Organizational Buying & Organizational Buying & Buyer BehaviorBuyer Behavior

Chapter 6Chapter 6

Business MarketingBusiness Marketing

““Marketing of goods or services to Marketing of goods or services to commercial enterprises, governments, commercial enterprises, governments, and other profit and non-profit and other profit and non-profit organizations for use in the creation of organizations for use in the creation of goods and services that they then goods and services that they then produce and market produce and produce and market produce and market to other business customers, as market to other business customers, as well as individuals and ultimate well as individuals and ultimate consumers.”consumers.”

Organization BuyersOrganization Buyers

Those manufacturers, wholesalers, Those manufacturers, wholesalers, retailers, or government agencies retailers, or government agencies which are buying the goods.which are buying the goods. Could be for their own consumption or Could be for their own consumption or

resale resale

What’s the difference between What’s the difference between wholesale/retail and manufacturers?wholesale/retail and manufacturers?

Organizational BuyersOrganizational Buyers

Three typesThree types Industrial marketsIndustrial markets Reseller marketsReseller markets Government marketsGovernment markets

Researching These MarketsResearching These Markets

SICSIC→NAICS→NAICS North American Industry Classification North American Industry Classification

SystemSystem Important researching toolImportant researching tool

Organizational Buying Organizational Buying CharacteristicsCharacteristics

Demand CharacteristicsDemand Characteristics Size of the Order or PurchaseSize of the Order or Purchase Number of Potential BuyersNumber of Potential Buyers Organizational Buying ObjectivesOrganizational Buying Objectives Organizational Buying CriteriaOrganizational Buying Criteria Buyer-Seller Relationship and Supply Buyer-Seller Relationship and Supply

PartnershipsPartnerships The Buying CenterThe Buying Center

B2B CharacteristicsB2B Characteristics

Demand characteristicsDemand characteristics Derived demandDerived demand

Size of the Order or PurchaseSize of the Order or Purchase Much largerMuch larger

Number of Potential BuyersNumber of Potential Buyers Fewer number of buyersFewer number of buyers

B2B CharacteristicsB2B Characteristics

Organizational Buying ObjectivesOrganizational Buying Objectives Why do they buy the products?Why do they buy the products?

Organizational Buying CriteriaOrganizational Buying Criteria What criteria do they use in choosing a What criteria do they use in choosing a

vendor?vendor? ISO 9000ISO 9000 Reverse marketingReverse marketing

Wal-Mart and RFID Wal-Mart and RFID

Buyer-Seller Relationship and Buyer-Seller Relationship and Supply PartnershipsSupply Partnerships

B2B- Lengthy negotiations and B2B- Lengthy negotiations and contractscontracts ReciprocityReciprocity Supply partnershipsSupply partnerships

P&G & Wal-MartP&G & Wal-Mart

The Buying CenterThe Buying Center

Can be a person or committeeCan be a person or committee RolesRoles

UsersUsers InfluencersInfluencers BuyersBuyers DecidersDeciders GatekeepersGatekeepers

Buying ClassesBuying Classes Straight rebuyStraight rebuy Modified rebuyModified rebuy New buyNew buy

B2B Buying ProcessB2B Buying Process

Problem RecognitionProblem Recognition Make-buy decisionsMake-buy decisions

Information SearchInformation Search Value analysisValue analysis

Alternative EvaluationAlternative Evaluation Bidder’s listBidder’s list

Purchase DecisionPurchase Decision Post-purchase BehaviorsPost-purchase Behaviors

B2B OnlineB2B Online

80% of all total dollar value of all 80% of all total dollar value of all online transactionsonline transactions

E-MarketplacesE-Marketplaces Online auctionsOnline auctions

Traditional auctionsTraditional auctions Reverse auctionsReverse auctions