6 Business Markets and Business Buyer Behavior

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In the previous chapter, you studied final consumer buying behavior and factors that influence it. In this chapter, we’ll do the same for business customers—those that buy goods and services for use in producing their own products and services or for resale to others. As when selling to final buyers, firms marketing to businesses must engage business customers and build profitable relationships with them by creating superior customer value.

To start, let’s look at IBM. Although the IBM brand is very familiar to most final consumers, nearly all of the company’s almost $100 billion in annual revenues comes from business and institutional customers. More than just “selling” its products and services to B-to-B customers, IBM succeeds by working closely and deeply with them to develop complete solutions to their information and data analytics problems. From its lofty customer-solutions mission to the “boots on the ground,” IBM wants to ­become a strategic information and insights partner with its ­business customers.

Photo shows a man talking to a man and woman across a low table. All of them are dressed in formal wear. A large IBM logo is on one of the walls, while another has a large glass separation.

Business-to-business marketing: IBM’s “Cognitive Business: Outthink” ­campaign positions the company as one that works closely with business ­customers to help them thrive in the new “cognitive era.”

NurPhoto/Getty Images

Objectives Outline

  1. Objective 6-1 Define the business market and explain how business markets differ from consumer markets.

  2. Objective 6-2 Identify the major factors that influence business buyer behavior.

  3. Objective 6-3 List and define the steps in the business buying decision process.

  4. Objective 6-4 Discuss how new information technologies and online, mobile, and social media have changed business-to-business marketing.

  5. Objective 6-5 Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions.

IN ONE WAY OR another, most large companies sell to other organizations. Companies such as IBM, Boeing, DuPont, Caterpillar, and countless other firms sell most of their products to other businesses. Even large consumer products companies, which make products used by final consumers, must first sell their products to other ­businesses. For example, General Mills makes many familiar consumer brands—Big G cereals (Cheerios, Wheaties, Trix, Chex, Total, Fiber One), baking products (Pillsbury, Betty Crocker, Bisquick, Gold Medal flour), snacks (Nature Valley, Bugles, Chex Mix), Yoplait yogurt, Häagen-Dazs ice cream, and many others. But to sell these products to consumers, General Mills must first sell them to its wholesaler and retailer customers, who in turn serve the consumer market.

Business buyer behavior refers to the buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. It also includes the behavior of retailing and wholesaling firms that acquire goods to resell or rent to others at a profit. In the business buying process, business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands. Business-to-business (B-to-B) marketers must do their best to understand business markets and business buyer behavior. Then, like businesses that sell to final buyers, they must engage business customers and build profitable relationships with them by creating superior customer value.

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