Organizational Markets Overview

Organizational Markets

• Organizational markets purchase goods for production or resale.
• Categories include industrial, reseller, wholesaler, retailer, distributor, and government markets.

Industrial Markets

• Businesses buy products to create their own.
• Example: A car manufacturer buying engine parts.

Reseller Markets

• Businesses repurchase goods for resale.
• Example: A sari-sari store buying goods from a wholesaler.
• Types of resellers include wholesalers and retailers.

Wholesaler Markets

• Businesses buy products in large quantities at low prices.
• Example: A farm selling tomatoes to a grocery wholesaler.

Retailer Markets

• Businesses buy from wholesalers or distributors and sell to consumers at higher prices.
• Example: A toy store buying toys from wholesalers to resell them to consumers.

Distributor Markets

• Businesses take products from the producer and deliver them to retailers or stores.
• Example: A company shipping shoes to various stores.

Government Markets

• Government agencies purchase products for public use or services.
• Example: The National Food Authority buying palay from farmers.

Non-Profit Organizations

• Groups that support a cause without aiming for profit.
• Example: Red Cross.

Organizational Buying and Characteristics

• Organizational buyers consider demand, potential buyers, objectives, and criteria.
  • Demand: Derived from consumer demand.
  • Potential Buyers: Many business buyers exist, and buyers must consider individual and family needs.
  • Buying Objectives: Aim for short-term and long-term goals.
  • Buying Criteria: Factors like price, quality, delivery schedules, technical skills, performance guarantees, past performance, and production capacity are important.

Size of Order/Purchase

• Organizational purchases are often larger than individual consumer purchases.

Buyer-Seller Interaction

• Interactions in organizational settings differ from consumer settings.
• The buying center involves people from various departments.

Kinds of Buying Processes

• New-Task Buying: A business purchases something for the first time. Ex: A new office computer.
• Straight Rebuy: A business repurchases a product it used before.
  • Ex: A coffee shop ordering its usual coffee beans.
• Modified Rebuy: A business modifies the purchase of something it already buys.
• Ex: A company buying slightly different kinds of chairs.
• Participants in the process: Users, influencers, deciders, approvers, and buyers.

Purchase Decision-Making Process

• Recognition of the problem: Identifying a need for a product or service.
• Information search: Gathering information about products and suppliers.
• Evaluation of suppliers: Evaluating suppliers based on various factors.
• Purchase: Making the actual purchase.
• Performance evaluation: Assessing the product or service.

Factors Influencing Organizational Buyers

• Economic: Market conditions, prices, and income influence decisions.
• Personal: Buyer's personal experiences and preferences.

Market Segmentation and Targeting

• Market: The place where buyers and sellers meet.
• Buyer: Any person or business interested in buying a product/service.
• Opportunity: Where buyers and sellers meet to transact.
• Segmentation: Dividing a market into segments for targeted marketing.
• Sub-Segments: Breaking segments down further for more specific targeting.
• Example: Dividing the book market into segments based on student, teacher or genre.

Types of Markets

• Categorizations of markets by institutions, forms, and segment.
  • Constitutional Markets:
    • Consumer: Buyers for personal use.
    • Organizational: Buyers for business or institutional use.
    • Government: Buyers representing public entities.
    • International: Buyers from abroad.
  • Form (Markets):
    • Primary: First-time buyers with little knowledge of the offered product.
    • Secondary: Buyers already familiar with the product.