Organizational Markets and Buyer Behavior - PowerPoint PPT Presentation

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Organizational Markets and Buyer Behavior

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  1. Organizational Markets and Buyer Behavior • Compare/contrast final and organizational consumers and the buying processes used by each. • Distinguish between organizational products/services and final consumer products/services. • Explain how demand for organizational goods/services differs from demand for final consumer goods/services.

  2. Organizations vs. Final Consumers • Fewer Buyers • Bigger Purchases • Reciprocity/Interconnectivity • Professional Purchasers/ Buying Centers • Derived Demand

  3. Fewer Buyers/ Bigger Purchases • More power to the buyer • Initial Purchase becomes more important--Big Repeat purchases • Longer Decision Process • Complex Decision Process

  4. Reciprocity/ Interconnectivity • Potential for reciprocal purchases • Your product is likely to be connected to the performance of other products • If your product doesn’t perform it may have very serious repercussions • The costs of non-performance escalate substantially • The augmented product is important • After sale service • Response

  5. Professional Buyers/Buying Centers • Assume significant expertise from your customer • Difficult to determine how decisions for purchase are made • Initiators/Users • Influencers • Deciders/Approvers • Buyers • Difficult to determine what level has authority to make the decision

  6. Derived Demand • Ultimately demand depends on consumers • Most monitor consumers/endusers as well as immediate customer • Must monitor environmental factors which affect the consumer market • Best information on end-users will come from your customers Cooperative exchange is required for your firm to obtain this information from your customers.

  7. The Bottom Line Reciprocity/ Interconnectivity • Cooperation • Commitment/Investment • Trust Fewer Buyers/ Bigger Purchases Professional Buying Centers ???? • Trust • Cooperation • Commitment/Investment • Trust • Cooperation Derived Demand • Cooperation

  8. What is the link between transaction costs and relationship marketing? Does relationship marketing make sense in both industrial and consumer contexts? Are there times when relationship marketing do not make sense in an industrial context? Before adopting a relationship marketing philosophy as an organization what questions should an organizations ask about itself and its customers? Discussion Questions