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Business vs. ConsumerBusiness vs. Consumer

MarketsMarketsBusiness vs. ConsumerBusiness vs. Consumer

MarketsMarkets

Fewer buyersFewer buyers Larger buyersLarger buyersClose supplier-customer relationshipClose supplier-customer relationshipGeographically concentratedGeographically concentratedDerived demandDerived demand Inelastic demandInelastic demand Fluctuating demandFluctuating demand

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Business vs. ConsumerBusiness vs. Consumer

MarketsMarketsBusiness vs. ConsumerBusiness vs. Consumer

MarketsMarkets

Professional purchasingProfessional purchasingSeveral buying influencesSeveral buying influencesMultiple sales callsMultiple sales callsDirect purchasingDirect purchasingReciprocityReciprocity LeasingLeasing

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Industrial customers

Commercial organizationsNon commercial

organizations

Publicsector

enterprises

Processing enterprises, Ind/consumer goods reseller,service

enterprises

Large , medium, small & tiny units

Privatesector

enterprises

Co-operative

enterprises

Joint

ventures

Government

organizationsCooperatives

Voluntary

organizations

Industrial Marketing

Public

Sector

Pvt.

Sector

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I

nvolvedD e

cisi o

nMaking

I

nvolvedD e

cisi o

nMaking

Modified RebuyModified Rebuy

Modified RebuyModified Rebuy

New Task BuyingNew Task Buying

New Task BuyingNew Task Buying

Straight RebuyStraight Rebuy

Straight RebuyStraight Rebuy

Utilities

Office Supplies

Bulk chemicals

New vehicles

Elec. EquipConsultants

Computer equip.

Custom furniture

Installed components

Buildings

Weapon systems

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Types of Industrial Buying

Types of Industrial Buying

New

Task

New

Task

A buying situation that has not been previously

faced by the organization.Significantly steep learning curve, organization

seeks many sources of information.

Modified

Rebuy

Modified

Rebuy

Straight

Rebuy

Straight

Rebuy

A routine buying situation with established solutions.Abbreviated steps in the process, fewer people in

the buying center, less time to completion.

A buying situation that is somewhat similar to past

problems/solutionsExamines alternatives within a limited scope,

involves fewer people than a new task situation

and more than a straight rebuy.

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Participants in the BusinessParticipants in the Business

Buying ProcessBuying ProcessParticipants in the BusinessParticipants in the Business

Buying ProcessBuying Process

Gatekeepers

Initiators

Buyers

Influencers

Deciders

Users

Approvers

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Problem RecognitionProblem Recognition

General Need DescriptionGeneral Need Description

Product SpecificationProduct Specification

Supplier SearchSupplier Search

Proposal SolicitationProposal Solicitation

Supplier SelectionSupplier Selection

Order Routine SpecificationOrder Routine Specification

Performance ReviewPerformance ReviewPostPost

PurchasePurchase

PurchasePurchase

InfoInfo

Search/Search/

EvalEval

NeedNeed

RecognitionRecognition

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Stage 1: Anticipate a Problem/Need/Opportunity and aGeneral Solution

Example: Need to provide employees with a good cup of coffee to

enhance productivity.

Stage 2: Determine the Characteristics and Quantity of aNeeded Good or Service

Example: Offering a coffee system that brews one cup of coffee at atime according to each employees preference.

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Stage 3: Describe Characteristics and the Quantity of aNeeded Good or Service

Example: Firms need a simple system for brewing a

good cup of coffee; quantity requirements are easilycorrelated to the number of coffee drinkers.

Stage 4: Search for and Qualify Potential Sources

Choice of supplier may be fairly straightforward or very

complex.Stage 5: Acquire and Analyze Proposals

May involve competitive bidding, especially if thebuyer is the government or a public agency.

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Stage 6: Evaluate Proposals and Select Suppliers

Buyers choose proposal best suited to their needs.

Final choice may involve trade-offs between featuresuch as price, reliability, quality, and order accuracy.

Stage 7: Select an Order Routine

Buyer and vendor work out best way to process future purchases.

Stage 8: Obtain Feedback and Evaluate Performance

Buyers measure vendors performance.

Larger firms are more likely to use formal evaluation procedures.

Some firms rely on outside organizations to gather quality feedback

and summarize results.