© 2002 mcgraw-hill companies, inc., mcgraw-hill/irwin organizational markets and buyer behavior

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

ORGANIZATIONAL MARKETS AND

BUYER BEHAVIOR

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• Business marketing

• Organizational buyers

THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS

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Type and number of US organizational customers

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• Industrial Markets Industrial firms

• Reseller Market Resellers

• Government Markets Government Units

• Global Organizational Markets

THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS

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• North American Industry Classification System

MEASURING DOMESTIC AND GLOBAL INDUSTRIAL, RESELLER,

AND GOVERNMENT MARKETS

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NAICS breakdown for information industries sector: NAICS code 51 (abbreviated)

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CHARACTERISTICS OF ORGANIZATIONAL BUYING

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• Demand Characteristics Derived demand

• Size of the Order or Purchase

• Number of Potential Buyers

• Organizational Buying Objectives

CHARACTERISTICS OF ORGANIZATIONAL BUYING

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• Organizational Buying Criteria ISO 9000 Reverse marketing

CHARACTERISTICS OF ORGANIZATIONAL BUYING

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• Buyer-Seller Relationships and Supply Partnerships

Reciprocity Supply partnership

CHARACTERISTICS OF ORGANIZATIONAL BUYING

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• The Buying Center: A Cross-Functional Group• People in the Buying Center

• Roles in the Buying Center

• Buying Situations and the Buying Center Buy classes

CHARACTERISTICS OF ORGANIZATIONAL BUYING

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How they buying situation affects buying center behavior

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• Stages in the Organizational Buying Process

Organizational buying behavior

CHARTING THE ORGANZATIONAL BUYING PROCESS

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• Problem Recognition Make-buy decision

• Information Search Value analysis

CHARTING THE ORGANZATIONAL BUYING PROCESS

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Comparing the stages in consumer and organizational purchases

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• Alternative Evaluation Bidder’s list

• Purchase Decision

• Postpurchase Behavior

CHARTING THE ORGANZATIONAL BUYING PROCESS

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• Prominence of Online Buying in Organizational Markets

• E-Marketplaces: Virtual Organizational Markets

• Online Auctions in Organizational Markets

ONLINE BUYING IN ORGANIZATIONAL MARKETS

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How buyer and seller participants and price behavior differ by type of online auction

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• Online Auctions in Organizational Markets

Traditional auction Reverse auction

ONLINE BUYING IN ORGANIZATIONAL MARKETS

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Business marketing is the marketing of goods and services to commercial enterprises, governments, and other profit and not-for-profit organizations for use in the creations of goods and services that they then produce and market to other business consumers, as well as individuals and ultimate consumers.

Business marketing is the marketing of goods and services to commercial enterprises, governments, and other profit and not-for-profit organizations for use in the creations of goods and services that they then produce and market to other business consumers, as well as individuals and ultimate consumers.

Business Marketing

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Organizational buyers are those manufacturers, wholesalers and retailers, and government agencies that buy goods and services for their own use or for resale.

Organizational buyers are those manufacturers, wholesalers and retailers, and government agencies that buy goods and services for their own use or for resale.

Organizational Buyers

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Industrial firms reprocess a product or service they buy before selling it again to the next buyer.

Industrial firms reprocess a product or service they buy before selling it again to the next buyer.

Industrial Firms

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Wholesalers and retailers who buy physical products and resell them again without an reprocessing are resellers.

Wholesalers and retailers who buy physical products and resell them again without an reprocessing are resellers.

Resellers

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Government units are the federal, state, and local agencies that buy goods and services for the constituents they serve.

Government units are the federal, state, and local agencies that buy goods and services for the constituents they serve.

Government Units

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The North American Industry Classification System (NAICS) provides common industry definitions for Canada, Mexico, and the United States.

The North American Industry Classification System (NAICS) provides common industry definitions for Canada, Mexico, and the United States.

North American Industry Classification Systems

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Derived demand means that the demand for industrial products and services is driven by, or derived from, demand for consumer products and services.

Derived demand means that the demand for industrial products and services is driven by, or derived from, demand for consumer products and services.

Derived Demand

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Organizational buying criteria are the objective attributes of the supplier’s products and services and the capabilities of the supplier itself.

Organizational buying criteria are the objective attributes of the supplier’s products and services and the capabilities of the supplier itself.

Organizational Buying Criteria

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ISO 9000 standards are standards for registration and certification of a manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures.

ISO 9000 standards are standards for registration and certification of a manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures.

ISO 9000

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Reverse marketing involves the deliberate effort by organizational buyers to build relationships that shape suppliers’ products services, and capabilities to fit a buyer’s needs and those of its customers.

Reverse marketing involves the deliberate effort by organizational buyers to build relationships that shape suppliers’ products services, and capabilities to fit a buyer’s needs and those of its customers.

Reverse Marketing

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Reciprocity is an industrial buying practice in which two organization agree to purchase each other’s products and services.

Reciprocity is an industrial buying practice in which two organization agree to purchase each other’s products and services.

Reciprocity

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A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost and/or increasing the value of products and services delivered to the ultimate consumer.

A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost and/or increasing the value of products and services delivered to the ultimate consumer.

Supply Partnership

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A buying center is made up of several people in an organization who participate in the buying process.

A buying center is made up of several people in an organization who participate in the buying process.

Buying Center

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Buy classes are straight rebuy, modified rebuy, and new buy.

Buy classes are straight rebuy, modified rebuy, and new buy.

Buy Classes

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Organizational buying behavior is the decision-making process that organizations use to establish the need for products and services and identify, evaluate, and chose among alternative brands and suppliers.

Organizational buying behavior is the decision-making process that organizations use to establish the need for products and services and identify, evaluate, and chose among alternative brands and suppliers.

Organizational Buying Behavior

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A make-buy decision is an evaluation of whether components and assemblies will be purchased form outside suppliers or built by the company itself.

A make-buy decision is an evaluation of whether components and assemblies will be purchased form outside suppliers or built by the company itself.

Make-Buy Decision

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Value analysis is the systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs.

Value analysis is the systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs.

Value Analysis

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A bidder’s list is a list of firms believed to be qualified to supply a given item.

A bidder’s list is a list of firms believed to be qualified to supply a given item.

Bidder’s List

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E-marketplaces are online trading communities that bring together buyer and seller organizations.

E-marketplaces are online trading communities that bring together buyer and seller organizations.

E-Marketplaces

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In a traditional auction a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other.

In a traditional auction a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other.

Traditional Auction

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In a reverse auction, a buyer communicates a need for a product of service and would-be suppliers are invited to bid in competition with each other.

In a reverse auction, a buyer communicates a need for a product of service and would-be suppliers are invited to bid in competition with each other.

Reverse Auction