1. Buying Markets
By Jeff Wagner

2. Objectives Define Market Buyer
Identify and describe three buyer markets
Know the characteristics of each market
Identify and describe two reseller markets
Know the benefits of distributors

3. Set Induction
Where would you go if you were going to buy a new sweater?
Would you go to the same place to purchase the material to make a sweater?
Probably not. Discuss …

4. Organizational Buyers
Those manufacturers, retailers and government agencies that buy goods and services for their own business use or resale.
Job Titles:
Purchasing Manager
Industrial buyers
Procurement Manager
Buyer

5. Types of Buyers Markets
Industrial
Reseller
Government & Institutional
What is bought and how it is bought has to do with the type of company making the purchase

6. Industrial Markets
Consist of all organizations that acquire goods and services in the production of other products or services that are sold, rented, or supplied to others.
Installations: Major capital items typically used directly in the production of goods
Raw Materials: Products purchased in their raw state for the purpose of producing them into consumer goods
Accessory Equipment:

7. Industrial Markets Characterized by:
Fewer buyers buying in large quantities
A close customer-supplier relationship
More geographically concentrated
Derived demand
Inelastic demand
Several buying influences
Direct purchasing
Leasing
Installations: Major capital items typically used directly in the production of goods
Raw Materials: Products purchased in their raw state for the purpose of producing them into consumer goods
Accessory Equipment:

8. Industrial Markets Raw Materials: Installations: Accessory Equipment:
Five categories of use
Installations:
Major capital items used directly in production (manufacturing equipment)
Accessory Equipment:
Less expensive capital items (computer equipment)
Raw Materials:
Products purchased in the raw state for processing into finished goods
Fabricated Parts and Materials
Items that are purchased to be placed in the final product (batteries)
Industrial Supplies
Frequently purchased items that contribute indirectly to production (computer paper)

9. Industrial Markets Industries making up the Industrial Market include:
Agriculture
Forestry
Fisheries
Mining
Manufacturing
Construction
Transportation
Communication
Public Utilities
Banking
Finance
Insurance
Distribution
Services

10. Reseller Markets
Companies who buy finished goods and resell them without any reprocessing
Types of Reseller Markets:
Wholesalers/Distributors
Retailers

11. Wholesalers/Distributors
Obtain goods from manufacturers and resell them to industrial users, other wholesalers, and retailers
“Middle Man”

12. Wholesalers/Distributors
used when they are more efficient in performing one or more of the following functions:
Selling or promoting
Buying and assortment building
Bulk breaking
Warehousing
Transportation
Financing
Risk bearing
Market information
Management services and counseling
Companies today are outsourcing more than ever before. A small manufacturer may not be able to afford a large sales force. They can look to the a distributor to act as their sales force.

13. Retailers
Intermediaries that purchase products and re-sell them to final consumers for non-business use
Top US Retailers
Sales # Stores
Wal-Mart $328.7 Billion 4,570
Kroger $ ,538
Target $ ,778
Costco $
Home Depot $ ,965

14. Reseller Markets Characterized by:
More buyers buying in smaller quantities
Can choose from a variety of suppliers
Geographically dispersed
Demand driven by consumer
Fewer buying influences

15. Government & Institutional Markets
Government markets are made up of federal, state, and local agencies that buy goods and services for the constituents they serve.
Include:
Federal Aviation Administration
Defense Department
Department of Sanitation

16. Government & Institutional Markets
Institutions must provide goods and services to the people in their care
Include:
Schools
Hospitals
Nursing homes
Prisons

17. Government & Institutional Markets
Buying objectives are not profit oriented
Characterized by:
Special Needs
Low Budget
Tend to favor domestic suppliers over foreign
Usually follow strict guidelines
Emphasis placed on price
Product differentiation, advertising, or personal selling are not much of a consequence in a winning bid

18. Buying Markets Summary
The three buying markets are :
Industrial
Reseller
Government/ Institutional
Buying Markets are defined by the use the buyer intends to make of the good purchased.