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Objectives
To understand:
• The nature and scope of the B2B market.
• The components that make up the B2B
market.
• The characteristics of the business market
demand.
• The determinants of the business market
demand.
• The buying motives, buying processes, and
buying patterns in business markets.

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 Nature and Scope of B2B Market
• The business (B2B) market consists of
organizations that buy goods and services:
• To make other goods and services.
• To resell to business users or to consumers.
• To be used in the operations of the organizations.

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Nature and Scope of the B2B Market
• Huge in sales volume.

• Significant in terms of the number of firms

involved.

• Largely behind the scenes.

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Components of the Business Market
• Manufacturers
• Resellers
• Government agencies
• Service companies
• Agriculture
• Not-for-profit organizations

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 International Dimension
• 30% of Canada’s GDP is exported.
• A major portion conducted on a B2B basis.

• Continuing to rise due to use of Internet.

• It is important to understand the values,

customs, and business practices and
standards of the foreign-based customer.

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Characteristics of B2B Market Demand

• Derived from demand.

• Demand is inelastic.

• Demand is widely fluctuating.

• Buyers are well-informed.

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 Determinants of B2B Demand
• The business market is quite different from
the consumer market in a number of ways:
• Number and types of business users
• Purchasing power of business customers
• Buying motives and expectations
• Buying habits

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 Business Buying Behaviour
An important part of a strategy because:
1. Companies are making less and buying
more.
2. Firms are under intense quality and time
pressures.
3. Firms are concentrating their purchases
with fewer suppliers and developing long
term “partnering” relationships to get
what they need.
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Buying-Decision Process in Business
1. Need recognition
2. Choice of involvement level
3. Identification of alternatives
4. Evaluation of alternatives
5. Purchase decision
6. Consumption experience

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 Business Buying Motives
• Business buyers are motivated by both
organizational and personal goals.

• Most B2B relationships are a combination

of functional and emotional motives.

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 Types of Buying Decisions
• New Task Buy

• Straight Rebuy

• Modified Rebuy

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 Multiple Buying Influences
• One of the greatest challenges 
Determine which individuals in the
organization play various buying roles.
• Users – those who will use the product/service
• Influencers – often set specifications to follow
• Deciders – make the actual decision to buy
• Gatekeepers – control the flow of information
• Buyers – actually process the purchasing order

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 Business Buying Patterns
• Differs significantly from consumer
behaviour.
• Direct purchase
• Internet purchase
• Nature of the relationship
• Frequency of purchase

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 Business Buying Patterns
• Size of order
• Period of negotiation
• Demand for service
• Dependability of supply
• Leasing instead of buying

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 Bases for B2B Segmentation
• Can use some of the same bases as used to
segment B2C markets.

• Unique to B2B:
• Type of customer
• Size of customer
• Type of buying situation

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