Download presentation
Presentation is loading. Please wait.
1
Principles of Marketing - UNBSJ
BA 2303 Principles of Marketing - UNBSJ Organizational Markets and Buyer Behaviour Instructor – Terry Conrod
2
Learning Objectives BA 2303
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.
3
THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS
BA 2303 THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS Business Marketing Organizational buyers
4
THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS
BA 2303 THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS Industrial Markets Industrial firms Reseller Market Resellers Government Markets Government Units Global Organizational Markets
5
BA 2303 MEASURING DOMESTIC AND GLOBAL MARKETS (INDUSTRIAL, RESELLER, & GOVERNMENT) North American Industry Classification System (NAICS) NAICS Logo Providing common industry definitions to measure NAFTA economic activity
6
BA 2303 NAICS breakdown for information and cultural industries sector: NAICS code 51 (abbreviated)
7
What are the three main types of organizational buyer?
BA 2303 Concept Check What are the three main types of organizational buyer? Answer: The three main types of organizational buyers are (1) industrial markets, (2) resellers, and (3) government markets.
8
What is the North American Industry Classification System (NAICS)?
BA 2303 Concept Check What is the North American Industry Classification System (NAICS)? Answer: The North American Industry Classification System (NAICS) provides common industry definitions for Canada, Mexico, and the United States. The NAICS facilitates the measurement of economic activity in the three member countries of the North American Free Trade Agreement (NAFTA).
9
What is the North American Product Classification System (NAPCS)?
BA 2303 Concept Check What is the North American Product Classification System (NAPCS)? Answer: The NAPCS is an integrated demand-based classification framework that classifies both goods and services according to how they are principally used.
10
Terms Used in Organizational Purchasing Processes
BA 2303 Terms Used in Organizational Purchasing Processes RFI, RFP, RFQ, Tender Submissions, Proposals, Quotes, FPQ, Bids Unsolicited Proposal Qualified Vendor or Bidder Technical, Commercial or other criteria Approved Supplier, Preferred or Exclusive Supplier Standing Offer MOU, Contract, Term Sheet Purchase Order
11
CHARACTERISTICS OF ORGANIZATIONAL BUYING
BA 2303 CHARACTERISTICS OF ORGANIZATIONAL BUYING Demand Characteristics Derived demand Size of the Order or Purchase Number of Potential Buyers Organizational Buying Objectives Contracting Organizational Buying Criteria ISO 9000 or other industry standards of quality or consistency Reverse marketing Evaluates the product and the seller
12
Key characteristics of organizational buying behavior
BA 2303 Key characteristics of organizational buying behavior
13
CHARACTERISTICS OF ORGANIZATIONAL BUYING
BA 2303 CHARACTERISTICS OF ORGANIZATIONAL BUYING Buyer-Seller Relationships and Supply Partnerships Reciprocity Supply partnership The Buying Centre: A Cross-Functional Group People in the Buying Centre Roles in the Buying Centre Buying Situations and the Buying Centre Buy classes
14
B2B Sales – Position of Strength
BA 2303 B2B Sales – Position of Strength Relationships Building trust and gaining access to the key individuals Industry Knowledge Insight into customers industry, trends, value chains Political Awareness Where is the power base and the influencers Company Effectiveness Getting things done in your firm for your customer Customer Knowledge Financial situation, firm’s products-services, business direction, organization The sales person competencies Skills, knowledge, personality, performance
15
Selling at the Right Level
BA 2303 Selling at the Right Level Buying Phases Organization Level Sales Cycle Corporate planning Executive Strategic Forming corporate initiatives Executive Identifying suppliers Management / Operational Solutions Short-listing suppliers Management / Operational Commodity Selecting suppliers Management / Operational Negotiating contracts Management / Operational Project implementation Operational Tracking & analyzing results Operational
16
How they buying situation affects buying centre behavior
BA 2303
17
BA 2303 Concept Check What one department is almost always represented by a person in the buying centre? Answer: A single buyer or purchasing manager is almost always represented by a person in the buying centre.
18
What are the three types of buying situations or buy classes?
BA 2303 Concept Check What are the three types of buying situations or buy classes? Answer: The three types of buying situations or buy classes are: (1) Straight rebuy, (2) Modified rebuy, and (3) New buy.
19
Comparing the stages in consumer and organizational purchases
BA 2303 Comparing the stages in consumer and organizational purchases
20
CHARTING THE ORGANIZATIONAL BUYING PROCESS
BA 2303 CHARTING THE ORGANIZATIONAL BUYING PROCESS Stages in the Organizational Buying Process Organizational buying behavior Buying a Machine / System Problem Recognition Make-buy decision Information Search Value analysis Alternative Evaluation Bidder’s list Purchase Decision Post-purchase behavior
21
What is a make-buy decision?
BA 2303 Concept Check What is a make-buy decision? Answer: A make-buy decision is an evaluation of whether components and assemblies will be purchased from outside suppliers or built by the company itself. This process is generally done in the problem recognition stage of the buying decision process.
22
Concept Check What is a bidder’s list? Answer:
BA 2303 Concept Check What is a bidder’s list? Answer: A bidders list is a list of firms believed to be qualified to supply a given item.
23
ONLINE BUYING IN ORGANIZATIONAL MARKETS
BA 2303 ONLINE BUYING IN ORGANIZATIONAL MARKETS Prominence of Online Buying in Organizational Markets E-Marketplaces: Virtual Organizational Markets Online Auctions in Organizational Markets Traditional Auction Reverse Auction
24
BA 2303 How buyer and seller participants and price behavior differ by type of online auction
25
What are e-marketplaces?
BA 2303 Concept Check What are e-marketplaces? Answer: E-marketplaces, also known as B2B exchanges and e-hubs, are online trading communities which bring together buyer and supplier organizations.
26
BA 2303 Concept Check In general, which type of online auction creates upward pressure on bid prices and which type creates downward pressure on bid prices? Answer: As would-be buyers become involved in a traditional auction, there is an upward pressure on bid prices. A reverse auction works in the opposite direction from a traditional auction. In a reverse auction, a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other. As more would-be suppliers become involved, there is a downward pressure on bid prices for the buyer's business.
27
BA 2303 Business Marketing Business marketing is the marketing of goods and services to commercial enterprises, governments, and other profit and not-for-profit organizations for use in the creations of goods and services that they then produce and market to other business consumers, as well as individuals and ultimate consumers.
28
Organizational Buyers
BA 2303 Organizational Buyers Organizational buyers are those manufacturers, wholesalers and retailers, and government agencies that buy goods and services for their own use or for resale.
29
BA 2303 Industrial Firms Industrial firms reprocess a product or service they buy before selling it again to the next buyer.
30
BA 2303 Resellers Wholesalers and retailers who buy physical products and resell them again without reprocessing are resellers.
31
BA 2303 Government Units Government units are the federal, provincial, and local agencies that buy goods and services (typically large volume) for the constituents they serve.
32
BA 2303 Derived Demand Derived demand means that the demand for industrial products and services is driven by, or derived from, demand for consumer products and services.
33
Organizational Buying Criteria
BA 2303 Organizational Buying Criteria Organizational buying criteria are the objective attributes of the supplier’s products and services and the capabilities of the supplier itself.
34
BA 2303 ISO 9000 Standards ISO 9000 standards are standards for registration and certification of a manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures.
35
BA 2303 Reverse Marketing Reverse marketing involves the deliberate effort by organizational buyers to build relationships that shape suppliers’ products services, and capabilities to fit a buyer’s needs and those of its customers.
36
BA 2303 Reciprocity Reciprocity is an industrial buying practice in which two organization agree to purchase each other’s products and services.
37
BA 2303 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 and/or increasing the value of products and services delivered to the ultimate consumer.
38
BA 2303 Buying centre A buying centre is made up of several people in an organization who participate in the buying process.
39
BA 2303 Buy Classes Buy classes are straight rebuy, modified rebuy, and new buy.
40
Organizational Buying Behaviour
Organizational buying behaviour is the decision- making process that organizations use to establish the need for products and services and identify, evaluate, and chose among alternative brands and suppliers.
41
BA 2303 Make-Buy Decision A make-buy decision is an evaluation of whether components and assemblies will be purchased form outside suppliers or built by the company itself.
42
BA 2303 Value Analysis Value analysis is the systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs.
43
BA 2303 Bidder’s List A bidder’s list is a list of firms believed to be qualified to supply a given item.
44
BA 2303 E-Marketplaces E-marketplaces are online trading communities that bring together buyer and seller organizations.
45
BA 2303 Traditional Auction In a traditional auction a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other.
46
BA 2303 Reverse Auction In a reverse auction, a buyer communicates a need for a product of service and would-be suppliers are invited to bid in competition with each other.
Similar presentations
