BUSI 406 PRINCIPLES OF MARKETING: BUSINESS AND ORGANIZATIONAL CUSTOMERS AND THEIR BUYING BEHAVIORToday’s AgendaPowerPoint PresentationUnderstanding Business & Organizational Customers for Marketing StrategyBusiness/Organizational BuyersToday’s GoalsSlide 7Characteristics of Business MarketsSpecifications and Quality more ImportantWho Influences Decisions?Evaluating Organizational Buying InfluencesOrganizational Buyers are Problem SolversBuyer-Seller RelationshipsRelationships Have Many DimensionsSlide 15Dynamics of Buyer-Seller RelationshipsManufacturers are Important Customers; Services are DifferentRetailers & Wholesalers Buy for Their CustomersThe Government MarketToday’s Take-AwaysBUSI 406PRINCIPLES OF MARKETING:BUSINESS AND ORGANIZATIONAL CUSTOMERS AND THEIR BUYING BEHAVIORToday’s AgendaAny questions?See latest modified class scheduleAre you making progress in selecting your team project client? Projects must be “real and worthwhile”Return First ExamsDiscuss material you read in Chapters 6Guest speaker Wednesday – General MillsUnderstanding Business & Organizational Customers for Marketing StrategyBusiness/Organizational BuyersKey differences betweenorganizational customers & final consumers•Purchase criteria & specifications•Multiple buying influence•Problem-solving process•B2B e-commerce•Buyer-seller relationshipsKey characteristics of specifictypes of organizationalCustomers•Manufacturers•Producers of services•Retailers & wholesalers•Government unitsChapter 5Final Consumersand Their BuyingBehaviorChapter 6Business and OrganizationalCustomers and Their BuyingBehaviorToday’s GoalsWho are business/organizational customers?How are they different from final consumers?How do organizational buyers solve problems?What are the types of buyer-seller relationships in B2B?What are the key characteristics of specific types of organizational customers?Manufacturers & Service ProvidersWholesales & RetailersGovernment (US & International)NonprofitsBusiness/Organizational Buyers•Federal•State and Local•Federal•State and LocalGovernment UnitsGovernment Units•Wholesalers•Retailers•Wholesalers•RetailersIntermediariesIntermediaries•National•State and Local•National•State and LocalNonprofitsNonprofits•Manufacturers•Farms, mines, etc.•Financial Institutions•Other providers•Manufacturers•Farms, mines, etc.•Financial Institutions•Other providersProducersProducersAll Business & Organizational CustomersAll Business & Organizational CustomersCharacteristics of Business MarketsBusiness markets are bigger than consumer marketsGoal is to satisfy their own customersThey typically focus more on economic factors; minimizing total costCustomized marketing mix  Sales representatives matter a lotMore opportunities in international marketsSegmentation works for businesses tooSpecifications and Quality more ImportantSpecifications Describe the NeedSpecifications Describe the NeedQuality Certification- ISO 9000Quality Certification- ISO 9000Specifications Describe the NeedSpecifications Describe the NeedWho Influences Decisions?GatekeepersGatekeepersDecidersDecidersInfluencersInfluencersUsersUsersBuyersBuyersBuyingCenterEvaluating Organizational Buying InfluencesEthical Conflicts May AriseEthical Conflicts May AriseEthical Conflicts May AriseEthical Conflicts May AriseVendor Analysis Considers All InfluencesVendor Analysis Considers All InfluencesBehavioral Needs Are Important TooBehavioral Needs Are Important TooVendor Analysis Considers All InfluencesVendor Analysis Considers All InfluencesBehavioral Needs Are Important TooBehavioral Needs Are Important TooPurchasing May Be CentralizedPurchasing May Be CentralizedOrganizational Buyers are Problem SolversCharacteristicsTime requiredMultiple influencesReview of suppliersInformation neededMuchMuchMuchMuchNew-TaskBuyingType of ProcessLittleLittleNoneLittleStraightRebuyMuchMuchMuchMuchNew-TaskBuyingMediumSomeSomeSomeModifiedRebuyLittleLittleNoneLittleStraightRebuyBuyer-Seller RelationshipsBUTClose RelationshipsMay ProduceMutual BenefitsClose RelationshipsMay ProduceMutual Benefits-Mutual trust -Long-term outlook-Share tasks at lower total costRelationships MayNot Make SenseRelationships MayNot Make Sense-Reduced flexibility-Some purchases are too small or infrequent-Some purchases require much special attentionRelationships Have Many DimensionsRelationships Have Many DimensionsDynamics of Buyer-Seller RelationshipsBuyers May Use Several Sources to Spread RisksBuyers May Use Several Sources to Spread RisksPowerful Customer May Control the RelationshipPowerful Customer May Control the RelationshipBuying Varies by Customer TypeBuying Varies by Customer TypeManufacturers are Important Customers; Services are DifferentNot Many Big OnesNot Many Big OnesBusiness Data Classifies IndustriesBusiness Data Classifies IndustriesClustered in Geographic AreasClustered in Geographic AreasNAICS CodesNAICS CodesRetailers & Wholesalers Buy for Their CustomersCommittee Buying Is ImpersonalCommittee Buying Is ImpersonalReorders Are Straight RebuysReorders Are Straight RebuysBuyers Watch Computer Output CloselyBuyers Watch Computer Output CloselyThe Government MarketSize and DiversitySize and DiversityCompetitive BidsCompetitive Bids“Approved” Supplier List“Approved” Supplier ListGovernment WantsGovernment WantsForeign GovernmentsForeign GovernmentsFCPAFCPAToday’s Take-AwaysBusiness and organizational customers (B2B) are a big opportunity, bigger than B2COrganizational customers are different from consumers (B2C)Many different people may influence a decisionOrganizational buyers are problem solversRelationships matter in B2BManufacturers are important customersService providers are usually smaller and spread outRetailers and wholesalers buy for their customersThe government market (local, state, federal) is also a major opportunity, as are