1. The Characteristics of Organization Buying Behaviour

2. 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

3. Number of Buyers
There are far fewer purchasers in the business to business market than there is in the consumer market
These few buyers, however, have immense buying power
Example: The Big Three Domestic Automobile Manufactures
The domestic market in North America is dominated by General Motors, Daimler Chrysler, and Ford
Car parts such as tires, windshields, and engine parts are sold in much larger number to these manufacturers than they are to other consumers
While numbers are lower, profits are higher in the business to business market in most cases

4. Location of Buyers
Business markets tend to concentrate in certain areas
In the case of Canada the Quebec City to Windsor area has an immense manufacturing presence
Quebec and Ontario alone make up 68% of the nations manufacturing elements, 76% of the value of goods manufactured, and 76% of people employed in the manufacturing industry
This area is also the center of banking and financial services
Other regions dominate sectors such as agriculture, forestry, and fishing

5. Location of Buyers
To identify and locate potential target markets, marketing frims utilize the North American Industry Classification System (NAICS)
This is a numbering system established by the United States, Mexico, and Canada that provides statistical information about business activity in North America
The system subdivides main categories such as retail into more specific categories
The system then divides these categories into even more specific areas using information stats on sales volume and number of employees
NAICS is used for creating a guide for businesses to target one another using basic information

6. Location of Buyers
The combination of fewer buyers with a higher dollar value and more geographic concentration makes personal selling an attractive and practical way to market goods and services to these markets despite the high cost of activity
Other promotional techniques include direct mail, target marketing, and online communications
The growth of e-commerce is not only growing in the consumer targeted market, but the business to business market as well

7. Demand Characteristics: Derived Demand
Derived Demand is a concept that states that the demand for products sold in business-to-business market is actually derived from consumer demand
Example: Drinks Switching to Aluminum Cans
As beverage manufacturers such as Coca Cola, Pepsi Cola, and Molson moved to the widespread use of the aluminum can, the manufacturers demand for the products produced by aluminum manufacturers increased dramatically
At the same time, demand for glass and steel containers fell and these manufacturers were affected negatively

8. Demand Characteristics: Joint or Shared Demand
Joint or Shared Demand occurs when industrial products can be used only in conjunction with one another (Marketing of one product is reliant on others)
This happens when various parts needed for a finished product may arrive from various sources to be assembled at one central location
Example: Kraft’s Maxwell House Coffee
To manufacture this brand, Kraft needs Coffee Beans (from South America), plastic lids, plastics jars, paper labels, cardboard shipping case
If one of these is unavailable, the product cannot be made and the demand for the other materials goes down as well
For these reasons most companies always have an alternative source at the ready