Page 217 - Foundations of Marketing

184 Part 3 | Customer Behavior and E-Marketing

Joint Demand

Certain business products, especially raw materials and components, are subject to joint
demand. Joint demand occurs when two or more items are used in combination to produce a
product. Consider a firm that manufactures computers. The firm will need the same number of
CPUs as it does computer screens—these two products thus are demanded jointly by the firm.
joint demand Demand
involving the use of two or If a shortage of CPUs exists because of increased industry demand or reduced manufacturer
more items in combination to productivity, the manufacturer buys fewer computer screens and produces fewer computers.
produce a product Understanding the effects of joint demand is particularly important for a marketer that sells
business (organizational) multiple jointly demanded items. Such a marketer realizes that when a customer purchases
buying behavior The purchase one of the jointly demanded items, an opportunity exists to sell related products.
behavior of producers, govern-
ment units, institutions, and Fluctuating Demand
resellers
buying center The people Because the demand for business products is derived from consumer demand, it is subject to
within an organization who dramatic fluctuations. In general, when consumer products are in high demand, producers buy
make business purchase large quantities of raw materials and components to ensure that they can meet long-run produc-
decisions tion requirements. These producers may expand production capacity to meet demand as well,
which entails acquiring new equip-
ment and machinery, more workers,
In the Next Five Years, Which Business-Related and more raw materials and compo-
Products Will Decline? nent parts. Conversely, a decline in
demand for certain consumer goods
reduces demand for business prod-
Snapshot • Zip Drives to surprising temporary changes in
ucts used to produce those goods.
• Tape Recorders
Sometimes, price changes lead
demand. A price increase for a busi-
• Palm Pilots
ness product initially may cause
• Cubicles
business customers to buy more of
the item because they expect the
• Desktop Computers
• Rolodexes
Similarly, demand for a business

• Fixed Schedules price to continue to rise in the future.
product may decrease significantly
• Business Attire following a price cut because buyers
are waiting for further price reduc-
tions. Fluctuations in demand can
be substantial in industries in which
prices change frequently.
Source: Fortune Magazine, November 12, 2012.

LO 4 . Understand the buying BUSINESS BUYING DECISIONS
center and the stages of the
business buying decision pro-
Business (organizational) buying behavior refers to the purchase behavior of producers,
cess and the factors that affect
government units, institutions, and resellers. Although several factors that affect consumer
this process.
buying behavior (discussed in Chapter 6 ) also influence business buying behavior, a number
of factors are unique to businesses. In this section, we first analyze the buying center to learn
who participates in business buying decisions. Then we focus on the stages of the buying
decision process and the factors that affect it.

The Buying Center

Relatively few business purchase decisions are made by a single person. Often they are made
through a buying center. The buying center is the group of people within the organization

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