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Chapter 7

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CISCO Targets Businesses

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W hat is Organizational Buying?Organizational buying refers to the decision-making process by which formal organizationsestablish the need for purchased products and

services, and identify, evaluate, and chooseamong alternative brands and suppliers.

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Characteristics of Business Marketsy Fewer, larger buyersy Close supplier-customer

relationshipsy Professional purchasingy Many buying influences

y Multiple sales callsy Derived demandy F luctuating demandy Inelastic demandy Geographically

concentrated buyersy Direct purchasing

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Buying Situation

S traight rebuy

Modified rebuy

New task

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Systems Buying and Selling

Turnkey solutiondesired;

bids solicited

Primecontractors

S econd-tiercontractors

S ystemsubcomponents

assembled

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The Buying Center

Copyright 2009 Pearson Education,

Inc. Publishing as Prentice Hall7-7

Initiators

Users

Influencers

Deciders

Approvers

Buyers

Gatekeepers

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Sales Strategies

S mall S ellers

Large S ellers

Key BuyingInfluencers

Multilevel

In-depthS elling

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Stages in the Buying Process:

Buyphasesy Problem recognitiony General need descriptiony Product specificationy S upplier searchy Proposal solicitationy S upplier selectiony

Order-routine specificationy Performance review

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Forms of Electronic Marketplaces

Catalog sitesV ertical markets

Pure play auction sites Spot markets

Private exchangesBarter markets

Buying alliances

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Methods of e-Procurementy W ebsites organized using vertical hubsy W ebsites organized using functional hubsy

Direct extranet links to major suppliersy Buying alliancesy Company buying sites

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H andling Price-Oriented Customers

Limit quantity purchased

Allow no refunds

Make no adjustments

Provide no services

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Methods for Researching

Customer Valuey Internal engineering

assessmenty F ield value-in-use

assessmenty Focus-group value

assessmenty Direct survey questions

y Conjoint analysisy Benchmarksy Compositional

approachy Importance ratings

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Order Routine SpecificationS tockless

purchase plans

V endor-managedinventory

Continuousreplenishment

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Establishing Corporate Trust

and Credibility

Expertise

Likeability T rustworthiness

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Trust DimensionsT ransparent

Product/ S erviceQuality

Incentive

Partnering

CooperatingDesign

ProductComparison

S upply Chain

Pervasive Advocacy

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Categories of Buyer-Seller

Relationshipsy Basic buying and sellingy Bare bonesy Contractual transactiony Customer supply

y Cooperative systemsy Collaborativey Mutually adaptivey Customer is king

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Aramark Successfully Services Institutional and

Government Markets