B
usiness organizations do not only sell. They also buy vast quantities of raw materi-
als, manufactured components, plants and equipment, supplies, and business ser-
vices. Over 13 million business, institutional, and government organizations in the
United States alone—plus millions more in other countries—represent a huge, lucra-
tive buying market for goods and services purchased from both domestic and interna-
tional 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 deliv-
ers superior customer value to the targeted business buyers and be familiar with the
underlying dynamics and process of business buying.
107
Analyzing
Business Markets
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?