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Chapter 5: Understanding organizations as customers. When you finish this chapter, you should: 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.
McGrawHill/Irwin Copyright © 2013 by The McGrawHill Companies, Inc. All rights reserved LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 5, YOU SHOULD BE ABLE TO: LO1 LO2 Distinguish among industrial, reseller, and government organizational markets Describe the key characteristics of organizational buying that make it different from consumer buying 52 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 5, YOU SHOULD BE ABLE TO: LO3 LO4 Explain how buying centers and buying situations influence organizational purchasing Recognize the importance and nature of online buying in organizational markets 53 BUYING PUBLICATION PAPER IS A SERIOUS MARKETING RESPONSIBILITY AT JCPENNEY 54 LO1 THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS Business Marketing Organizational Buyers • Industrial Markets (Industrial Firms) • Reseller Markets • Government Markets (Resellers) (Government Units) Wholesalers Retailers Mars Curiosity 55 FIGURE 5-A Type and number of organization establishments in the U.S.: 2007 56 LO1 MEASURING DOMESTIC AND GLOBAL INDUSTRIAL, RESELLER, AND GOVERNMENT MARKETS North American Industry Classification System (NAICS) North American Free Trade Agreement (NAFTA) 57 FIGURE 5-1 NAICS breakdown for the information industries sector: NAICS code 51 (abbreviated) 58 FIGURE 5-2 Key characteristics and dimensions of organizational buying behavior 59 LO2 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 510 LO2 CHARACTERISTICS OF ORGANIZATIONAL BUYING Organizational Buying Criteria Supplier Development 511 MARKETING MATTERS LO2 Harley-Davidson’s Supplier Collaboration Creates Customer Value…and a Great Ride 512 FIGURE 5-3 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 513 LO2 CHARACTERISTICS OF ORGANIZATIONAL BUYING Buyer-Seller Relationships and Supply Partnerships • Reciprocity • Supply Partnership • Sustainable Procurement 514 LO2 MAKING RESPONSIBLE DECISIONS Sustainable Procurement for Sustainable Growth Starbucks 515 LO3 CHARTING THE ORGANIZATIONAL BUYING PROCESS STAGES IN THE ORGANIZATIONAL BUYING PROCESS Organizational Buying Behavior • Problem Recognition • Information Search • Alternative Evaluation • Purchase Decision • Postpurchase Behavior 516 FIGURE 5-4 Comparing the stages in a consumer and organizational purchase decision process 517 CHARACTERISTICS OF ORGANIZATIONAL BUYING LO3 THE BUYING CENTER Buying Center Buying Committee People in the Buying Center Roles in the Buying Center • Users • Deciders • Influencers • Gatekeepers • Buyers 518 LO3 CHARACTERISTICS OF ORGANIZATIONAL BUYING THE BUYING CENTER Buy Classes • New Rebuy • Straight Rebuy • Modified Rebuy 519 FIGURE 5-5 The buying situation affects buying center behavior in different ways 520 LO4 ONLINE BUYING IN ORGANIZATIONAL MARKETS Prominence of Online Buying in Organizational Markets E-marketplaces Online Auctions in Organizational Markets Agentrics Video • Traditional Auction • Reverse Auction 521 LO4 MARKETING MATTERS eBay Means Business for Entrepreneurs 522 FIGURE 5-6 How buyer and seller participants and price behavior differ by type of online auction 523 ... (NAFTA) 5 7 FIGURE 5- 1 NAICS breakdown for the information industries sector: NAICS code 51 (abbreviated) 5 8 FIGURE 5- 2 Key characteristics and dimensions of organizational buying behavior 5 9 LO2... (Government Units) Wholesalers Retailers Mars Curiosity 5 5 FIGURE 5- A Type and number of organization establishments in the U.S.: 2007 5 6 LO1 MEASURING DOMESTIC AND GLOBAL INDUSTRIAL, RESELLER,... Postpurchase Behavior 5 16 FIGURE 5- 4 Comparing the stages in a consumer and organizational purchase decision process 5 17 CHARACTERISTICS OF ORGANIZATIONAL BUYING LO3 THE BUYING CENTER Buying