Do you have a business? And want to learn more about the business market then you are at the right place. The business market is a market where one business buys or sells its product to another business.
If you buy any product to use in the office then that is also a part of the business market so here I will discuss all about the business market like, how companies buy products and manage their buying situations etc. And that also helps you to grow your business in the next level.
What can I learn from here?
- Definition of the business market.
- Organizational buying
- Difference between the business market & consumer market.
- business buyer’s buying situations
- Participates of business buying process
- Businesses buying process
- business marketing programs and customer loyalty
- Frequently asked questions.
Definition of the business market
When a business buys or sells a product to other businesses, where the final consumer is not involved, that market is called the business market.
Examples like, If a company does not make its product and they buy products from other companies and resell. And if a company buy products from other company to use in their company like machines, tools etc.
Organizational Buying in the Business market
Organizational buying is a process where business buyers make decisions about what product or raw material they required to buy and from whom they can buy a better product in a cheap amount.
Difference between Business Market & Consumer Market
The business market is the market where two businesses sell and buy products from each other. But in the consumer market, a business sells its product or service to its final consumers.
Don’t know about consumer buying process? Check our blog.
In the business market, the company deals with a few amount of buyers, but the buyer buys for reselling so they buy a large quantity.
And in the consumer market because the business sells the product to final consumers so it deals with a large number of buyers but the consumer buys a small number of products.
In the business market, buying of raw material or products, they buy products by deciding all together or by a team meeting, but in the consumer market, they make buying decisions individually or discuss with close people.
In business buying the buyers buy products or raw materials directly from the manufacturers by dealing best price with them but in the consumer market, they do not buy directly from the manufacturer they buy from a retailer who either buys from a manufacturer or a wholesaler.
The demand for products in the business market is connected with the demand of the consumer market. If a product’s demand increases in the consumer market then in the business market also that raw materials demand increases
Business buyer’s Buying Situations in Business Market
Business buyers face many situations, like whether they have to solve a big problem for the company or they required to buy a new product, etc.
So depend upon that they face three types of buying situations straight rebuy, modified rebuy, and new task.
In this situation, they have to buy the daily required products for the company. In this situation, they make a process or deal with the supplier that when the product gets out of stock then the supplier supplies that product automatically.
Because it is a regular need so it’s easy to decide and make a process so that they can save their time and energy.
If the business buyer wants some changes in their product and service like specifications, price, etc then they face this type of situations. Because it is very important to buy raw materials according to the product changes so that here buyers buy the product by doing some internal discussion
If the business buyer has to buy a product or service for the first time then that situation is called a new task. If a company wants to build an office building then they have to take decisions together.
Participates of the business buying process in the Business Market
In companies, they purchase a very large amount of raw materials or products to reproduce and resell. Because they purchase large amount so they make decisions by making a team. And that team is called the buying centre.
The Buying Center
The members of the buying centre mainly play seven roles in the buying process. These are Initiator, users, influencers, deciders, approvers, buyers, and also gatekeepers.
- Initiators are those who tell the company about their required product or service.
- Users are those who use the company’s product or service. And that user also tells the company about the required product or service and can become an initiator.
- Influencers are those who influence buying decisions by getting more information about good products and also comparing all these products they can help the company to buy that product.
- Deciders are those who decide whether that product required or not.
- Approvers are those who give authorization to the decider and also buyer.
- Buyers are those who finally select the supplier by negotiating them about the best deal for that product and service.
- Gatekeepers are those who have the overall power to decide that they can prevent the seller.
Business Buying Processes in the Business Market
Video source: study with chanchal
There are eight steps involved in the business buying process. Here are those:
The buying process starts when a company’s employee or any person in that company faces any problem with the machine or any product and it is required to replace buy a new one.
And it also starts when a company wants to lunch a new product and they required a new machine or service.
Or if the buyer of that company sees any ad that offers a better product at a low price then also the buying process starts.
General need Description:
After recognizing the required product or service the buyer’s next task is to determine what characteristics should have that product and how many are needed.
If the product is a high amount then the buyer has to work with other departments.
After that, the buyer has to discover what type of specification required that product. But in big companies, the engineers specify the product’s technical aspects. And according to the requirement, the engineers design and also evaluate the alternatives
After identifying the company’s need, quantity, and specifications, so now the next step is identifying a supplier.
So now you have to find who gives you a good product or service at a good price. The company may search for suppliers on the internet, trade directories, advertisement, and also contact with other companies. And select few suppliers
After a search, you have to find who gives you products according to your requirement.
But in a big company, the buyers invite some selected suppliers to submit written proposals. After that, they choose some specific supplier among them and then invite them to make a presentation.
And among them, you can choose a supplier who gives you a better product.
In big companies after choosing some specific suppliers then the buying centre rates the desired supplier’s attribute. Whose attribute ranks first then the buyer selects that supplier.
Order Routine Specification:
So after choosing the supplier now you can give them an order. In big companies the buyer negotiates with the supplier about the technical specification, what quantity they required, the products return policy, warranties, and the expected delivery time and then place an order.
After that, the buyer reviews the supplier’s performance. Whether they supply us good quality products on time or not.
If they satisfied with that supplier then they continue with them if they don’t then they can change the supplier.
Because this is a business buying process so all those steps involved in the buying process will be recorded in a document file.
How to Develop Marketing Program & Customer Loyalty in Business Market?
We have to add additional value to our product and service to attract customers. We have to develop referral programs.
And importantly we also have to communicate our product’s benefits and our additional services with the target companies. We have to make our branding properly.
In the business market many buyers always prefer to buy all the products from a single supplier to save cost, time, and energy that process is called systems buying. So as a seller we have to design our marketing strategy according to that so we can satisfy the buyer’s all needs and wants.
So to maintain a strong relationship with our customers we can provide fast delivery, a superior product, and service benefits, we can design our product and service according to the needs and wants of the buyer.
If you have a business then, you also have to buy your business products by these steps. But at the time of buying you can maintain all the documentation with the manufacturer.
If your business is small then you don’t have to build all those departments to buy. But you have to follow those steps.
Suppose you make bread at home and sell. Here we see how a buying process happens. When you see the wheat flour(maida) is about to finish. Then your buying process starts.
After that, you may decide how much and what quality I required. After that you may search for shops that give me my desired quality flour.
And then you make a purchase. If the supplier is giving you a good product then you continue with that supplier. Otherwise, you change the supplier.
It is a market where business depends upon another business to buy or sell its product. If a company manufacture bicycles but to produce a bicycle they need iron or aluminium, plastic, etc. So they buy this product from another company that manufactures this type of material. That purchase where happens that is called the business market.
In the business market, the products or services sell or buy happens between the companies. Here one company purchase product from other company to resell. In business market product is not used by the final consumer but in the consumer market, the product is purchased by the end-users. So this way the consumer market and business market differ from each other.
Business buyers face three types of buying situations the first one is the company’s product which regularly required to run business, for this situation they simply make a deal with their regular supplier. In the second situation forms when the buyer wants to change some product specification or want to produce a new product this is a little risky decision so the whole team makes the decisions together.
And the third situation form when a company wants to build a new building or any work who take more time and money then also all team member who is responsible for this task take decisions together.