4.2 Buyers and Buying Situations in a B2B Market

B2B markets involve complex buying situations with various types of buyers. Commercial enterprises, government agencies, and institutions all make purchases to support their operations, each with unique needs and processes.

B2B buying situations range from new tasks to straight rebuys, with different levels of risk and decision-making involved. Multiple roles contribute to the purchasing process, including initiators, users, influencers, deciders, buyers, and gatekeepers.

Types of Buyers and Buying Situations in B2B Markets

Types of B2B buyers

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• Commercial enterprises purchase goods and services to support their business operations
  • Manufacturers transform raw materials into finished products (General Motors, Boeing)
  • Service businesses provide intangible offerings to customers (banks, consulting firms)
  • Retailers sell products directly to end consumers (Walmart, Target)
  • Wholesalers distribute goods to other businesses for resale (Sysco, McKesson)
• Government agencies procure goods and services to carry out public functions at various levels
  • Federal agencies operate at the national level (Department of Defense, NASA)
  • State agencies serve the needs of individual states (California Department of Transportation)
  • Local agencies focus on city or county-level requirements (New York City Department of Education)
• Institutions are organizations that serve specific societal needs
  • Hospitals provide healthcare services to patients (Mayo Clinic, Johns Hopkins Hospital)
  • Schools educate students at various levels (Harvard University, public school districts)
  • Non-profit organizations pursue missions that benefit society (American Red Cross, Habitat for Humanity)

B2B buying situations

• New task buying involves a first-time purchase of a product or service
  • Requires extensive problem-solving and information gathering to evaluate options
  • Perceived risk is high due to lack of prior experience (selecting a new ERP system)
• Modified rebuy occurs when a routine purchase requires minor modifications
  • Involves moderate problem-solving and information gathering to assess changes
  • Perceived risk is moderate as the buyer has some familiarity with the purchase (upgrading office computers)
• Straight rebuy is a routine, recurring purchase with minimal changes
  • Requires little problem-solving and information gathering as the need is well-defined
  • Perceived risk is low due to the buyer's extensive experience with the purchase (restocking office supplies)

Roles in B2B purchasing

• Initiators identify a problem or need and request a product or service to address it
  • May be end-users, managers, or other stakeholders (production manager requesting new equipment)
• Users are the individuals or groups who will actually use the purchased product or service
  • Provide valuable feedback and input on requirements and specifications (factory workers using a new machine)
• Influencers provide information, advice, and recommendations to guide the purchasing decision
  • Help define specifications, evaluate options, and assess potential suppliers (engineering department)
• Deciders have the authority to make the final decision and choose the supplier
  • Consider input from other participants and align the decision with organizational goals (purchasing manager)
• Buyers are responsible for formally selecting suppliers and negotiating terms and conditions
  • Work with deciders to execute the purchase and establish contractual agreements (procurement specialist)
• Gatekeepers control the flow of information and manage access to decision-makers
  • May screen communications, filter information, and facilitate or hinder the purchasing process (executive assistant)

Organizational Buying Process

• The buying center, consisting of various roles mentioned above, collaborates throughout the procurement process
• Steps in the process often include:
  • Identifying needs and creating specifications
  • Conducting vendor evaluation to assess potential suppliers
  • Issuing a request for proposal (RFP) to solicit detailed offers from vendors
  • Negotiating terms and selecting a supplier
• Organizational buying behavior is influenced by various factors, including company policies, budget constraints, and industry norms
• Effective supply chain management ensures smooth coordination between buyers and suppliers throughout the purchasing process