Questions and Answers
Three vendors submitted bids to a company looking to purchase a new shelving system. The bids were submitted to the purchasing manager, but his assistant receives and distributes all of the purchasing manager's mail. Here, the assistant acts as a(n) _____ in the buying center.
gatekeeper
For important non-routine purchases, the person with formal authority to approve the supplier is the _____, often someone in a specific functional area.
decider
What is a new buy?
Has the largest buying center.
What is a modified rebuy?
Signup and view all the answers
What is a straight rebuy?
Signup and view all the answers
Which characteristics are typical in a new buy buying situation? (Select all that apply)
Signup and view all the answers
A(n) _____ occurs when an organizational buyer simply reorders additional units of products with no changes from an approved supplier.
Signup and view all the answers
What is the role of the gatekeeper in a buying center?
Signup and view all the answers
A(n) _____ occurs when an organizational buyer has purchased a similar product in the past but has decided to change something like the specifications, price, or supplier.
Signup and view all the answers
About how many online transactions are performed by organizational buyers?
Signup and view all the answers
Straight rebuys, modified rebuys, and new buys are the three types of _____ .
Signup and view all the answers
Which of the following are primary reasons for the popularity of online buying in all three kinds of organizational markets? (Select all that apply)
Signup and view all the answers
Organizational buyers are ______.
Signup and view all the answers
What are the three main types of organizational buyers?
Signup and view all the answers
What one department is almost always represented by a person in the buyer center?
Signup and view all the answers
What are the three types of buying situations or buy classes?
Signup and view all the answers
What are e-marketplaces?
Signup and view all the answers
In general, which type of online auction creates upward pressure on bid prices and which type creates downward pressure on bid prices?
Signup and view all the answers
Business-to-business marketing involves the marketing of products and services to organizations for use in the creation of goods and services that ______.
Signup and view all the answers
What are the three markets organizational buyers are divided into?
Signup and view all the answers
Which two organizational buyers could be considered part of the industrial market?
Signup and view all the answers
Business-to-business marketing fundamentally differs from consumer marketing in which way?
Signup and view all the answers
The many federal, state, and local agencies that buy goods and services for the constituents they serve are considered ______ markets.
Signup and view all the answers
Many companies today have broadened their buying objectives to include an emphasis on buying from minority- and women-owned businesses.
Signup and view all the answers
The best thing about the organizational buying process is the ease with which it can be conducted.
Signup and view all the answers
In NAICS coding, the fifth digit represents ______.
Signup and view all the answers
What is the main reason that business organizations buy products?
Signup and view all the answers
What two items are characteristic of the organizational buying process as compared to the consumer buying process?
Signup and view all the answers
Who in the buying center controls the flow of information?
Signup and view all the answers
Study Notes
Organizational Buyers
- Organizational buyers include manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies purchasing products for their own use or resale.
- They are categorized into three main types: industrial firms, resellers (wholesalers and retailers), and government units.
Types of Buying Situations
- Three distinct buying situations exist:
- New buy: First-time purchase of a product or service.
- Straight rebuy: Reordering from an approved list of suppliers without changes.
- Modified rebuy: Changes made to specifications, pricing, or suppliers.
E-Marketplaces and Auctions
- E-marketplaces, also known as B2B exchanges or e-hubs, facilitate real-time exchanges between buyers and suppliers.
- In traditional auctions, bidding generally causes price increases; in reverse auctions, buyers invite suppliers to compete, leading to price decreases.
Business-to-Business Marketing
- This marketing strategy focuses on promoting goods and services to organizations, highlighting their utility in the creation of products for resale.
Derived Demand
- Demand for industrial products is derived from consumer demand; for instance, an increase in consumer purchases leads to higher industrial demands.
NAICS (North American Industry Classification System)
- NAICS provides standardized industry definitions across Canada, Mexico, and the United States, using a six-digit coding system.
Buying Center and Roles
- A buying center comprises individuals participating in purchasing decisions, including roles such as:
- User: Actual product user.
- Buyer: The person formally selecting suppliers.
- Influencer: Affects decisions by defining specifications.
- Gatekeeper: Controls information flow within the process.
- Decider: Authoritative figure approving selections.
Characteristics of Organizational Buying
- Organizational purchases typically involve larger order sizes and may include more complex negotiations compared to consumer purchases.
- Decision-making in organizational buying is substantially influenced by multiple individuals, especially in significant transactions.
Organizational Buying Behavior
- The process includes recognizing product needs, evaluating alternatives, and making purchase decisions, heavily influenced by defined organizational buying criteria (e.g., price, quality, delivery).
Recent Trends in Organizational Buying
- Increasing emphasis on inclusive procurement from minority- and women-owned businesses.
- Adoption of sustainable practices into purchasing objectives is becoming common.
Supplier Development
- This refers to efforts by buyers to cultivate relationships with suppliers, enhancing their product capabilities to better align with buyer needs.
Reciprocity in Business
- This practice involves organizations agreeing to buy from one another, fostering mutual benefit and partnership dynamics.
The Purchase Decision Process
- Steps in this process include recognizing needs, gathering information, evaluating options, and making contract awards.
- Important aspects can include informal evaluations and competitive bidding, particularly for substantial financial commitments.
Evaluation Factors
- Key attributes used by industrial buyers to assess suppliers include price, past performance, ability to meet delivery schedules, and warranties.
Characteristics of Different Buying Situations
- New buys engage the largest buying centers with intensive decision time, while straight rebuys involve speedy, uncomplicated procurement processes. Modified rebuys strike a middle ground requiring adjustment and slightly more deliberation.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on organizational buyers with these flashcards. This quiz covers definitions and types of organizational buyers, including manufacturers, wholesalers, and service companies. Perfect for understanding key concepts in business purchasing.
