B2B
• Why Organizations Buy:
Business-to-Business Markets
and B2B E-Commerce
Business Markets
• Generally, the same principles are true for
business and consumer customers
• There are characteristics that make B2B
buying more complex
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Multiple buyers
Number of customers
Size of purchases
Geographic concentration
Types of Organizational Markets
• Industrial Markets
• Industrial firms
• Reseller Market
• Resellers
• Government Markets
• Government Units
• Global Organizational Markets
Type and number of organizational customers
NAICS breakdown for information industries sector:
NAICS code 51 (abbreviated)
Key characteristics of organizational buying behavior
Derived Demand
• B2B demand is derived demand because a
business’s demand for goods and services
comes either directly or indirectly from
consumers’ demands
Derived Demand
Demand for education
Derived demand - textbooks
Derived demand - paper
Derived demand - pulp
Derived demand forestry products
The Nature of Business
Buying
• The Buying Situation
• The Professional Buyer
• The Buying Center
The Professional Buyer
• Titles: purchasing agents, procurement
officers, director of materials management
• Focus on economic factors beyond the
initial price of a product including
transportation and delivery charges,
accessory products or supplies,
maintenance, disposal costs, etc.
• Large firms practice centralized purchasing
- one department does all buying
The Buying Center
• A cross-functional group of people in the
organization who participate in the
decision-making process
• May include production workers,
supervisors, engineers, secretaries, shipping
clerks, and financial officers
Roles in the Buying Center
• Initiator begins the buying process
• User needs the product
• Gatekeeper controls the flow of information
to other members
• Influencer dispenses advice or shares
expertise
• Decider makes the final decision
• Buyer executes the purchase
The Buying Situation
• A buy class framework identifies the degree
of effort required of the firm’s personnel to
collect information and make a purchase
decision
• Straight rebuy
• Modified rebuy
• New task buying
How they buying situation affects buying center behavior
ISO 9000
International Organization for Standardization
(ISO)
Geneva , Switzerland
One standards organization per country:
• USA – ANSI
• Japan – JISC (MITI)
• Germany – DIN
• Australia – SAI
Electronic B2B Commerce
• Internet exchanges between two or more
businesses or organizations
• Allows marketers to link directly to
suppliers, factories, distributors, and their
customers
• Reduces time necessary to order and deliver
goods, track sales, and get feedback
Intranets, Extranets, and Private Exchanges
• An intranet is an internal corporate
computer network that uses Internet
technology to link company departments,
employees, and databases
• An extranet allows outsiders to the
organization to access its intranet
• A private exchange links invited groups of
suppliers and partners over the Web
Security Issues
• Authentication - making sure only authorized
individuals are allowed to access a site
• Firewalls - combination of hardware and software
that ensures only authorized individuals gain entry
• Encryption - scrambling a message so that only
another individual has the right “key” for
deciphering it
Comparing the stages in consumer and organizational purchases