MKG 300 Chapter 6 Notes PDF

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MKG 300 Chapter 6 (Essential 15e) Business & Organizational Customers and Their Buying BehaviorCh 6 KEY CONCEPTS Builds on the problem-solving concepts in Ch 5 – but more rational Organizational market is actually bigger than the final consumer market  at least in terms of # of purchases ma...

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MKG 300 Chapter 6 (Essential 15e) Business & Organizational Customers and Their Buying Behavior

Ch 6 KEY CONCEPTS - Builds on the problem-solving concepts in Ch 5 – but more rational - Organizational market is actually bigger than the final consumer market  at least in terms of # of purchases made - Presents significant opportunities for marketers - Intermediaries in channel of distribution: Wholesalers and Retailers - Key issues: o Organizations buy for a basic purpose o Basic purchasing needs are economic o Small differences are IMPORTANT - Organizational buyers often concentrate on quality certification in making purchases - ISO 9000  a way for a supplier to document its quality procedures according to internationally recognized standards - Specifications describe the need; simple or very detailed; written or electronic descriptions of what firm wants to buy - Multiple influences and roles in buying center o Buyers – purchase managers responsible o Influencers – expertise, often technical people o Deciders – people with power to select or approve the supplier o Gatekeepers – key positions who control flow of information  Receptionists  Secretaries  Researchers - Buyer – has the responsibility for working with suppliers and arranging terms of sale; has power to select or approve supplier - Evaluating organizational buying influences  sometimes it’s who we know rather than what’s best purchase decision o Vendor analysis considers all influences o Behavioral needs important too e.g., uncooperative sales rep

MKG 300 Chapter 6 (Essential 15e) Business & Organizational Customers and Their Buying Behavior

o Ethical conflicts may arise – reciprocity, “good ole boys” o Purchasing may be centralized – may help achieve economies of scale - Organizational buying process  organizational buyers are PROBLEM SOLVERS - Types of process o New-task Buying  Extended problem solving (ch 5) o Modified Rebuy  Limited problem solving (ch 5) o Straight Rebuy  Routinized problem solving (ch 5) - Relationships in B2B Market: o Casual o “Arm’s length” relationship o Close, long-lasting partnerships - Don’t put all your eggs in one basket - See Figure 6-7 Relationships have many dimensions - JIT delivery  providing materials for a buyer’s production processes as they are needed  reduces inventory and carrying costs - Information sharing o Customer needs, cost data, demand forecasts, new product design details o Can lead to better decisions o Can be risky if possibility one of partners will misuse it o Internet makes it easier to share info between partners Technology reshaping many business markets  changes how many business services are provided Manufacturers are important customers! Services segment is large and growing fast; buying may not be as formal The Government Market  an attractive target

MKG 300 Chapter 6 (Essential 15e) Business & Organizational Customers and Their Buying Behavior

Size & diversity Competitive bids Rigged specs? “approved” supplier list Negotiated contracts common Learning wants Foreign governments FCPA  Foreign Corrupt Practices Act In US, firms are prohibited from paying bribes to foreign officials...