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Organizational buyers
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Marketing
Chapter 6
| Question | Answer |
|---|---|
| Business marketing | marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods or services that they can produce and market to others |
| Organizational buyers | manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale |
| 3 Organizational Buyer Markets | 1) Industrial 2) Reseller 3) Government |
| Industrial Firms | 7.7 million; in some way reprocess a product or service they buy before selling it again to the next buyer |
| Resellers | Wholesalers and retailers that buy physical products and resell them again without any reprocessing |
| Government units | Federal, state, and local agencies that buy goods and services for the constituents they serve |
| North American Industry Classification System | NAICS; provides common industry definitions making it easier to measure economic activity to permit studies of market share, demand for goods and services, import competition in domestic markets |
| Derived demand | Demand for industrial products and services is driven by, or derived from, demand for consumer products and services |
| Organizational buying criteria | Objective attributes of the supplier's products and services and the capabilities of the supplier itself |
| Suppliers that meet or surpass buying criteria create ________ ______ | Customer Value |
| ISO 9000 | Standards for registration and certification of a manufacturer's quality management and assurance system based on an on-site audit of practices and procedures |
| Supplier development | 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 |
| Just In Time (JIT) | Inventory system to only inventory needed to be used within hours or days; Caterpillar |
| Buyer-Seller Relationships | Reciprocity Long-term Contracts Supply Partnerships |
| Reciprocity | Industrial buying practice where two organizations agree to purchase each other's products or services; scratching backs |
| Supply Partnership | 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 delivered to ultimate consumers |
| Sustainable procurement | Found in supply partnerships; Aims to integrate environmental considerations into every stage of the buying process with the goal of reducing the negative impact on human health and the physical environment |
| Buying Center | Cross-fucntional group; Individuals who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision |
| Roles in Buying Center | 1) Users 2) Influencers 3) Buyers 4) Deciders 5) Gatekeepers |
| Users | People in the organization who actually use the product; secretary = new word processor |
| Influencers | Affect buying decision; define specifications; Informations System Managers = mainframe computer |
| Buyers | Have formal authority and responsibility to select the supplier and negotiate the terms of the contract |
| Deciders | Have formal or informal power to select or approve the supplier that receives the contract; Usually the buyer or purchasing manager |
| Gatekeepers | Control the flow of information in the buying center |
| Buy Classes | Buying situations; New Buy Straight Rebuy Modified Rebuy |
| New Buy | Organization is a first time buyer; greater potential risk so buying center is enlarged to all stakeholders |
| Straight Rebuy | Buyer/purchasing manager reorders an existing product/service from list of suppliers without even checking with users or influencers; office supplies and maintenance services |
| Modified Rebuy | The users, influencers, or deciders want to change the product specs, price, delivery, or supplier; usually enlarges buying center |
| Organizational Buyer Behavior | Decision process organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers |
| Stages of Buying Decision Process | 1) Problem Recognition 2) Information Search 3) Alternative Evaluation 4) Purchase Decision 5) Postpurchase Behavior |
| Make-Buy decision | Evaluation of whether components and assemblies will be purchased from outside suppliers or built in-house |
| Value analysis | Systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs |
| Bidder's List | List of firms believe to be qualified to supply a given item. |
| Firms selling to organizations must (4) | 1) Understand org's needs 2) Get on right bidder's list 3) Find the right people in buying center 4) Provide value to organizational buyers |
| Large companies prefer _____ _______ | Private exchanges |
| Prominence of Online Buying in Organizational Markets | 1)Org buyers depend on timely supplier info 2) Technology can reduce buyer's order and processing costs 3) Technology can reduce marketing costs |
| E-Marketplaces | Online trading communities that bring together buyer and supplier organizations to make possible the real-time exchange of info, money, products, and services |
| Independent e-marketplaces exist | 1) 1000s of geographically spread buyer/sellers 2) Volatile prices cause demand/supply shifts 3)time sensitivity due to perishables 4) Easily comparable offerings with many sellers |
| Traditional auction | Seller puts item up for sale and would-be buyers are invited to bid in competition with each other |
| Reverse auction | Online auction where buyer communicates a need for a product and would-be suppliers are invited to bid in competition with each other |
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