Chapter 6 Organization Markets & Organizational Buying Behavior
Objectives of this session
The concept of organizational buying
Difference between consumer markets and organizational markets
Organizational markets in India
Organizational buying behavior
Organizational buying is entirely different from that of consumer buying
It involves a through & deep analysis
Organizations purchase products ranging from high complex machinery, small components, bought on regular basis & those
Differences between organizational & consumer markets
Consumers market Less time spent on purchasing process
Organizational Market
More time spent in purchasing process
Large number of consumers buyer
Organizational buyers are few in number
Quantity of purchase is comparatively low
Quantity of purchase is more
Segmentation on Segmentation on Purchasing approach, geographic, situational factors, demographic and psychographic factors personal characteristics
Organizational buying situation
New task
Straight rebuy
Modified rebuy
System buying: a process in which an organization selects only one supplier for all its raw material requirements
System selling: a process in which a seller himself sells all the raw materials needed by a customer
Organizational markets in India
Industrial markets in India can be divided into three sectors
Chemical and pharmaceutical companies Energy and natural resources Industrial and automotive sector
Chemical and Pharmaceutical Products are produced in bulk quantities & are conventionally sold to organizational customers Opportunity for growth in specialty chemicals segments i.e. chemicals Pharmaceutical companies are set to have a very high growth rate with most global companies making strategic moves such as mergers or acquisitions.
Energy and natural resources
Due to population growth and increasing urbanization natural resources are depleted
Dependence upon conventional sources for energy
Search for alternative source for energy
Further sub segments: oil& gas, coal & lignite, forests & timber, precious metals
Industrial and automotive
Success of companies directly linked to financial & economical status of the country
Over the years has changed into highly competitive industry
Large number of competitors infrastructure)
Sub segments: cars two/three wheelers, heavy vehicles, electrical, electronics,
(related to
Participants In Organizational Buying
Initiators Influencers Users Deciders Approvers Buyers Gatekeepers
Stages Of Buying
Problem Recognition General Need Recognition Product Specification Searching for potential Suppliers Value Analysis Vendor Analysis Order-Routine Specification Multiple Sourcing Performance Review