UNIVERSITY OF CEBU (UC)
GRADUATE SCHOOL
Sanciangko St., Cebu City
REACTION PAPER IN
MARKETING MANAGEMENT (BM 207)
Masterand: Agnes C. Ampo Course: MBA
Professor: Dr. Eddie E. Llamedo Schedule: BL1 Sat, 12:00nn-4:30pm
Chapter 6 – Business Markets and Business Buyer Behavior
Introduction
Market is consists of two markets. The consumer market which we have with
the previous chapter and the business market. In business market, this happens
when large companies sell to other organizations, the retailer and wholesaler
customers, who in turn serve the consumer market. There is where “B2B”, business
to business happens, . The business marketer must know the major players in the
industry, and how they can influence them. They must know how to influence each
participant in the business cycle, and know how to influence the buying process.
Topic Summary
The business market comprises all organizations that buy goods and services
for use in the production of other products and services or for the purpose of
reselling or renting them to others at a profit. As compared to consumer markets,
business markets usually have fewer but larger buyers. Business demand is derived
demand, which tends to be more inelastic and fluctuating than consumer demand.
The business buying decision usually involves more and more professional, buyers.
Business buyers usually face more complex buying decisions, and the buying
process tends to be more formalized. Finally, business buyers and sellers are often
more dependent on each other. Business buyers make decisions that vary with the
three types of buying situations: straight rebuys, modified rebuys, and new tasks.
The decision-making unit of a buying organization—the buying center—can consist
of many different persons playing many different roles. The business marketer needs
to know the following: Who are the major buying center participants? In what
decisions do they exercise influence and to what degree? What evaluation criteria
does each decision participant use? The business marketer also needs to
understand the major environmental, organizational, interpersonal, and individual
influences on the buying process. The business buying decision process itself can
be quite involved, with eight basic stages: problem recognition, general need
description, product specification, supplier search, proposal solicitation, supplier
selection, order-routine specification, and performance review. Buyers who face a
new task buying situation usually go through all stages of the buying process. Buyers
making modified or straight rebuys may skip some of the stages. Companies must
manage the overall customer relationship, which often includes many different
buying decisions in various stages of the buying decision process. Recent advances
in information technology have given birth to “e-procurement,” by which business
buyers are purchasing all kinds of products and services online. The Internet gives
business buyers access to new suppliers, lowers purchasing costs, and hastens
order processing and delivery. However, e-procurement can also erode customer-
supplier relationships and create potential security problems. Still, business
marketers are increasingly connecting with customers online to share marketing
information, sell products and services, provide customer support services, and
maintain ongoing customer relationships The institutional market consists of schools,
hospitals, prisons, and other institutions that provide goods and services to people in
their care. These markets are characterized by low budgets and captive patrons. The
government market, which is vast, consists of government units—federal, state, and
local—that purchase or rent goods and services for carrying out the main functions
of government. Government buyers purchase products and services for defense,
education, public welfare, and other public needs. Government buying practices are
highly specialized and specified, with open bidding or negotiated contracts
characterizing most of the buying. Government buyers operate under the watchful
eye of the U.S. Congress and many private watchdog groups. Hence, they tend to
require more forms and signatures and respond more slowly and deliberately when
placing orders.
Recommendation
The report was understandable. It helped that plenty of examples were
provided for us to put it on real life scenarios. The voice modulation was good; we
can clearly hear the voice at the back. It will help if the reporter asks her co
masterands to participate the discussion like letting them read the texts and ask
them to give them examples based on their understanding.
Conclusion
Business markets and consumer markets are alike in some key ways. For
example, both include people in buying roles who make purchase decisions to
satisfy needs. But business markets also differ in many ways from consumer
markets. For one thing, the business market is huge, far larger than the consumer
market.