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ORGANIZA-TIONAL MARKETS AND BUYER BEHAVIOR

C HAPTER. ORGANIZA-TIONAL MARKETS AND BUYER BEHAVIOR. Key is intended use. Industrial Markets (Producers). Reseller Markets (Resellers). Government Markets (Fed, St, City) Not for Profit Associations. THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS. Business Marketing.

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ORGANIZA-TIONAL MARKETS AND BUYER BEHAVIOR

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  1. CHAPTER ORGANIZA-TIONAL MARKETS AND BUYER BEHAVIOR

  2. Key is intended use • Industrial Markets (Producers) • Reseller Markets (Resellers) • Government Markets (Fed, St, City) • Not for Profit Associations THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS • Business Marketing

  3. Organizational Customers in the U.S. Not for Profit Associations 56,000

  4. HOW TO MEASURE ORGANIZATIONAL MARKETS • (NAICS)

  5. 1. Find your competition 2. Measure your market’s size and your share of it 3. Monitor growth in other industries to spot new business opportunities THE BENEFITS OF NAICS CODES http://www.census.gov/epcd/naics02/naico602.htm#N21

  6. Demand is... Description Derived Demand for business products results from demand for consumer products Inelastic A change in price will not significantly affect the demand for product Joint Multiple items are used together in final product. Demand for one item affects all Fluctuating Demand for business products is more volatile than for consumer products DEMAND CHARACTERISTICS OF ORGANIZATIONAL BUYING

  7. Characteristics of Organizational Buying Behavior

  8. Characteristic Business Market Consumer Market Organizational Individual Demand Volume Larger Smaller # of Customers Fewer Many Location Concentrated Dispersed Distribution More Direct More Indirect Nature of Buy More Professional More Personal Buy Influence Multiple Single Negotiations More Complex Simpler Reciprocity Yes No Leasing Greater Lesser Promotion Personal Selling Advertising Business vs Consumer Markets

  9. HOW BUSINESSES CHOOSE A VENDOR

  10. BUYER-SELLER RELATIONSHIPS IN ORGANIZATIONAL BUYING • Reciprocity Ford and Firestone • Supply Partnership – Walmart and P & G

  11. BUYING CENTERS

  12. BUSINESS BUYING SITUATIONS • Buying Situations and the Buying Center 1) Straight Rebuy 2)Modified Rebuy 3) New Buy

  13. How the buying situation affects buying center behavior

  14. ONLINE BUYING IN ORGANIZATIONAL MARKETS • 80% of e-trade dollar value is B2B WHY? • Buyers need timely, detailed information • Buyers need to get that info quickly • E-trade reduces processing costs • E-trade reduces marketing costs • Wider potential customer or supplier base

  15. ONLINE BUYING IN ORGANIZATIONAL MARKETS • Online Auctions in Organizational Markets • Traditional Auction –looking for buyers • Reverse Auction- looking for sellers

  16. How buyer and seller participants and price behavior differ by type of online auction

  17. Concept Check 1. What are the three main types of organizational buyers? A: industrial firms; resellers; government units

  18. Concept Check 2. What is the North American Industry Classification System (NAICS)? A: The NAICSprovides common industry definitions for Canada, Mexico, and the United States, which makes easier the measurement of economic activity in the three member countries of NAFTA.

  19. Concept Check 2. In general, which type of online auction creates upward pressure on bid prices and which type creates downward pressure on bid prices? A: traditional auction; reverse auction

  20. Concept Check 2. What are the three types of buying situations or buy classes? A: straight rebuy; modified rebuy;new buy

  21. Concept Check 1. What are e-marketplaces? A: E-marketplaces are online trading communities that bring together buyers and supplier organizations.

  22. Business Marketing Business marketing- The marketing of goods and services to individuals and organizations for purposes other than personal consumption.

  23. 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).

  24. 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.

  25. Buying Center A buying center is 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.

  26. 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.

  27. 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.

  28. 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.

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