Executive Summary

Consumer behavior is influenced by cultural, social, and personal factors and by four psychological processes: motivation, perception, learning, and memory. The typical consumer buying process follows this sequence: problem recognition, information search, evaluation of alternatives, purchase decision, and postpurchase behavior. The attitudes of others, unanticipated situational factors, and perceived risk may all affect the decision to buy, as will consumers’ postpurchase product satisfaction, use and disposal, and the company’s actions. Behavioral decision theory helps marketers understand situations in which consumers make seemingly irrational choices.

Organizational buying is the process by which formal organizations establish a need for purchased goods and services, then identify, evaluate, and choose among alternative brands and suppliers. The business market consists of all the organizations that acquire goods and services used in the production of goods or services that are sold, rented, or supplied to others. The institutional market includes schools and other institutions that provide goods and services to people in their care. Governments are also major buyers of goods and services.

Compared to consumer markets, business markets have fewer and larger buyers, closer relationships with suppliers, and more geographically concentrated buyers. Demand in the business market is derived from demand in the consumer market and fluctuates with the business cycle. Three types of buying situations are the straight rebuy, modified rebuy, and new task. The buying center consists of initiators, users, influencers, deciders, approvers, buyers, and gatekeepers. The business buying process consists of eight buyphases: (1) problem recognition, (2) general need description, (3) product specification, (4) supplier search, (5) proposal solicitation, (6) supplier selection, (7) order-routine specification, and (8) performance review. Business marketers seek to form strong relationships with their customers, considering the benefits of vertical coordination and the challenges of opportunism.

 
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