144 The Marketing Book
business markets and must be understood if we
are to manage the complex networks of rela-
tionships in which all companies operate.
It will become apparent through the course
of this chapter that organizational buying and
marketing is a complex process. Attempts to
oversimplify this process ultimately result in a
loss of understanding of the dynamics of the
process and its constituent elements. However,
it is worthwhile to begin with the analysis of
The realities of business markets
The realities of business markets
In trying to understand organizational buying
behaviour it is essential to clarify the essential
features that characterize the markets and
market mechanisms of business markets. For
example, we need to recognize that markets are
often characterized by customization and dyna-
mism: traditional marketing theory, with its
roots in consumer product markets, had typ-
ified marketing as a process of manipulation of
the marketing mix against predetermined con-
sumer preferences derived from market
research. The marketer is seen as the active
party whilst customers are essentially passive.
This view, however, is not even an adequate
representation of what happens in consumer
markets: the majority of manufacturers of
consumer goods, such as foodstuffs, toiletries
and clothing, sell to wholesalers and retailers –
not directly to consumers. Thus, they are
essentially operating within an organization or
business market which displays many of the
characteristics of the markets for industrial
products such as car components, financial
services etc.
Thus, a reality of marketing per seis that
suppliers face concentrated markets where
individual customers may be critically impor-
tant. These customers are not passive but
actively search out and interact with selected
suppliers, requiring customized products.
These markets are characterized by interaction,
mutual dependency and trust. Negotiation is
common and business success if often deter-
mined by the ability of individuals to manage
the supplier–customer relationships over con-
siderable periods of time. These interactions
may involve many people from different func-
tions and levels in both supplier and customer
companies. Although specific transactions (the
focus of much consumer marketing literature)
are often important, it is the overall relationship
which is critical to success. Thus, relationship
marketing becomes the ‘new’ marketing man-
agement challenge.Organizational buying structures
An organization is a group of people pursuing
a common aim through co-ordinated activities.
Organizations are characterized by structure,
activity and goals. By analysing organizational
buying in the light of these three factors, it is
possible to highlight the essential elements of
organizational buying behaviour. A major char-
acteristic of organizational buying is that it is a
group activity. It is comparatively rare that a
single individual within an organization will
have sole responsibility for making all the
decisions involved in the purchasing process,
and commonly we find a number of people
from different areas of the business and of
varying status involved. This group is usually
described as the decision-making unitorbuying
centre. Thus, a major challenge facing business
marketers and sales people is the identification
of these key individuals who constitute the
buying centre, the roles of these individuals
and the various factors that may influence its
constitution, and the major goals being
pursued.Composition of the buying centre
Much research has focused upon the size and
structure of the buying centre. Alexander et al.
(1961) found that in 75 per cent of the firms