1. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin ORGANIZATIONAL MARKETS AND BUYER BEHAVIOR

2. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Business marketing Organizational buyers THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS

3. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Type and number of US organizational customers

4. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Industrial Markets  Industrial firms Industrial firms Reseller Market  Resellers Resellers Government Markets  Government Units Government Units Global Organizational Markets THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS

5. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin North American Industry Classification SystemNorth American Industry Classification System MEASURING DOMESTIC AND GLOBAL INDUSTRIAL, RESELLER, AND GOVERNMENT MARKETS

6. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin NAICS breakdown for information industries sector: NAICS code 51 (abbreviated)

7. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin CHARACTERISTICS OF ORGANIZATIONAL BUYING

8. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Demand Characteristics  Derived demand Derived demand Size of the Order or Purchase Number of Potential Buyers Organizational Buying Objectives CHARACTERISTICS OF ORGANIZATIONAL BUYING

9. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Organizational Buying Criteria  ISO 9000 ISO 9000  Reverse marketing Reverse marketing CHARACTERISTICS OF ORGANIZATIONAL BUYING

10. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Buyer-Seller Relationships and Supply Partnerships  Reciprocity Reciprocity  Supply partnership Supply partnership CHARACTERISTICS OF ORGANIZATIONAL BUYING

11. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Buying Center: A Cross- Functional GroupBuying Center People in the Buying Center Roles in the Buying Center Buying Situations and the Buying Center  Buy classes Buy classes CHARACTERISTICS OF ORGANIZATIONAL BUYING

12. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin How they buying situation affects buying center behavior

13. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Stages in the Organizational Buying Process  Organizational buying behavior Organizational buying behavior CHARTING THE ORGANZATIONAL BUYING PROCESS

14. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Problem Recognition  Make-buy decision Make-buy decision Information Search  Value analysis Value analysis CHARTING THE ORGANZATIONAL BUYING PROCESS

15. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Comparing the stages in consumer and organizational purchases

16. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Alternative Evaluation  Bidder’s list Bidder’s list Purchase Decision Postpurchase Behavior CHARTING THE ORGANZATIONAL BUYING PROCESS

17. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Prominence of Online Buying in Organizational Markets E-Marketplaces: Virtual Organizational MarketsE-Marketplaces Online Auctions in Organizational Markets ONLINE BUYING IN ORGANIZATIONAL MARKETS

18. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin How buyer and seller participants and price behavior differ by type of online auction

19. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Online Auctions in Organizational Markets  Traditional auction Traditional auction  Reverse auction Reverse auction ONLINE BUYING IN ORGANIZATIONAL MARKETS

20. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

21. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

22. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Industrial firms reprocess a product or service they buy before selling it again to the next buyer. Industrial Firms

23. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Wholesalers and retailers who buy physical products and resell them again without an reprocessing are resellers. Resellers

24. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Government units are the federal, state, and local agencies that buy goods and services for the constituents they serve. Government Units

25. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The North American Industry Classification System (NAICS) provides common industry definitions for Canada, Mexico, and the United States. North American Industry Classification Systems

26. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

27. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Organizational buying criteria are the objective attributes of the supplier’s products and services and the capabilities of the supplier itself. Organizational Buying Criteria

28. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

29. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

30. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Reciprocity is an industrial buying practice in which two organization agree to purchase each other’s products and services. Reciprocity

31. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

32. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A buying center is made up of several people in an organization who participate in the buying process. Buying Center

33. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Buy classes are straight rebuy, modified rebuy, and new buy. Buy Classes

34. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

35. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

36. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Value analysis is the systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs. Value Analysis

37. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A bidder’s list is a list of firms believed to be qualified to supply a given item. Bidder’s List

38. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin E-marketplaces are online trading communities that bring together buyer and seller organizations. E-Marketplaces

39. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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

40. © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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