ch 7. organizational buying refers to the decision-making process by which formal organizations...
TRANSCRIPT
CH 7
ANALYZING BUSINESS MARKETS
Organizational buying refers to the decision-making process by which formal organizations establish the
need for purchased products and services, and identify, evaluate, and choose among alternative
brands and suppliers.
WHAT IS ORGANIZATIONAL BUYING?
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• Expand understanding of customer needs
• Compete globally as China and India reshape markets
• Master analytical tools and improve quantitative skills
• Reinstate innovation as an engine of growth
• Create new organizational models and linkages
TOP BUSINESS MARKETING CHALLENGES
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• Fewer, larger buyers• Close supplier-customer
relationships• Professional purchasing• Many buying influences
• Multiple sales calls• Derived demand• Inelastic demand• Fluctuating demand• Geographically
concentrated buyers• Direct purchasing
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CHARACTERISTICS OF BUSINESS MARKETS
BUYING SITUATION
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Straight rebuy
Modified rebuy
New task
SYSTEMS BUYING AND SELLING
Turnkey solution desired;
bids solicited
Primecontractors
Second-tiercontractors
System subcomponents
assembled
THE BUYING CENTER
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Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
• Who are the major decision participants?
• What decisions do they influence?
• What is their level of influence?
• What evaluation criteria do they use?
OF CONCERN TO BUSINESS MARKETERS
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SALES STRATEGIES
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Small Sellers
Large Sellers
Key Buying Influencers
MultilevelIn-depthSelling
• Problem recognition• General need
description• Product specification• Supplier search• Proposal solicitation• Supplier selection• Order-routine
specification• Performance review
STAGES IN THE BUYING PROCESS: BUYPHASES
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TABLE 7.2 BUYGRID FRAMEWORK
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• Websites organized using vertical hubs
• Websites organized using functional hubs
• Direct extranet links to major suppliers
• Buying alliances• Company buying sites
METHODS OF E-PROCUREMENT
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TABLE 7.3 VENDOR ANALYSIS
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HANDLING PRICE-ORIENTED CUSTOMERS
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Limit quantity purchased
Allow no refunds
Make no adjustments
Provide no services
• Internal engineering assessment
• Field value-in-use assessment
• Focus-group value assessment
• Direct survey questions
• Conjoint analysis• Benchmarks• Compositional approach• Importance ratings
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METHODS FOR RESEARCHING CUSTOMER VALUE
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ORDER ROUTINE SPECIFICATION
Stockless purchase plans
Vendor-managedinventory
Continuous replenishment
ESTABLISHING CORPORATE TRUST
AND CREDIBILITY
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Expertise
LikeabilityTrustworthiness
FIGURE 7.1 TRUST DIMENSIONS
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Transparent
Product/ServiceQuality
Incentive
Partnering
Cooperating Design
Product Comparison
Supply Chain
Pervasive Advocacy
FACTORS AFFECTING BUYER-SUPPLIER RELATIONSHIPS
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Availability of alternatives
Supply marketdynamism
Complexity ofsupply
Importance ofsupply
• Basic buying and selling
• Bare bones• Contractual
transaction• Customer supply
• Cooperative systems• Collaborative• Mutually adaptive• Customer is king
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CATEGORIES OF BUYER-SELLER RELATIONSHIPS
Opportunism is some form of cheating or undersupply relative to an implicit or explicit
contract.
WHAT IS OPPORTUNISM?
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