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MCS 1000 (215)
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Chapter ch.6

MCS 1000 Chapter ch.6: Chapter 6

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Marketing and Consumer Studies
MCS 1000
Sergio Meza

Chapter 6: Organizational Markets and Buyer Behaviour Business marketing: The marketing of goods and services to companies, governments, and not- for-profit organizations for use in the creation of goods and services that they can produce and market to others Organizational buyers: Those manufacture, wholesalers, retailers and government agencies that buy goods and services for their own use or for resale Organizational buyers are divided into 3 markets 1. Industrial 2. Reseller 3. Governmental markets Industrial firms: Organizational buyers that, in some way, reprocess a good or service they buy before selling it again to thee next buyer Reseller market: Wholesalers or retailers that buy physical products and sell them again without any processing Government units: The federal, provincial and local agencies that buy goods and services for the constituents they service Organizational buying behaviour: The decision making process that organizations use to establish the need for products and services, and to identify, evaluate, and choose among alternative brands and suppliers ‘ Key characteristics of organizational buying behaviour 1. Demand Characteristics: Consumer demand for products and services is affected by their price and availability and by consumers’ personal tastes and discretionary income Derived demand: Demand for business products and services is driven by, or derived from, demand doe consumer products and services 2. Size of the order purchase -The size of the purchase involved in organizational buying is larger than consumer buying 3.Number of potential buyers 4. Organizational Buying objectives -Organizations buy products and services of one main reason: to help them achieve their objectives 5. Organizational buying criteria: The objectives of the suppliers products and services and the capabilities of the supplier itself ISO 9000 Standards: Registration and certification of a manufacturer’s quality management and quality assurance system Supplier development: The deliberate effort by organizational buyers to build relationships that shape suppliers products, services and capabilities to fit a buyers needs and those of its customers Buyer Seller Relationship and Supply Partnerships - Another distinction between organizational and consumer buying behaviour lies in the nature of the relationship between organizational buyers and suppliers - Reciprocal arrangements also exist in organizational buying - Reciprocity: An industrial buying practice in which two organizations agree to purchase each others products and services - Buyer seller relationships also can develop into supply partnerships - Supply partnership: A relationship that exists when a buyer and its supplier adopt mutually beneficial objectives, polices and procedures for the purpose of lowering cost and or increasing the value of products and services delivered to the ultimate consumers Buying centre: The group of people in an organization who participate in the buying proc
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