Organizational%20Markets%20and%20Buyer%20Behavior

1
Organizational Markets and Buyer Behavior

• Compare/contrast final and organizational
  consumers and the buying processes used by each.
• Distinguish between organizational
  products/services and final consumer
  products/services.
• Explain how demand for organizational
  goods/services differs from demand for final
  consumer goods/services.

2
Organizations vs. Final Consumers

• Fewer Buyers
• Bigger Purchases
• Reciprocity/Interconnectivity
• Professional Purchasers/ Buying Centers
• Derived Demand

3
Fewer Buyers/ Bigger Purchases

• More power to the buyer
• Initial Purchase becomes more important--Big
  Repeat purchases
• Longer Decision Process
• Complex Decision Process

4
Reciprocity/ Interconnectivity

• Potential for reciprocal purchases
• Your product is likely to be connected to the
  performance of other products
• If your product doesnt perform it may have very
  serious repercussions
• The costs of non-performance escalate
  substantially
• The augmented product is important
• After sale service
• Response

5
Professional Buyers/Buying Centers

• Assume significant expertise from your customer
• Difficult to determine how decisions for purchase
  are made
• Initiators/Users
• Influencers
• Deciders/Approvers
• Buyers
• Difficult to determine what level has authority
  to make the decision

6
Derived Demand

• Ultimately demand depends on consumers
• Most monitor consumers/endusers as well as
  immediate customer
• Must monitor environmental factors which affect
  the consumer market
• Best information on end-users will come from your
  customers
• Cooperative exchange is required for your firm to
  obtain this information from your customers.

7
The Bottom Line
Reciprocity/ Interconnectivity

• Cooperation
• Commitment/Investment
• Trust

Fewer Buyers/ Bigger Purchases
Professional Buying Centers
????

• Trust
• Cooperation

• Commitment/Investment
• Trust
• Cooperation

Derived Demand

• Cooperation

8
Discussion Questions

• What is the link between transaction costs and
  relationship marketing?
• Does relationship marketing make sense in both
  industrial and consumer contexts?
• Are there times when relationship marketing do
  not make sense in an industrial context?
• Before adopting a relationship marketing
  philosophy as an organization what questions
  should an organizations ask about itself and its
  customers?