Marketing 5: Organizational buying

business marketing
the marketing of products and services to firms, governments, or NFP organizations
organizational buyers
manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or resale
3 markets in organizational buying
1. industrial
2. reseller
3. government
industrial firms
those firms who reprocess a product or service they buy before selling it again to the next buyer
wholesalers and retailers that buy physical products and resell them again without any reprocessing
government units
the federal, state, and local agencies that buy products and services for the constituents they serve
north american industry classification system – provides common industry definitions for Canada, Mexico, and US
derived demand
the demand for industrial products and services is driven by demand for consumer products and services
organizational buying criteria
the objective attributes of the supplier’s products and services and the capabilities of the supplier itself
supplier development
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
industrial buying practice in which two organizations agree to purchase each others product’s and services
supply partnership
exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer
sustainable procurement
“green” organizational buying
organizational buying behavior
the process by which organizations determine the need for products and then choose among alternative suppliers
5 stages of (organizational) buying
1. problem recognition
2. information search
3. alternative evaluation
4. purchase decision
5. postpurchase behavior
buying center
the group of people in an organization that participates in the buying process
buying committee
highly formalized buying center
5 roles in the buying center
1. users
2. influencers
3. buyers
4. deciders
5. gatekeepers
buy classes
1. new buy
2. straight rebuy
3. modified rebuy
new buy
an organization is the first time buyer of the product or service
straight rebuy
office supplies/maintenance are examples
modified rebuy
the buying organization wants to change product specifications, price, delivery schedule, or supplier
online trading communities that bring together buyers and supplier organizations
traditional auction
occurs when a seller puts an item up for sale and would-be buyers bid in competition with each other
reverse auction
occurs when a buyer communicates a need for something and would-be suppliers bid in competition with each other

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