Transcript Organizational Markets and Buyer Behavior

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.

Organizations vs. Final
Consumers
 Fewer Buyers
 Bigger Purchases
 Reciprocity/Interconnectivity
 Professional Purchasers/
Buying Centers
 Derived Demand
Fewer Buyers/ Bigger
Purchases
 More
power to the buyer
 Initial Purchase becomes more
important--Big Repeat
purchases
 Longer Decision Process
 Complex Decision Process
Reciprocity/ Interconnectivity
 Potential
for reciprocal purchases
 Your product is likely to be connected
to the performance of other products
• If your product doesn’t perform it may have very
serious repercussions
• The costs of non-performance escalate
substantially
• The augmented product is important
– After sale service
– Response
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
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.
The Bottom Line
Reciprocity/
Interconnectivity
•Cooperation
•Commitment/Investment
•Trust
Fewer Buyers/ Bigger
Purchases
•Commitment/Investment
•Trust
•Cooperation
????
Derived Demand
•Cooperation
Professional Buying
Centers
• Trust
• Cooperation
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?