Notes 121
EXECUTIVE SUMMARY
Organizational buying is the decision-making process by which formal organizations
establish the need for purchased products and services, and then identify, evaluate,
and choose among alternative brands and suppliers. The business market consists of
all of the organizations that acquire goods and services used in the production of
other products or services that are sold, rented, or supplied to others: profit-seeking
companies, institutions, and government agencies.
Compared to consumer markets, business markets generally have fewer and
larger buyers, a closer customer-supplier relationship, and more geographically con-
centrated buyers. Demand in the business market is derived from demand in the con-
sumer market and fluctuates with the business cycle. Nonetheless, the total demand
for many business goods and services is quite price-inelastic. Business marketers need
to be aware of the role of professional purchasers and their influencers, the need for
multiple sales calls, and the importance of direct purchasing, reciprocity, and leasing.
Three types of buying situations are the straight rebuy, the modified rebuy, and
the new task. Systems buying is a practice in which the buyer wants to purchase a total
solution to its problem from one seller. The buying center is the decision-making unit
of a buying organization. It consists of initiators, users, influencers, deciders,
approvers, buyers, and gatekeepers.
To influence the buying center, marketers must be aware of environmental, orga-
nizational, interpersonal, individual, and cultural factors. The buying process consists
of eight stages called buyphases: (1) problem recognition, (2) general need descrip-
tion, (3) product specification, (4) supplier search, (5) proposal solicitation, (6) sup-
plier selection, (7) order-routine specification, and (8) performance review.
Successful marketers anticipate and provide what buyers are seeking in each
buyphase, increasing the chances that they will be selected and, ultimately, build a
long-term relationship with their customers.
NOTES
- Frederick E. Webster Jr. and Yoram Wind, Organizational Buying Behavior(Upper Saddle
River, NJ: Prentice-Hall, 1972), p. 2. - Robert Hiebeler, Thomas B. Kelly, and Charles Ketteman, Best Practices: Building Your
Business with Customer-focused Solutions(New York: Arthur Andersen/Simon & Schuster,
1998), pp. 122–24. - Hiebeler, Kelly, and Ketteman, Best Practices,pp. 124–26.
- Laura M. Litvan, “Selling to Uncle Sam: New, Easier Rules,”Nation’s Business,March 1995,
pp. 46–48; Ellen Messmer, “Feds Do E-Commerce the Hard Way,”Network World,April 13,
1998, pp. 31–32; Anna Muoio, “Fast Agency, Slow Government,”Fast Company,December
1999, pp. 344, 346, 348. - Patrick J. Robinson, Charles W. Faris, and Yoram Wind, Industrial Buying and Creative
Marketing(Boston: Allyn & Bacon, 1967). - See Daniel H. McQuiston, “Novelty, Complexity, and Importance as Causal Determinants
of Industrial Buyer Behavior,”Journal of Marketing,April 1989, pp. 66–79; and Peter Doyle,
Arch G. Woodside, and Paul Mitchell, “Organizational Buying in New Task and Rebuy
Situations,”Industrial Marketing Management,February 1979, pp. 7–11. - Urban B. Ozanne and Gilbert A. Churchill, Jr., “Five Dimensions of the Industrial
Adoption Process,”Journal of Marketing Research,August 1971, pp. 322–28.