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Irwin/McGraw-Hill

Chapter 7: Business and OrganizationalCustomers and Their Buying Behavior

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Irwin/McGraw-Hill

When you finish this chapter, you should

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Chapter 7 Objectives

1. Know who the business and organizational customers are.

2. See why multiple influence is common in business and organizational purchase decisions.

3. Understand the problem-solving behavior of organizational buyers.

4. Know the basic methods used in organizational buying.

5. Understand the different types of buyer-seller relationships and their benefits and limitations.

6. Know about the number and distribution of manufacturers and why they are an important customer group.

7. Know how buying by service firms, retailers, wholesalers, and governments is similar to —and different from— buying by manufacturers.

8. Understand the important new terms.

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Different Types of Customers

Exhibit 7-1

All business and organizational

customers

Producers

Middlemen

Governments

Nonprofits

Manufacturers

Farms, mines, etc.

Financial Institutions

Other providers

National

Local

Federal

State and Local

Wholesalers

Retailers

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Irwin/McGraw-Hill

Buying Centers

BuyingCenter

InfluencersUsers

Gatekeepers Deciders

Buyers

7-4

Exhibit 7-2

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Irwin/McGraw-Hill

Innovation

Survival

Customer satisfaction

Growth

Profit

Other needs

Company’s Needs

Overlapin

Needs

Individual’s Needs

Risk

Job security

Comfort

Career advancement

Money-rewards

Other needs

7-5

Exhibit 7-3

Overlapping Needs

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Irwin/McGraw-Hill

LittleSomeMuch

NoneSomeMuch

LittleSomeMuch

LittleMediumMuch

Information Needed

Review of Suppliers

Multiple Influences

Time Required

CharacteristicsNew-Task

BuyingModifiedRebuy

StraightRebuy

Type of Process

7-6

Exhibit 7-4

Organizational Buying Processes

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Irwin/McGraw-Hill

BasicMethods

Inspection

Description

NegotiatedContracts

Sampling

7-7

Basic Methods in Organizational Buying

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Irwin/McGraw-Hill

Information sharing

Linkages

Cooperation

Legal bonds

Adaptations

RelationshipRelationshipSupplierSupplier CustomerCustomerSalesperson

QualityR&D

AccountingMarketing

Production

Purchasing manager

Quality

Finance

R&D

ProductionAccounting

Engineering

7-8

Exhibit 7-6

Buyer-Seller Relationships

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Irwin/McGraw-Hill

Types of Organizational Buyers

Manufacturers

Service Producers

Retailers &Wholesalers

Governments

Grouped by Industry

Close to Customers

Buying for Targets

Bids & Regulations

Focus:

Focus:

Focus:

Focus:

7-9

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Irwin/McGraw-Hill

Inspection BuyingSampling BuyingDescription BuyingCompetitive BidsNegotiated Contract BuyingJust-in-Time DeliveryReciprocityNAICS CodesOpen to BuyResident BuyersForeign Corrupt Practices Act

Business and Organizational CustomersISO 9000Purchasing ManagersMultiple Buying InfluenceBuying CenterVendor AnalysisNew-Task BuyingStraight RebuyModified RebuyRequisition

7-10

Key Terms