The Characteristics of Organization Buying Behaviour Part two

Organizational Buying When a marketing firm develops a marketing mix that it can use to approach business customers, it should understand the decision making process in organizations Organizational buying may be defined as the decision making process by which firms establish what products they need to purchase and identify, evaluate, and select a brand and a supplier for those products Business markets are different than consumer markets and components that matter include: Number of Buyers Location of Buyers Demand Characteristics Buying Criteria The Formal Buying Process and Centralized Purchasing Characteristics and Relationships

Buying Criteria Compared to consumers, businesses and industries purchases are rational and practical While consumers may buy stuff for emotional reasons, industries buy based on quality, price, and service Central to the buying process in organizations is a vendor analysis A vendor analysis rates potential suppliers on: Price Quality Service and Services Offered Continuity of Supply

Formal Buying Process While in some businesses one person has the authority to sign off on purchase orders, most use many individuals to make purchases First businesses often use buying committees which brings individuals together to share the responsibility of making a purchase decision Production and Engineering Financing Marketing Second businesses hold meetings with multiple informed people who makes decisions. This group is known as a buying center Users Influencers Buyers Deciders

Centralized Purchasing Today, buying organizations are looking for the best possible prices in order to compete with each other Many firms, therefore, have begun to create centralized purchasing systems in order to secure better discounts based on volume purchases Example: Hudson’s Bay Company The Bay, Zellers, and the Bay are all owned by HBC The companies buy huge quantities from single vendors in order to lower prices for them Automatic computering has now made purchases automatic When customers buy something the computer recognizes this and if inventory is too low new supplies are automatically ordered

Characteristics and Relationships While businesses do not have personalities, the people inside them do Marketers therefore get to not the attitudes a company gives off and tries to align there message with the purchaser Other strategies include getting to know the people in the businesses and selling to them Currently, B2B selling is changing as most current owners (baby boomers) are being replace by a new generation who view life differently Most importantly, businesses try to focus on creating relationships and keeping current customers