Chapter 7 Summary

In the last chapter, consumer buying behavior was presented. Organizations also have their own buying behavior. In a typical organizational buying market there are normally few buyers, their purchases are large, rationalization not emotions is the normal decision criterion, there is a strong interdependence between the buyer and seller, and a large number of people are involved in the purchase decision. These characteristics in most situations are opposite from consumer buying behavior characteristics.

There are four broad categories of organizational buyers, i.e., producers, intermediaries, governments, and other institutions. Producers buy goods and services from other firms to produce their own goods and services. Intermediaries buy goods and services and then resell them at a profit. Governments are huge organizational buyers. Other institutions can include hospitals, religious groups, political parties, and any other group not falling into one of the first three categories.

To understand why and how organizations buy products and services, it is necessary to analyze the major forces influencing organizational markets. These forces include demand (derived demand and the acceleration principle), competition, and technology, which includes process and product technology.

Just as consumers follow a buying process, so do organizations and it is referred to as the organization buying process. Within this process organizations must understand what types of purchases are involved (straight rebuy, modified rebuy, and new task purchase). They must also consider the criteria involved in the buying decision which include economic, quality, and service criteria.

As in the consumer buying process, organizations find that the exchange process is a collaborative effort involving many people and contacts. In essence, the people that a organization interact with should be problem solvers in meeting the buyers' needs. In some cases, the buying organization establishes a buying team sometimes referred to as purchasing agents. In other situations, marketers may serve organizations through buying centers. Buying centers are groups of people who communicate with one another regarding the purchase. These buying centers fill six roles in the buying process including being initiators, users, influencers, buyers, deciders, and gatekeepers.