derived Demand: Many a times the demand for B2B is derived from demand from B2C- demand for cars goes up, demand for steel in car making companies also goes up.
• Inelastic Demand: B2B demand is not much affected by the price fluctuations till the time great changes can be made in the production process or a substitue product comes in.
• Fluctuating Demand: B2B demand more volatile than B2C demand due to accelaration effect (10% increase in customer demand for cotton shirts brings 200% rise in cotton bale demand)
• Geographically concentrated customers
• Direct Purchasing from the manufacturers than from intermediaries.

Buying Situations

• Straight Re-Buy: Purchasing dept. reorders at a regular basis.
• Modified Rebuy: Before reodering customer modifies the order
• New Task: First time buyer.

Systems Buying and Selling- Prime contrator to deliver a turn key final product and take care of all subcontractors, materials for production etc.

Participants in Business Buying Process

Buying centers (Initiators, Users, influencers, deciders approvers, buyers, gatekeepers)