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Marketing Management, 4/e
Harper W Boyd
Orville C Walker, Jr
John W Mullins
Jean-Claude Larreche
Understanding Organizational Markets and Buying Behavior Provides the Foundation for Marketing Decisions

Chapter Overview

  • While organizational customers are different in some ways from consumers, marketers need to answer a similar set of questions to develop a solid foundation for their marketing plans. Who are our target customers? What are their needs, wants, and preferences? How do those customers decide what to buy and what suppliers to buy from?
  • Organizations buy things for one of three reasons:
    1. to facilitate the production of another product or service,
    2. for use by the organization’s employees in carrying out its operations, or
    3. for resale to other customers.
  • Organizations are social constructions. Therefore, "organizations" do not buy things. Rather, individual employees—usually more than one from different departments and organizational levels—make purchase decisions on the organization’s behalf. Understanding the personal motivations of these individuals, and their influence on different stages of the purchasing process, is essential for marketing success.
  • The Internet is simultaneously encouraging two opposing trends in organizational purchasing:
    1. the growing use of short-term spot market contracts via Web-based auctions and
    2. the strengthening of long-term buyer–supplier relationships via the sharing of sales and inventory data and the development of supply chain alliances.
  • The mutual interdependence of organizational buyers and their suppliers makes long-term cooperative relationships crucial for customer retention and marketing success. For firms that sell a significant portion of their output to a few large customers, the stakes are very high. Building trust and commitment at multiple levels in both firms—on an individual-to-individual basis—can be a key factor in establishing and maintaining long-term customer relationships that are profitable to both parties.







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