1. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–1 Part 2: Understanding markets Chapter 7: Business-to-business marketing Step 4: Analyse buyer behaviour

2. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–2 When we finish this lecture you should Know what constitutes a business or organisational customer Understand why ‘multiple influence’ is common in business and organisational purchase decisions Understand the main methods used in organisational buying Be aware of the basic e-commerce methods used in organisational buying Understand the various buyer–seller relationships, and their benefits and limitations Have some knowledge of manufacturers and why they are an important customer group Understand how buying by service companies, retailers, wholesalers, governments and non-profit organisations is similar to, and different from, buying by manufacturers

3. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–3 Figure 7.1 Examples of different types of business and organisational customers

4. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–4 Characteristics of organisational customers Organisations make purchases to satisfy needs – Buy goods and services to satisfy the demand for products they, in turn, supply to the market Economic purchasing needs – Economic factors are very important when making purchase decisions – Organisational buyers are less emotional in their buying than consumers – Buyers consider the total cost – Buyers look for dependability

5. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–5 Characteristics of organisational customers (continued) Basic approaches are similar in many countries around the world Organisations often purchase on the basis of purchasing specifications

6. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–6 Buying centre Business purchases often involve multiple influence ‘Buying centre’—all the people who participate in or influence a particular purchase A buying centre varies from purchase to purchase It does not appear on the organisational chart It’s structure may be informal or formal

7. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–7 Figure 7.2 Multiple influence and roles in the buying centre

8. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–8 Problem solving by organisational buyers New-task buying – A firm has a new need and the buyer wants a great deal of information Modified rebuy – The between process where some review of the buying situation is done—although not as much as in new-task buying Straight rebuy – A routine repurchase that may have been made many times before

9. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–9 Figure 7.3 Overlapping needs of an individual buyer and the buyer’s organisation

10. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–10 Figure 7.4 Organisational buying process

11. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–11 Figure 7.5 Major sources of information used by organisational buyers

12. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–12 Figure 7.6 Organisational buyers methods

13. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–13 E-commerce and business buying Community sites Catalogue sites Exchanges Procurement hub sites Competitive bids Auction sites Reverse auctions Collaboration hubs Search bots

14. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–14 Buyer–seller relationships Cost savings Quality control Reduced flexibility Relationship dimensions – Cooperation – Shared information – Operational linkages – Contractual obligations

15. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–15 Buyer–seller relationships (continued) – Relationship-specific adaptations – Control and risk taking – Reciprocity Relationships and networks

16. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–16 Figure 7.7 Key dimensions of relationships in business markets

17. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–17 Organisational customer types Manufacturers Providers of services Retailers and wholesalers Government organisations Non-profit organisations

18. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–18 Figure 7.8 Characteristics of manufacturing companies, by employment size group

19. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–19 Standard industrial classification codes (ANZSIC) Number codes that group firms in a similar line of business Much government data is organised by SIC codes Much detail is available – Two digits codes are the most general – Additional digits add more details (that is, four digit codes are the most detailed)

20. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–20 Figure 7.9 Illustrative ANZSIC breakdown for apparel industries

21. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–21 Providers of services Geographically spread out Growing in number Buying may be informal

22. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–22 Retailers and wholesalers Inventory control Buying decisions Open-to-buy

23. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–23 Government organisations Government bodies – Federal government – State governments – Local governments – Foreign governments Tendering Approved suppliers Negotiated contracts

24. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–24 Basic steps in selling to governments The government market is very complex Companies should research this market very carefully Some basic steps – Step 1—Getting to know the market prior to approach – Step 2—Developing relationships and promoting the company’s products – Step 3—Tendering for business

25. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–25 Non-profit organisations Charities, cultural groups and disadvantaged associations are all suffering from dwindling government funding These organisations can benefit from developing and following marketing plans Artistic companies can benefit from the segmentation of their customers

26. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–26 Marketing services to business and organisational customers Some services have no impact on organisational performance Other services have the potential to impact company operations Services are prone to rapid change and adaptation in some instances

27. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 7–27 What we will be doing in the next chapter In the following chapter we will be discussing product planning, including – The meaning of the term ‘product’ – The difference between goods and services – The importance of brands – Packaging and warranties