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For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Business and Organizational Customers and Their Buying Behavior CHAPTER SIX

Understanding Business & Organizational Customers for Marketing Strategy (Exhibit 6-1)

Federal State and Local Federal State and Local Governments Wholesalers Retailers Wholesalers Retailers Middlemen Manufacturers Farms, mines, etc. Financial Institutions Other providers Manufacturers Farms, mines, etc. Financial Institutions Other providers Producers Manufacturers Farms, mines, etc. Financial Institutions Other providers Manufacturers Farms, mines, etc. Financial Institutions Other providers Producers Federal State and Local Federal State and Local Governments Wholesalers Retailers Wholesalers Retailers Middlemen All Business and Organizational Customers National Local National Local Nonprofits Business and Organizational Customers – A Big Opportunity

Many Different People May Influence a Decision (Exhibit 6-2)

Characteristics Time required Multiple influences Review of suppliers Information needed Much New-Task Buying Type of Process Little None Little Straight Rebuy Much New-Task Buying Medium Some Modified Rebuy Little None Little Straight Rebuy Organizational Buyers Are Problem Solvers (Exhibit 6-3)

Buyer-Seller Relationships in Business Markets BUT Close Relationships May Produce Mutual Benefits Close Relationships May Produce Mutual Benefits - -Reliable source of supply - -Cost reductions - -Price stability or concessions - -Reduced uncertainty - -Joint problem solving - -Improved quality Relationships May Not Make Sense Relationships May Not Make Sense - -Reduced flexibility - -Some purchases are too small or infrequent - -Higher risk from greater purchase concentration

Relationships Have Many Dimensions (Exhibit 6-5)

Collaboration hubs support cooperation Auction sites focus on unique items Reverse auction sites foster competition among sellers Procurement sites operate for benefit of buyers Catalog sites automate search & delivery Online marketplaces connect buyers and sellers Catalog sites automate search & delivery Online marketplaces connect buyers and sellers Buyers rely on search engines E-Commerce Tools in the B2B Market E-Commerce Tools in B2B Market

Construction (23) Construction (23) Others… Manufacturing (31) Manufacturing (31) Manufacturing (31) Manufacturing (31) Apparel (315) Apparel (315) Food (311) Food (311) Others… Apparel (315) Apparel (315) Cut & Sew Apparel (3152) Cut & Sew Apparel (3152) Knitting Mills (3151) Knitting Mills (3151) Apparel Accessories (3159) Apparel Accessories (3159) Others… Cut & Sew Apparel (3152) Cut & Sew Apparel (3152) Men’s and Boy’s (31522) Men’s and Boy’s (31522) Women’s & Girls (31523) Women’s & Girls (31523) Other Cut & Sew (31529) Other Cut & Sew (31529) Others… Men’s and Boy’s (31522) Men’s and Boy’s (31522) Suits & Coats (315222) Suits & Coats (315222) Underwear & Nightwear (315221) Underwear & Nightwear (315221) Shirts (315223) Shirts (315223) Others… An NAICS Code Example (Exhibit 6-7)