Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

7. Business and
   Organizational Customers
   and Their Buying Behavior

Text © The McGraw−Hill

Companies, 2002

212 Chapter 7

suppliers should focus on the government units they want to cater to and learn

the bidding methods of those units. Then it’s easier to stay informed since most

government contracts are advertised. Target marketing can make a big contribu-

tion here—making sure the marketing mixes are well matched with the different

bidding procedures.

A marketer can learn a lot about potential government target markets from various

government publications and by using the Internet. For example, there is an online

government contractors’ resource center at http://www.govcon.com. It includes a link to

the online version of the U.S. federal government’s Commerce Business Daily,

which lists most current purchase bid requests. The Small Business Administration

(www.sba.gov) offers many resources, including the U.S. Purchasing, Specifications,

and Sales Directory.It explains government procedures to encourage competition for

such business. Various state and local governments also offer guidance, as do gov-

ernment units in many other countries.

Trade magazines and trade associations provide information on how to reach

schools, hospitals, highway departments, park departments, and so on. These are

unique target markets and must be treated as such when developing marketing

strategies.

Selling to government units in foreign countries can be a real challenge. In many

cases, a firm must get permission from the government in its own country to sell to

a foreign government. Moreover, most government contracts favor domestic sup-

pliers if they are available. Even if such favoritism is not explicit, public sentiment

may make it very difficult for a foreign competitor to get a contract. Or the gov-

ernment bureaucracy may simply bury a foreign supplier in so much red tape that

there’s no way to win.

In some countries, government officials expect small payments (grease money)

just to speed up processing of routine paperwork, inspections, or decisions from

the local bureaucracy. Outright influence peddling—where government officials

or their friends request bribe money to sway a purchase decision—is common in

some markets. In the past, marketers from some countries have looked at such

bribes as a cost of doing business. However, the Foreign Corrupt Practices Act,

passed by the U.S. Congress in 1977, prohibits U.S. firms from paying bribes to

foreign officials. A person who pays bribes, or authorizes an agent to pay them,

can face stiff penalties. However, the law was amended in 1988 to allow small

grease money payments if they are customary in a local culture. Further, a man-

ager isn’t held responsible if an agent in the foreign country secretly pays bribes.

An ethical dilemma may arise if a marketing manager thinksthat money paid to

a foreign agent might be used, in part, to bribe a government official. However,

most U.S. businesses have learned to live with this law—and in general they

comply with its intent.^28

Is it unethical to “buy
help”?

Conclusion

In this chapter, we considered the number, size, loca-
tion, and buying behavior of various types of
organizational customers—to try to identify logical di-
mensions for segmenting markets and developing
marketing mixes. We looked at who makes and influ-
ences organizational buying decisions, and how multiple
influence may make the marketing job more difficult.

We also saw that the nature of the buyer and the buying

situation are relevant and that the problem-solving

models of buyer behavior introduced in Chapter 6 apply

here, with modifications.

Buying behavior—and marketing opportunities—

may change when there’s a close relationship between a

supplier and a customer. However, close relationships

Dealing with foreign
governments