Chapter 6: Organizational Markets and Buyer Behavior
The Nature and Size of Organizational Markets-
is the marketing of goods
and services to companies, governments, or not-for-profit organizations for use in the creation of
goods and services that they can produce and market to others.
manufacturers, wholesalers, retailers, and government agencies that buy goods and services for
their own use or for resale. (ex-these organizations buy computers and telephone services for their
own uses). Manufacturers buy raw materials and parts that they reprocess into the finished goods
they sell. Wholesalers and retailers resell the goods they buy without reprocessing them.
Organizational buyers include all buyers in a nation except ultimate consumers. The total annual
purchases of organizational buyers are far greater than those of ultimate consumers.
Organizational buyers are divided into three different markets (1) industrial (2) reseller (3)
- these firms in some way reprocess a product or service they buy before
selling it again to the next buyer. There are about 12 million firms in the industrial market. The first
four types of industrial firms (manufacturers, mining, construction, farms, timber, and fisheries) sell
physical products and represent 26% of all the industrial firms (3.1 million). The services market
sells diverse services such as legal advice, auto repair, and dry cleaning. Along with finance,
insurance, and real estate businesses, and transportation, communication, and public utility firms,
these service firms represent 73% of all industrial firms (8.8 million).
- wholesalers and retailers that buy physical products and resell them again
without any reprocessing. There are almost 3 million retails and 860,000 wholesalers in the U.S.
- the federal, state, and local agencies that buy goods and services for the
constituents they serve. There are about 88,000 of these units in the U.S.
Measuring Industrial, Reseller, and Government Markets-
North American Industry
Classification System (NAICS):
provides common industry definitions for Canada, Mexico, and the
U.S. which makes easier the measurement of economic activity in the three member countries of
the North American Free Trade Agreement (NAFTA). The NAICS is consistent in facilitating the
measurement of global economic activity. The NAICS groups economic activity to permit studies of
market share, demand for goods and services, import competition in domestic markets, and similar