ADM2320X summer 2008-ch.6

ADM2320X summer 2008-ch.6 - Organizational Markets &...

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1 Organizational Markets & Buyer Behaviour Chapter Six
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2 Why Organizations Buy Business to business marketing (B2B) Purchase of goods & services by business for non- personal consumption For re-sale “Organizational markets” are 4 times bigger than consumer market
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3 Nature of organizational markets Business marketing: Marketing of goods and services to companies, governments, or not-for-profit organizations for use in creation of goods and services that they can produce and market to others. Organizational buyers: Manufacturers, wholesalers, retailers and government agencies that buy goods and services for their own use and for resale .
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4 Classifying B2B Markets Business marketplace Producers (industrial) 40,000 manufacturers in Canada Resellers Wholesalers (65,000) Retailers (200,000) Organizations (government: fed-.prov.-mun.) Governments (MERX) NGOs; not-for-profit institutions
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5 North American Industry Classification System (NAICS) Provides common industry definitions for Canada, USA and Mexico facilitating measurement of economic activity in NAFTA market Standardized coding system for identifying products by: Sector of economy Subsector Industry group Specific industry Country national industry (Canada, USA, Mexico)
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6 Differences from consumer market Multiple buyers – everyone in purchase decision process must be satisfied Fewer number of buyers compared with more than 10 M consumers across Canada) Larger purchase orders Direct sales – emphasis on sales force More complex industrial products Buyers at head office (Tor., Mtl., Calgary)
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7 B2B demand: derived; inelastic; fluctuating & joint Derived: To satisfy consumer demand for product or service produced by business Inelastic: No matter the rise or fall in price, same amount is purchased Fluctuating: Multiplier effect (new housing starts)
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This note was uploaded on 12/08/2009 for the course TEFLER ADM1300 taught by Professor Koppel during the Fall '09 term at University of Ottawa.

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ADM2320X summer 2008-ch.6 - Organizational Markets &...

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