1. McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 5, YOU SHOULD BE ABLE TO: Distinguish among industrial, reseller, and government organizational markets. LO1 Describe the key characteristics of organizational buying that make it different from consumer buying. LO2 5-2

3. LO3 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 5, YOU SHOULD BE ABLE TO: Explain how buying centers and buying situations influence organizational purchasing. Recognize the importance and nature of online buying in organizational markets. LO4 5-3

4. BUYING PUBLICATION PAPER IS A SERIOUS MARKETING RESPONSIBILITY AT JCPENNEY 5-4

5.  Business Marketing Business Marketing THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS LO1  Organizational Buyers Organizational Buyers Industrial Markets (Industrial Firms) Reseller Markets (Resellers) Government Markets (Government Units)  Retailers  Wholesalers Mars Curiosity 5-5

6. FIGURE 5-A FIGURE 5-A Type and number of organization establishments in the U.S.: 2007 5-6

7. MEASURING DOMESTIC AND GLOBAL INDUSTRIAL, RESELLER, AND GOVERNMENT MARKETS LO1  North American Industry Classification System (NAICS) North American Industry Classification System (NAICS)  North American Free Trade Agreement (NAFTA) 5-7

8. FIGURE 5-1 FIGURE 5-1 NAICS breakdown for the information industries sector: NAICS code 51 (abbreviated) 5-8

9. FIGURE 5-2 FIGURE 5-2 Key characteristics and dimensions of organizational buying behavior 5-9

10.  Derived Demand Derived Demand  Size of Order or Purchase  Number of Potential Buyers CHARACTERISTICS OF ORGANIZATIONAL BUYING LO2  Organizational Buying Objectives Profits Efficiency Women/Minority Suppliers/Vendors Environment 5-10

11. CHARACTERISTICS OF ORGANIZATIONAL BUYING LO2  Supplier Development  Organizational Buying Criteria 5-11

12. MARKETING MATTERS Harley-Davidson’s Supplier Collaboration Creates Customer Value…and a Great Ride LO2 5-12

13. FIGURE 5-3 FIGURE 5-3 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 5-13

14. CHARACTERISTICS OF ORGANIZATIONAL BUYING LO2  Buyer-Seller Relationships and Supply Partnerships Reciprocity Supply Partnership Sustainable Procurement 5-14

15. MAKING RESPONSIBLE DECISIONS Sustainable Procurement for Sustainable Growth LO2 Starbucks 5-15

16. Alternative Evaluation CHARTING THE ORGANIZATIONAL BUYING PROCESS STAGES IN THE ORGANIZATIONAL BUYING PROCESS LO3  Organizational Buying Behavior Organizational Buying Behavior Purchase Decision Problem Recognition Information Search Postpurchase Behavior 5-16

17. FIGURE 5-4 FIGURE 5-4 Comparing the stages in a consumer and organizational purchase decision process 5-17

18. CHARACTERISTICS OF ORGANIZATIONAL BUYING THE BUYING CENTER LO3  Buying Center Buying Center  Buying Committee  People in the Buying Center  Roles in the Buying Center Users Influencers Buyers Deciders Gatekeepers 5-18

19. CHARACTERISTICS OF ORGANIZATIONAL BUYING THE BUYING CENTER LO3  Buy Classes Buy Classes Straight Rebuy Modified Rebuy New Rebuy 5-19

20. FIGURE 5-5 FIGURE 5-5 The buying situation affects buying center behavior in different ways 5-20

21.  Prominence of Online Buying in Organizational Markets ONLINE BUYING IN ORGANIZATIONAL MARKETS LO4  E-marketplaces E-marketplaces  Online Auctions in Organizational Markets Traditional Auction Reverse Auction Agentrics Video 5-21

22. MARKETING MATTERS eBay Means Business for Entrepreneurs LO4 5-22

23. FIGURE 5-6 FIGURE 5-6 How buyer and seller participants and price behavior differ by type of online auction 5-23