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Chapter 6 - Understanding organizations as customers. After reading chapter 6, you should be able to: Distinguish among industrial, reseller, and government organizational markets; describe the key characteristics of organizational buying that make it different from consumer buying; explain how buying centers and buying situations influence organizational purchasing; recognize the importance and nature of online buying in organizational markets.
Copyright © 2015 McGrawHill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill Education LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: LO 6-1 LO 6-2 Distinguish among industrial, reseller, and government organizational markets Describe the key characteristics of organizational buying that make it different from consumer buying 62 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: LO 6-3 LO 6-4 Explain how buying centers and buying situations influence organizational purchasing Recognize the importance and nature of online buying in industrial, reseller, and government organizational markets 63 BUYING IS MARKETING TOO! PURCHASING PUBLICATION PAPER FOR JCPENNEY 64 LO 6-1 THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS Business Marketing Organizational Buyers • Industrial Markets (Industrial Firms) • Reseller Markets • Government Markets (Resellers) (Government Agencies) Wholesalers Retailers • Global Organizational Markets 65 FIGURE 6-A Type and number of organization establishments in the U.S.: 2007 66 LO 6-1 MEASURING DOMESTIC AND GLOBAL INDUSTRIAL, RESELLER, AND GOVERNMENT MARKETS North American Industry Classification System (NAICS) North American Free Trade Agreement (NAFTA) 67 FIGURE 6-1 NAICS breakdown for the information industries sector: NAICS code 51 68 FIGURE 6-2 Key characteristics and dimensions of organizational buying behavior 69 LO 6-2 CHARACTERISTICS OF ORGANIZATIONAL BUYING Derived Demand Size of Order or Purchase Number of Potential Buyers Organizational Buying Objectives • Profits • Efficiency • Women/Minority Suppliers/Vendors • Environment/ Sustainability 610 LO 6-2 CHARACTERISTICS OF ORGANIZATIONAL BUYING BUYER-SELLER RELATIONSHIPS & SUPPLY PARTNERSHIPS Reciprocity Supply Partnership Sustainable Procurement 614 LO 6-2 MARKETING MATTERS Milsco Mfg.—Delivering a Great Ride for Customers’ Seats 615 LO 6-2 MAKING RESPONSIBLE DECISIONS Sustainable Procurement for Sustainable Growth Starbucks 616 LO 6-3 CHARACTERISTICS OF ORGANIZATIONAL BUYING THE BUYING CENTER Buying Center Buying Committee People in the Buying Center Roles in the Buying Center • Users • Deciders • Influencers • Gatekeepers • Buyers 617 LO 6-3 CHARACTERISTICS OF ORGANIZATIONAL BUYING THE BUYING CENTER Buy Classes • New Rebuy • Straight Rebuy • Modified Rebuy 618 FIGURE 6-3 The buying situation affects buying center behavior in different ways 619 LO 6-3 CHARACTERISTICS OF ORGANIZATIONAL BUYING STAGES IN THE ORGANIZATIONAL BUYING PROCESS Organizational Buying Behavior • Problem Recognition • Information Search • Alternative Evaluation • Purchase Decision • Postpurchase Behavior 620 FIGURE 6-4 Comparing the stages in a consumer and organizational purchase decision process 621 LO 6-3 CHARACTERISTICS OF ORGANIZATIONAL BUYING BUYING A MACHINE VISION SYSTEM Problem Recognition • Make-Buy Decision Information Search • Value Analysis 622 LO 6-3 CHARACTERISTICS OF ORGANIZATIONAL BUYING BUYING A MACHINE VISION SYSTEM Alternative Evaluation • Bidder’s List Purchase Decision Postpurchase Behavior 623 FIGURE 6-5 Product and supplier selection criteria for buying machine vision equipment emphasize factors other than price An optic component in a larger machine vision system for soft drink cans Percentage of machine vision buyers citing individual selection criteria 624 LO 6-4 ONLINE BUYING IN ORGANIZATIONAL MARKETS Prominence of Online Buying in Organizational Markets E-marketplaces Online Auctions in Organizational Markets • Traditional Auction • Reverse Auction 625 LO 6-4 MARKETING MATTERS eBay Means Business for Entrepreneurs 626 FIGURE 6-6 How buyer and seller participants and price behavior differ by type of online auction 627 VIDEO CASE TREK: BUILDING BETTER BIKES THROUGH ORGANIZATIONAL BUYING 628 ... Reverse Auction 6 25 LO 6- 4 MARKETING MATTERS eBay Means Business for Entrepreneurs 6 26 FIGURE 6- 6 How buyer and seller participants and price behavior differ by type of online auction 6 27 VIDEO... Procurement 6 14 LO 6- 2 MARKETING MATTERS Milsco Mfg.—Delivering a Great Ride for Customers’ Seats 6 15 LO 6- 2 MAKING RESPONSIBLE DECISIONS Sustainable Procurement for Sustainable Growth Starbucks 6 16. .. (NAFTA) 6 7 FIGURE 6- 1 NAICS breakdown for the information industries sector: NAICS code 51 6 8 FIGURE 6- 2 Key characteristics and dimensions of organizational buying behavior 6 9 LO 6- 2 CHARACTERISTICS