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CHAPTER 6: ORGANIZATIONAL MARKETS AND BUYER BEHAVIOR Business marketing: marketing to firms, governments, or not-for-profit organizations Organizational buyers: manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or resale a) Industrial markets – industrial firms in some way reprocess a product or service they buy before selling it again to the next buyer; manufacturers, mining, construction, farms, finance, transportation, not-for-profit organizations b) Reseller markets – wholesalers and retailers that buy physical products and resell them again without any reprocessing are resellers c) Government markets – federal, state, and local agencies that buy goods and services for the constituents they serve North American Industry Classification System (NAICS): provides common industry definitions for Canada, Mexico, and the United States; makes the measurement of economic activity easier by grouping similar firms and showing market share, demand for goods and services, import competition in domestic markets, etc. Derived demand: demand for industrial products and services is driven by the demand of ultimate consumers; based on expectations of future consumer demand Key Characteristics of Organizational Buyer Behavior There are typically not a lot of customers in organizational buyer markets, but their purchase orders are large Products/services are technical in nature and purchased on the basis of specifications; many goods are raw or semi-finished; heavy emphasis on delivery and technical assistance Buyers are well-informed about the product and multiple parties participate in purchasing decisions; there is a lot of negotiation Based on direct selling, advertising is technical; quantity discounts are frequently available Organizational Buying Process and the Buying Center Organizational buying behavior: process by which organizations determine the need for goods and then choose among alternative suppliers
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This note was uploaded on 04/17/2008 for the course MKT 291 taught by Professor Brandabur during the Spring '08 term at Miami University.

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