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2. LO 6-2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: LO 6-1 Distinguish among industrial, reseller, and government organizational markets. Describe the key characteristics of organizational buying that make it different from consumer buying. 6-2

3. LO 6-4 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: LO 6-3 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. 6-3

4. BUYING IS MARKETING TOO! PURCHASING PUBLICATION PAPER FOR JCPENNEY 6-4

5. THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS LO 6-1  Business Marketing  Organizational Buyers Industrial Markets (Industrial Firms) Reseller Markets (Resellers) Government Markets (Government Agencies) Global Organizational Markets  Retailers  Wholesalers 6-5

6. FIGURE 6-A FIGURE 6-A Type and number of organization establishments in the U.S.: 2007 6-6

7. MEASURING DOMESTIC AND GLOBAL INDUSTRIAL, RESELLER, AND GOVERNMENT MARKETS LO 6-1  North American Industry Classification System (NAICS)  North American Free Trade Agreement (NAFTA) 6-7

8. FIGURE 6-1 FIGURE 6-1 NAICS breakdown for the information industries sector: NAICS code 51 6-8

9. FIGURE 6-2 FIGURE 6-2 Key characteristics and dimensions of organizational buying behavior 6-9

10. CHARACTERISTICS OF ORGANIZATIONAL BUYING LO 6-2  Derived Demand  Size of Order or Purchase  Number of Potential Buyers  Organizational Buying Objectives Profits Efficiency Women/Minority Suppliers/Vendors Environment/ Sustainability 6-10

11. MARKETING INSITE Supplier Diversity is a Strategic Initiative at AT&T LO 6-2 6-11

12. CHARACTERISTICS OF ORGANIZATIONAL BUYING ORGANIZATIONAL BUYING CRITERIA LO 6-2  ISO 9000  Supplier Development  Organizational Buying Criteria 6-12

13. FIGURE 6-B FIGURE 6-B Key organizational buying criteria 6-13

14. CHARACTERISTICS OF ORGANIZATIONAL BUYING BUYER-SELLER RELATIONSHIPS & SUPPLY PARTNERSHIPS LO 6-2  Supply Partnership  Sustainable Procurement  Reciprocity 6-14

15. MARKETING MATTERS Milsco Mfg.—Delivering a Great Ride for Customers’ Seats LO 6-2 6-15

16. MAKING RESPONSIBLE DECISIONS Sustainable Procurement for Sustainable Growth LO 6-2 Starbucks 6-16

17. CHARACTERISTICS OF ORGANIZATIONAL BUYING THE BUYING CENTER LO 6-3  Buying Center  Buying Committee  People in the Buying Center  Roles in the Buying Center Users Influencers Buyers Deciders Gatekeepers 6-17

18. CHARACTERISTICS OF ORGANIZATIONAL BUYING THE BUYING CENTER LO 6-3  Buy Classes Straight Rebuy Modified Rebuy New Rebuy 6-18

19. FIGURE 6-3 FIGURE 6-3 The buying situation affects buying center behavior in different ways 6-19

20. CHARACTERISTICS OF ORGANIZATIONAL BUYING STAGES IN THE ORGANIZATIONAL BUYING PROCESS LO 6-3  Organizational Buying Behavior Information Search Alternative Evaluation Purchase Decision Postpurchase Behavior Problem Recognition 6-20

21. FIGURE 6-4 FIGURE 6-4 Comparing the stages in a consumer and organizational purchase decision process 6-21

22. CHARACTERISTICS OF ORGANIZATIONAL BUYING BUYING A MACHINE VISION SYSTEM LO 6-3  Problem Recognition Make-Buy Decision  Information Search Value Analysis 6-22

23. CHARACTERISTICS OF ORGANIZATIONAL BUYING BUYING A MACHINE VISION SYSTEM LO 6-3  Alternative Evaluation Bidder’s List  Purchase Decision  Postpurchase Behavior 6-23

24. FIGURE 6-5 FIGURE 6-5 Product and supplier selection criteria for buying machine vision equipment emphasize factors other than price An optic component in a larger machine vision system for soft drink cans Percentage of machine vision buyers citing individual selection criteria 6-24

25. ONLINE BUYING IN ORGANIZATIONAL MARKETS LO 6-4  Prominence of Online Buying in Organizational Markets  E-marketplaces  Online Auctions in Organizational Markets Traditional Auction Reverse Auction 6-25

26. MARKETING MATTERS eBay Means Business for Entrepreneurs LO 6-4 6-26

27. FIGURE 6-6 FIGURE 6-6 How buyer and seller participants and price behavior differ by type of online auction 6-27

28. TREK: BUILDING BETTER BIKES THROUGH ORGANIZATIONAL BUYING VIDEO CASE 6 6-28