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- Marketing to firms, governments, or not-for-profit organizations.
- Used in the creation of goods and services that they can produce and market to others
- Manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.
- Three different markets
- * Industrial
- * Reseller
- * Government
- These firms reprocess a product or service they buy before selling it again to the next buyer
- Ex: Corning Inc., transforms different blends of materials to create optical fibers that are used by companies for telephone traffic
- Wholesalers and retailers that buy physical products and resell them again without any reprocessing.
- In the United States there are almost 3 million retailers and 860,000 wholesalers
- Federal, state, and local agencies that buy goods and services for the constituents they serve.
- About 88,000 government units in the U.S.
- * Ex: NASA (paying to have spacecrafts built)
North American Industry
- Classification System (NAICS)
- Provides common industry definitions for Canada, Mexico, and the United States
- helps to gauge the size of these markets in the United States and around the World
- groups economic activity to permit studies of market share, demand for goods and services, import competition in domestic markets, and similar studies
Characteristics of Organizational Buying (pages 124-127)
- Demand Characteristics
- Size of Order or Purchase
- Number of Potential Buyers
- Organizational Buying Objectives
- Organizational Buying Criteria
- Buyer-Seller Relationship & Supply Partnership
- Demand for industrial products and services driven by demand for consumer products and services
- Ex: Weyerhaeuser (Paper Company) products are based on the consumers demand for newspapers and other products that require paper needs such as pizza boxes and packages
Organizational Buying Behavior
- Process by which organizations determine the need for goods and then choose among alternative suppliers
- Stages in the buying decision process (figure 6-3)
- Group of people in an organization who participate in the buying process
- For most large multi store chain resellers, such as Sears, 7-Eleven, and Target the buying center is highly formalized and is called a buying committee
- Three types of organizational buying situations
- New buy, straight rebuy, or modified rebuy
- Straight Rebuy: Buyer or purchasing manager reorders an existing product or service from the list of acceptable suppliers, probably without checking with users or other influencers
Buy Classes cont…
- • Modified Rebuy: Users, influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier.
- • New Buy: Organization is a first-time buyer of the product or service Involves greater risks in the purchase, so the buying center is enlarged to include all those who have a stake in the new buy
- Online trading communities that bring together buyers and supplier organizations
- These online communities go by a variety of names, including business-to-business exchanges and e-hubs, and make possible the real-time exchange of information, money, products, and services
- Occurs when a seller puts an item up for sale and would-be buyers bid in competition with each other
- As more would-be buyers become involved, there is an upward pressure on bid prices.
- Occurs when a buyer communicates a need for something and would-be suppliers bid in competition with each other
- As more would-be suppliers become involved, there is a downward pressure on bid prices for the buyer’s business.