Objectives:

1. What is the business market, and how does it differ from the
consumer market?
2. What buying situations do organizational buyers face?
3. Who participates in the business-to-business buying process?
4. How do business buyers make their decisions?
5. How can companies build strong relationships with business
customers?
6. How is B2B relationship marketing conducted in the Japanese
keiretsu and the Korean chaebol?
7. How do institutional buyers and government agencies do their
buying?
- The decision making process by which formal
organizations establish the need for purchased
products and services and identify, evaluate,
and choose among alternative brands and
suppliers
 Fewer, larger buyers
 Close supplier-customer relationship
 Professional purchasing
 Several buying influences
 Multiple sales calls
 Derived demand
 Inelastic demand
 Fluctuating demand
 Geographical concentrated buyers
 Straight rebuy – reordering in a routine basis
 Modified rebuy – modify product
specifications, prices, delivery requirements
and other terms.
 New task – buying for the first time.
1. The buying centers
 Initiators
 Users
 Influencers
 Deciders
 Approvers
 Buyers
 gatekeepers
2. Buying center influences
3. Buying center targeting
3 company purchasing orientations:
1. buying orientation – short term and tactical
(ability to obtain the lowest price for a given
level of quality and availability)
2. procurement orientation – buyers seek
quality improvements and cost reduction.
3. supply chain management orientation –
buyers become more strategic, value-adding
operations ( e.g. JOT delivery, etc.)
1. Routine products – low value and cost, therefore
customer seek for the lowest price
2. Leverage products – high value and cost, therefore
high risk (suppliers will minimize customer’s total
cost)
3. Strategic products – high value, cost and risk to
customers , hence customers want a well-known
supplier and is willing to pay a higher price
4. Bottleneck products – low value, cost but involves risk
– wants a supplier who can guarantee a steady supply
of reliable products (e.g. spare parts)
1. Problem recognition’
2. General need description and product
specification
3. Supplier search
4. E-procurement
5. Proposal solicitation
6. Supplier selection
7. Order routine specification
8. Performance review
Benefits of Vertical Coordination (Cannon and Perreault on buyer-
supplier relationships differed according to the ff factors:
1. Basic buying and selling – high level of cooperation and information
exchange.
2. Bare bones – more seller adaptation but less cooperation and
information exchange
3. Contractual transaction – defined by formal contract
4. Cooperative systems – not by contract nor structural
5. Collaborative – trust and commitment leads to partnership
6. Manually adaptive – relationship built but not much trust and
cooperation
7. Customer is king – cooperative relationship, seller adapts to meet
needs of customer with no expectations.
 Japanese’s Production Keiretsu – characterized
by vertical integration of manufacturers and
their suppliers (buy group products model),
resulting to building strong interdependence
and social ties and eventually, mutual trust.
 Korean’s Chaebol – family-owned and smaller
and more tightly integrated than the Keiretsu.