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The Organisation as a Customer 1-2 LEARNING OBJECTIVES (LO) After reading Chapter 6, you should be able to : LO1 LO3 LO2 LO4 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 industrial, reseller, and government organizational markets.

The Cement Business Business-to-Business (B2B) Marketing by PT Semen Gresik Opening Story –Strategic Procurement in Fujitsu 1-3

Nature & Size of Organisational Markets B2B Marketing Various types of Organisational Markets 1-4 LO1  Business Marketing Business Marketing  Organizational Buyers Organizational Buyers Industrial Markets (Industrial Firms) Reseller Markets (Resellers) Government Markets (Government Units) Global Organizational Markets  Retailers  Wholesalers

Various types of Organisational Markets 1-5 LO1 FIGURE 6-1 FIGURE 6-1 Types of Organizational Customers

Measuring Domestic & Global Markets Industrial, Reseller & Government Markets Various types of Organisational Markets 1-6 LO1  Industrial Classification System Industrial Classification System International Standards Industrial Classification (ISIC) Used by national statistic bodies, research institution, and market research firms

Various types of Organisational Markets 1-7 LO1 FIGURE 6-2 FIGURE 6-2 The International Standard Industrial Classification system of the United Nations (Rev 4)

Various types of Organisational Markets 1-8 LO1 FIGURE 6-3 FIGURE 6-3 Breakdown of Textile industries in the ISIC system of the United Nations

Characteristics of Organisational Buying B2B Consumer Behaviour Unique Characteristics of B2B Marketing 1-9 LO2  Derived Demand Derived Demand  Size of Order or Purchase Size of Order or Purchase  Number of Potential Buyers Number of Potential Buyers  Organizational Buying Objectives Organizational Buying Objectives  Dependent on demand from consumers Dependent on demand from consumers  Generally in great numbers/bulk Generally in great numbers/bulk  Dependent on industry Dependent on industry  Not simply price / value / brand Not simply price / value / brand

1-10 Unique Characteristics of B2B Marketing LO2 FIGURE 6-4 FIGURE 6-4 Key characteristics and dimensions of organizational buying behaviour

Characteristics of Organisational Buying B2B Consumer Behaviour Unique Characteristics of B2B Marketing 1-11 LO2 Just-in-Time  Organizational Buying Criteria Organizational Buying Criteria  ISO 9000 ISO 9000  Supplier Development Supplier Development

1-12 Price isn’t Everything Other criteria matter as well

Characteristics of Organisational Buying B2B Consumer Behaviour Unique Characteristics of B2B Marketing 1-13 LO2  Buyer-Seller Relationships and Supply Partnerships Buyer-Seller Relationships and Supply Partnerships Reciprocity Supply Partnership

The Buying Centre A Cross-Functional Group Buying Centres, Situations and Organisational Purchasing 1-14 LO3  Buying Center Buying Center  Buying Committee Buying Committee  People in the Buying Center People in the Buying Center  Roles in the Buying Center Roles in the Buying Center Users Influencers Buyers Deciders Gatekeepers

The Buying Centre A Cross-Functional Group Buying Centres, Situations and Organisational Purchasing 1-15 LO3  Buy Classes Buy Classes Straight Rebuy Modified Rebuy New Rebuy

Buying Centres, Situations and Organisational Purchasing 1-16 LO3 FIGURE 6-5 FIGURE 6-5 The buying situation affects buying center behavior in different ways

Buying Centres, Situations and Organisational Purchasing 1-17 LO3 FIGURE 6-6 FIGURE 6-6 Comparing the stages in a consumer and organizational purchase decision process

The Organisational Buying Process CASE: Stages in buying a machine vision system Buying Centres, Situations and Organisational Purchasing 1-18 LO3  Stage 1: Problem Recognition Stage 1: Problem Recognition  Stage 2: Information Search Make-Buy Decision Value Analysis

The Organisational Buying Process CASE: Stages in buying a machine vision system Buying Centres, Situations and Organisational Purchasing 1-19 LO3  Stage 3: Alternative Evaluation Stage 3: Alternative Evaluation  Stage 4: Purchase Decision Bidder’s List  Stage 5: Postpurchase Behavior

Online Buying in Organisational Markets Importance of the Internet The Nature & Importance of Online Buying in Industrial Markets 1-20 LO4  Prominence of Online Buying in Organizational Markets Prominence of Online Buying in Organizational Markets  E-marketplaces E-marketplaces  Reverse Auction Reverse Auction  Online Auctions in Organizational Markets Online Auctions in Organizational Markets  Traditional Auction Traditional Auction

1-21 The Nature & Importance of Online Buying in Industrial Markets LO4 FIGURE 6-7 FIGURE 6-7 How buyer and seller participants and price behavior differ by type of online auction