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  2. THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS • Business Marketing • Organizational Buyers • Industrial Markets (Industrial Firms) • Reseller Markets (Resellers) • Government Markets (Government Units) • Global Organizational Markets Slide 6-6

  3. FIGURE 6-1Type and number of organizational customers in the U.S. Slide 6-7

  4. Moscow Yellow PagesWhat type of market? Slide 6-8

  5. MEASURING DOMESTIC AND GLOBAL INDUSTRIAL, RESELLER, AND GOVERNMENT MARKETS • North AmericanIndustry ClassificationSystem (NAICS) • North American Product Classification System (NAPCS) Slide 6-9

  6. FIGURE 6-2NAICS breakdown for information industries sector:NAICS code 51 (abbreviated) Slide 6-10

  7. CHARACTERISTICS OF ORGANIZATIONAL BUYING • Demand Characteristics • Derived Demand • Size of the Order or Purchase • Number of Potential Buyers • Organizational Buying Objectives Slide 6-13

  8. FIGURE 6-3Key characteristics of organizational buying behavior Slide 6-14

  9. CHARACTERISTICS OF ORGANIZATIONAL BUYING • Organizational Buying Criteria • ISO 9000 • Reverse Marketing Slide 6-16

  10. FIGURE 6-AKey organizational buying criteria Slide 6-17

  11. MARKETING NEWSNET Harley-Davidson’s Supplier Collaboration Creates Customer Value…and a Great Ride Slide 6-18

  12. CHARACTERISTICS OF ORGANIZATIONAL BUYING • Buyer-Seller Relationships andSupply Partnerships • Reciprocity • Supply Partnership Slide 6-19

  13. ETHICS AND SOCIAL RESPONSIBILITY ALERT Scratching Each Other’s Back—The Ethics of Reciprocity in Organizational Buying Slide 6-20

  14. CHARACTERISTICS OF ORGANIZATIONAL BUYING • The Buying Center: A Cross-Functional Group • Buying Center • Buying Committee • People in the Buying Center Slide 6-21

  15. CHARACTERISTICS OF ORGANIZATIONAL BUYING • The Buying Center: A Cross-Functional Group • Roles in the Buying Center • Users • Deciders • Influencers • Gatekeepers • Buyers Slide 6-22

  16. Buying Center Who is in the buying center andwhat roles do they play? Slide 6-23

  17. FIGURE 6-B Five roles in the buying center Slide 6-24

  18. CHARACTERISTICS OF ORGANIZATIONAL BUYING • The Buying Center: A Cross-Functional Group • Buying Situations (Buy Classes) and the Buying Center • Straight Rebuy • Modified Rebuy • New Buy Slide 6-25

  19. FIGURE 6-4How the buying situation affects buying center behavior Slide 6-26

  20. CHARTING THE ORGANIZATIONAL BUYING PROCESS • Organizational Buying Behavior • Stages in the Organizational Buying Process Slide 6-29

  21. FIGURE 6-5Comparing the stages in consumer and organizational purchases Slide 6-30

  22. CHARTING THE ORGANIZATIONAL BUYING PROCESS • Buying a Machine Vision System • Problem Recognition • Make-Buy Decision • Information Search • Value Analysis • Alternative Evaluation • Bidder’s List Slide 6-31

  23. CHARTING THE ORGANIZATIONAL BUYING PROCESS • Buying a Machine Vision System • Purchase Decision • Postpurchase Behavior Slide 6-32

  24. ONLINE BUYING IN ORGANIZATIONAL MARKETS • Prominence of Online Buying in Organizational Markets • E-marketplaces: Virtual Organizational Markets Slide 6-36

  25. WEB LINK eBay Means Business Too Slide 6-37

  26. ONLINE BUYING IN ORGANIZATIONAL MARKETS • Online Auctions in Organizational Markets • Traditional Auction • Reverse Auction Slide 6-38

  27. FIGURE 6-6How buyer and seller participants and price behavior differ by type of online auction Slide 6-39

  28. Business Marketing Business marketing is the marketingof goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others. Slide 6-57

  29. Organizational Buyers Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale. Slide 6-58

  30. Industrial Firms Industrial firms are organizational buyers that in some way reprocesses a product or service they buy before selling it again to the next buyer. Slide 6-59

  31. Resellers Resellers are wholesalers and retailers that buy physical products and resell them again without any processing. Slide 6-60

  32. Government Units Government units are the federal, state, and local agencies that buy goods and services for the constituents they serve. Slide 6-61

  33. North American Industry Classification System (NAICS) The NAICS provides common industry definitions for Canada, Mexico, and the United States, which makes easier the measurement of economic activity in the three member countries of the North American Free Trade Agreement (NAFTA). Slide 6-62

  34. Derived Demand Derived demand means the demandfor industrial products and services is driven by, or derived from, demand for consumer products and services. Slide 6-63

  35. Organizational Buying Criteria Organizational buying criteria arethe objective attributes of the supplier’s products and services and the capabilities of the supplier itself. Slide 6-64

  36. ISO 9000 ISO 9000 consists of standards for registration and certification of a manufacturer’s quality managementand assurance system based on anon-site audit of practices and procedures developed by the International Standards Organization (ISO). Slide 6-65

  37. Reverse Marketing Reverse marketing involves 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. Slide 6-66

  38. Reciprocity Reciprocity is an industrial buying practice in which two organizationsagree to purchase each other’s products and services. Slide 6-67

  39. Supply Partnership A 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. Slide 6-68

  40. Buying Center A buying center is the group of peoplein an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision. Slide 6-69

  41. Buy Classes Buy classes consist of three typesof buying situations: straight rebuy; modified rebuy; and new buy. Slide 6-70

  42. Organizational Buying Behavior Organizational buying behavior isthe decision-making process that organizations use to establish the needfor products and services and identify, evaluate, and choose among alternative brands and suppliers. Slide 6-71

  43. Make-Buy Decision A make-buy decision is an evaluation of whether components and assemblies will be purchased from outside suppliers or built by the company itself. Slide 6-72

  44. Value Analysis Value analysis is a systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs. Slide 6-73

  45. Bidder’s List A bidder’s list is a list of firms believed to be qualified to supply a given item. Slide 6-74

  46. E-Marketplaces E-marketplaces are online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services. Slide 6-75

  47. Traditional Auction A traditional auction is an online auction in which a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other. Slide 6-76

  48. Reverse Auction A reverse auction is an online auction in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other. Slide 6-77