Organizational Buying & Buyer Behavior Chapter 6
Business Marketing “Marketing of goods or services to commercial enterprises, governments, and other profit and non-profit organizations for use in the creation of goods and services that they then produce and market produce and market to other business customers, as well as individuals and ultimate consumers.”
Organization Buyers Those manufacturers, wholesalers, retailers, or government agencies which are buying the goods. Could be for their own consumption or resale What’s the difference between wholesale/retail and manufacturers?
Organizational Buyers Three types Industrial markets Reseller markets Government markets Industrial markets- Reprocess a product or service before reselling it Reseller- Wholesalers and retailers who resell w/o reprocessing it Government markets- Agencies that buy goods and services for their constituencies
Researching These Markets SIC→NAICS North American Industry Classification System Important researching tool NAICS- Allows businesses to research customer markets to study the size of markets, key customers/competitors in such markets, market share First two digits= Sector of economy Next 2=
Organizational Buying Characteristics Demand Characteristics Size of the Order or Purchase Number of Potential Buyers Organizational Buying Objectives Organizational Buying Criteria Buyer-Seller Relationship and Supply Partnerships The Buying Center
B2B Characteristics Demand characteristics Derived demand Size of the Order or Purchase Much larger Number of Potential Buyers Fewer number of buyers Much larger- so more policies *Specific number of suppliers’ bids *Approval from superiors Fewer # of buyers relative to B2C
B2B Characteristics Organizational Buying Objectives Why do they buy the products? Organizational Buying Criteria What criteria do they use in choosing a vendor? ISO 9000 Reverse marketing Wal-Mart and RFID Obj: To increase profitability (comp systems t track inventory and prevent stock outs) Knowing why they buy is an important step in marketing to them OBC- The attributes of goods and services and capabilities of the suppliers Price 2.Ability to meet quality specifications 3.Ability to meet required delivery schedules 4.Technical capabilities 5.Warranties and claim policies 6.Past performance with contracts 7.Production and facilities ISO 9000- Registration and certification regarding the quality of a manufacturer’s products. Based upon on-site audits
Buyer-Seller Relationship and Supply Partnerships B2B- Lengthy negotiations and contracts Reciprocity Supply partnerships P&G & Wal-Mart
The Buying Center Can be a person or committee Roles Buying Classes Users Influencers Buyers Deciders Gatekeepers Buying Classes Straight rebuy Modified rebuy New buy
B2B Buying Process Problem Recognition Information Search Make-buy decisions Information Search Value analysis Alternative Evaluation Bidder’s list Purchase Decision Post-purchase Behaviors VA- A systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs
B2B Online 80% of all total dollar value of all online transactions E-Marketplaces Online auctions Traditional auctions Reverse auctions