Chapter 6 Flashcards
business-to-business marketing
the marketing of products and services to companies, governments, or not-for-profit organizations for use in the creation of products and services that they can produce and market to others
Organizational buyers
manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale
Organizational markets
- Industrial
- Reseller
- Government
Industrial Markets
reprocess a product or service they buy before selling it again to the next buyer
-buying parts you are going to use in your product & then selling the product
Ex: Apple
Reseller Markets
wholesalers and retailers that buy physical products and resell them again without any reprocessing
-not doing anything to the product, just selling it
Ex: Best Buy selling computers
Government Markets
Federal, state, county, or local governments that buy goods and services to support their internal operations and provide products to their constituencies
Ex: NASA/military equipment
North American Industry Classification System (NAICS)
provides common industry definitions for Canada, Mexico, and the United States
-based on the major activity, good, or service provided
Key Features of Organizational Buying
1) Derived demand
2) size of the order/purchase
3) number of potential buyers
4) organizational buying objectives
5 organizational buying criteria
6) buyer -seller relationships & supply partnerships
derived demand
Business demand that ultimately comes from (derives from) the demand for consumer goods
Size of the Order or Purchase
the size of the purchase involved in organizational buying is typically much larger than that in consumer buying
Number of Potential Buyers
Firms marketing to organizations are often restricted to far fewer buyers
Organizational Buying Objectives
increase profits, increase efficiency, preserve the environment, buy from women/minority suppliers/vendors
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
Buyer-Seller Relationships and Supply Partnerships
involves complex negotiations concerning delivery schedules, price, technical specifications, warranties, and claim policies
Reciprocity
industrial buying practice in which two organizations agree to purchase each other’s products and services
Ex: Gt advanced tech has a contract w/ Apple to supply material used in iPhone camera lenses
Supply partnerships
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
Ex: Walmart has one with P&G for ordering/replenishing P&Gs products in its stores
Organizational Buying Behavior
the decision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers
The Buying Function in Orgs
Primarily responsible for facilitating the selection & purchase of products/services for the orgs own use or for resale to consumers
5 Stages in the Organizational Buying Process
- problem recognition
- information search
- alternative evaluation
- purchase decision
- post purchase behavior
Organizational Buying Process vs Consumer Purchase Process
Organizational Buying Process has same stages but…
-More people are involved, supplier capability becomes more important, post purchase evaluation behavior is more formal
The Buying Center
the group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision
buying committee
a highly formalized buying center for large multi-store chains
5 Roles in the Buying Center
- Users
- Influencers
- Buyers
- Deciders
- Gatekeepers
