Marketing Final 3

Front 1

Organizational Buyers (as opposed to Ultimate Consumers)

Back 1

- Those manufacturers, wholesalers, retailers, and government agencies that buy good and services for their own use or for resale
- Organizational Buyers are divided into three different markets:
1. Industrial Markets – reprocess a product or service they buy before selling it again to the next buyer
2. Reseller Markets – wholesalers/retailers that buy products and resell them without reprocessing
3. Government Markets – federal state, local who buy products/services for the constituents they serve.

Front 2

Industrial Markets

Back 2

reprocess a product or service they buy before selling it again to the next buyer

Front 3

Reseller Markets

Back 3

wholesalers/retailers that buy products and resell them without reprocessing

Front 4

Government Markets

Back 4

– federal state, local who buy products/services for the constituents they serve.

Front 5

Derived Demand

Back 5

Derived Demand – driven by, or derived from, demand for consumer products and services - (CoOB)

Front 6

Size of the order or purchase

Back 6

a. Much larger – competitive bids
b. Participants in the decision – longer decision making

Front 7

Number of potential Buyers

Back 7

few buyers

Front 8

Organizational Buying Objectives

Back 8

- Organizational Buying Objectives
o Business firms – increase profits thru reducing costs and increase sales
o Not-for-Profit – meet needs of constituents being served
o Minority owned suppliers

Front 9

Organizational Buying Criteria

Back 9

Objective attributes of the suppliers products and services and the capabilities of the supplier itself:
o Price
o meet quality specs
o meet delivery schedules
o technical capability
o warranties/guarantees
o Past performance
o Production facilities and capacity

Front 10

Organizational Buying Process

Back 10

- Decision making process that organizations use to establish the need for products and services and identify, evaluate and choose among alternate brands and suppliers
- Same buying process decisions as consumers:

Front 11

Business Marketing

Back 11

- The marketing of products to companies, governments, or not for profit organizations for use in the creation of goods and services that they then produce and market to others.

Front 12

Buyer-Seller Relationships

Back 12

- Complex and lengthy negotiations
- Reciprocity
- Supply partnership – “win-win” (results lower costs and higher quality in the supply chain)

Front 13

Buying Center

Back 13

Consists of people in an organization that participates in the buying process and share common goals, risks and knowledge important to purchase decisions
- who what when where how and why?

Front 14

Buying Situations

Back 14

- straight rebuy – reorders existing product/service
- modified rebuy – change specs, although item is relatively the same
- new buy – first time buyer

Front 15

new buy

Back 15

first time buyer

Front 16

modified rebuy

Back 16

-– change specs, although item is relatively the same

Front 17

straight rebuy

Back 17

reorders existing product/service

Front 18

Online buying in Organizational Markets

Back 18

- Worldwide – 80% in terms of both volume and dollars
- US – 60% online

Front 19

Why buying online?

Back 19

o timely supplier info
o reduce costs of ordering/processing
o marketers – reduce sales/advertising costs, and reach more potential customers

Front 20

E-Marketplaces

Back 20

(Virtual Organizational Markets) – online trading communities that bring together buyers and supplier organizations

Front 21

Traditional Online Auction

Back 21

o Traditional – put item up for sale, bids, made provide upward pressure on price
 Benefit – supplier

Front 22

Reverse online Auction

Back 22

o Reverse – buyer communicates a need for product, suppliers bid, downward pressure on price
 Benefit – buyer – focus on lowest price
 Negative – supplier – emphasis on price
 Benefit – supplier – provides opportunity to bid.

Front 23

North American Industry Classification System (NAICS)

Back 23

- provides common industry definitions for NAFTA partners
o Economic activity
o market research
o market opportunities
- Limitation – not all participating countries indicated 5 digit national industry codes