Principles of Marketing 15th Edition Kotler Solutions Manual

Principles of Marketing 15th Edition
Kotler Solutions Manual

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Chapter 6
BUSINESS MARKETS AND
BUSINESS BUYER BEHAVIOR
MARKETING STARTER: CHAPTER 6
GE: Partnering Strategically with Business Customers
Synopsis
Few brands are more familiar than GE. For more than 130 years, we’ve packed our homes with GE products bearing
the familiar script GE logo. Surprisingly, GE’s consumer products contribute only about one-third of the company’s
total $147 billion in annual sales. Most of GE’s business comes from commercial and industrial customers across a
wide range of industries. GE sells everything from medical imaging technologies and water processing systems to
power generation equipment and aircraft engines. Marketing to business customers requires a deep understanding of
customer needs and customer-driven marketing strategies that create superior customer value. In its business
markets, rather than selling to large numbers of small buyers, GE sells to a relative few very large buyers. Losing a
single sale to a large business customer can mean the loss of hundreds of millions of dollars in revenues. Also, with
GE’s business customers, buying decisions are much more complex. People throughout the entire GE organization
know that success in business-to-business markets involves more than just developing and selling superior products
and technologies. Business customer buying decisions are made within the framework of a strategic, problem-
solving partnership.
Discussion Objective
The GE story is perfect for highlighting the unique characteristics of business markets and the differences between
consumer buying behavior and business buying behavior. It also demonstrates that marketing to business customers
requires a deep understanding of customer needs and customer-driven marketing strategies that create superior
customer value. To succeed in its business-to-business markets, GE must build day in, day out, year in, and year out
customer partnerships based on superior products, close collaboration, and trust.
Starting the Discussion

Set up the discussion by visiting the GE Capital Rail Services Web site at http://www.ge.com/railservices/services/
Explore the various links at the top, including products, services, industries, and resources. Look for information on
each that underscores the basic promise that GE must deliver on each day: to create partnerships with business
customers to help them move their passengers and freight more efficiently and reliably. With students, discuss the
similarities and differences between selling to final consumers and selling to business customers. Students should
understand that working in business markets is exponentially more complex, and that closing a single may take
years of advance work. Use the questions below to guide the discussion on Boeing’s efforts to sell the 787 to B-to-B
customers and the impact on customer relationships.
Discussion Questions
1. What are GE’s business customers looking for when buying a new locomotive? How do GE products 787
fill the bill? (Customers are certainly looking at the characteristics of the locomotive itself [cost, reliability,
fuel efficiency,] and how the locomotive will enable them to deliver better value to their own customers.
But more than just a superior product, they want a trusted partner that delivers on its promises. Business
customers must be able to rely on GE as a strategic partner they can count on to help the company solve its
problems and win new customers of its own. As this case demonstrates, purchasing issues can even involve
international economics and politics.)
2. How does GE’s marketing and sales to business customers differs from working with its end consumers.
(Selling and marketing in either sector requires a deep understanding of customer needs and customer-
driven marketing strategies that create superior customer value. However, in business markets, rather than
selling to large numbers of small buyers, GE sells to a relative few very large buyers. Losing a single sale
to a large business customer can mean the loss of hundreds of millions of dollars in revenues. Also, with
Copyright© 2014 Pearson Education

GE’s business customers, buying decisions are much more complex. Buying a batch of jet engines, for
example, involves a tortuously long buying process, dozens or even hundreds of decision makers, and layer
upon layer of subtle and not-so-subtle buying influences. To succeed in these business-to-business markets,
GE must do more than just design and distribute good products. It must work closely and deeply with its
business customers to become a strategic, problem-solving partner.)
3. How does the GE story relate to the major concepts of Chapter 6 on business buyer behavior? (The GE
story shows the complexities of business-to-business transactions and relationships relative to final
consumer buying. It provides an excellent vehicle for exploring the nature of business markets, types of
buying situations, buying participants and influences on business buyers, and the business buying process.)
CHAPTER OVERVIEW
Use Power Point Slide 6-1 Here
This chapter examines business customers—those that buy goods and services for use in
producing their own products and services or for resale to others. As with firms selling to final
buyers, firms marketing to business customers must build profitable relationships with business
customers by creating superior customer value.
CHAPTER OBJECTIVES
Use Power Point Slide 6-2 Here
1. Define the business market and explain how business markets differ from consumer markets.
2. Identify the major factors that influence business buyer behavior.
3. List and define the steps in the business buying decision process.
4. Compare the institutional and government markets and explain how institutional and
government buyers make their buying decisions.
CHAPTER OUTLINE
p. 164 INTRODUCTION
Considering our familiarity with GE’s consumer products, it

is somewhat surprising that they contribute only about one- p. 165
third of the company’s total $147 billion in annual sales. Photo: Boeing
Most of GE’s business comes from commercial and
industrial customers across a wide range of industries. GE
sells everything from medical imaging technologies and
water processing systems to power generation equipment and
aircraft engines.
In its business markets, rather than selling to large numbers
of small buyers, GE sells to a relative few very large buyers.
Buying decisions are much more complex.
People throughout the entire GE organization know that

success in business-to-business markets involves more than
just developing and selling superior products and
technologies.
Business customer buying decisions are made within the
framework of strategic, problem-solving partnerships.
➢ Opening Vignette Questions

1. Discuss several ways in which marketing to
business customers is different from marketing to
final consumers.
2. As a sales representative for GE, how would you
describe the advantages of working with your
company to a potential locomotive customer?
3. As the president of KTZ, which considerations
would be most important to you in selecting a
locomotive vendor? Explain.
PPT 6-3 Business buyer behavior refers to the buying behavior of

the organizations that buy goods and services for use in the
production of other products and services that are sold,
rented, or supplied to others. It also includes the behavior of p. 166
retailing and wholesaling firms that acquire goods for the Key Terms:
purpose of reselling or renting them to others at a profit. Business Buyer
Behavior, Business
In the business buying process, business buyers determine Buying Process
which products and services their organizations need to
purchase, and then find, evaluate, and choose among
alternative suppliers and brands.
Business-to-business (B-to-B) marketers must do their best to

understand business markets and business buyer behavior.
➢ Assignments, Resources
Use Discussing the Concepts 1 here
Use Think-Pair-Share 1 here
Use Web Resource 1 here
Business Markets
p. 166 Chapter Objective 1
The business market is huge. In fact, business markets
PPT 6-4 involve far more dollars and items than do consumer
markets. p. 167
Table 6.1:
The main differences between consumer and business Characteristics of
markets are in market structure and demand, the nature of Business Markets

the buying unit, and the types of decisions and the decision
process involved. (See Table 6.1)
Market Structure and Demand

p. 167
The business marketer normally deals with far fewer but far
PPT 6-5 larger buyers than the consumer marketer does.
Even in large business markets, a few buyers often account

for most of the purchasing.
Business demand is derived demand. It ultimately derives p. 167

from the demand for consumer goods. B-to-B marketers Key Term: Derived
sometimes promote their products directly to final consumers Demand
to increase business demand.
Many business markets have inelastic demand; that is, total

demand for many business products is not affected much by
price changes, especially in the short run.
Business markets have more fluctuating demand. The

demand for many business goods and services tends to
change more—and more quickly—than the demand for
consumer goods and services does.
Nature of the Buying Unit

p. 168 p. 168
Compared with consumer purchases, a business purchase Ad: Gore-Tex
PPT 6-5 usually involves more decision participants and a more
professional purchasing effort.
Often, business buying is done by trained purchasing agents

who spend their working lives learning how to buy better.
The more complex the purchase, the more likely that several
people will participate in the decision-making process.
p. 168
Types of Decisions and the Decision Process
Business buyers usually face more complex buying decisions

than do consumer buyers. Purchases often involve large
sums of money, complex technical and economic
considerations, and interactions among many people at many
levels of the buyer’s organization.
The business buying process also tends to be longer and

more formalized than the consumer buying process.
In the business buying process, buyer and seller are often

much more dependent on each other. p. 169
PPT 6-6 Photo: Dow Plastics
Many customer companies are now practicing supplier
development, systematically developing networks of p. 170
supplier-partners to ensure an appropriate and dependable Key Term: Supplier
supply of products and materials that they will use in making Development
their own products or reselling to others.
p. 170
Ad: IKEA
Use Real Marketing 6.1 here
Use Applying the Concepts 1 here
Use Video Case here
Use Outside Example 1 and 2 here
➢ Troubleshooting Tip
The first major barrier to learning in this chapter
comes from the fact that most students have had no
experience with the business market or its buying
processes. To aid in the student’s understanding, it is
necessary to first carefully explain exactly what the
business market is (see Key Terms) and how it is
different from the consumer market. The text
provides ample material with which to accomplish
this objective. To aid the students further, however,
try taking the material in Table 6.1 and asking the
students to demonstrate (using a computer company,
a fast-food business, an office supply store, and a
university or college) the differences between the
consumer and business markets. This technique
works very well to reinforce the differences.
p. 170 Business Buyer Behavior Chapter Objective 2
PPT 6-7 At the most basic level, marketers want to know how p. 171
business buyers will respond to various marketing stimuli. Figure 6.1: A Model
of Business Buyer
Within the organization, buying activity consists of two Behavior
major parts: the buying center and the buying decision
process.
p. 171 Major Types of Buying Situations

There are three major types of buying situations:
p. 171
PPT 6-8 In a straight rebuy, the buyer reorders something without Key Terms: Straight
any modifications. It is usually handled on a routine basis by Rebuy, Modified
the purchasing department. Rebuy, New Task,
Systems Selling
In a modified rebuy, the buyer wants to modify the product (Solutions Selling)
specifications, prices, terms, or suppliers. The modified
rebuy usually involves more decision participants than does
the straight rebuy.
A company buying a product or service for the first time

faces a new task situation. In such cases, the greater the cost
or risk, the larger the number of decision participants and the
greater their efforts to collect information will be.
Many business buyers prefer to buy a complete solution to a p. 172

problem from a single seller. Instead of buying and putting Ad: UPS/Nikon
all the components together, the buyer may ask sellers to
supply the components and assemble the package or system.
PPT 6-9 Thus, systems selling is often a key business marketing
strategy for winning and holding accounts.
p. 172 Participants in the Business Buying Process
PPT 6-10 The decision-making unit of a buying organization is called p. 172

its buying center: all the individuals and units that Key Terms: Buying
participate in the business decision-making process. Center, Users,
Influencers, Buyers,
PPT 6-12 The buying center includes all members of the organization Deciders,
who play any of five roles in the purchase decision process. Gatekeepers
• Users are members of the organization who will use

the product or service.
• Influencers often help define specifications and also
provide information for evaluating alternatives.
• Buyers have formal authority to select the supplier
and arrange terms of purchase.
• Deciders have formal or informal power to select or
approve the final suppliers.

• Gatekeepers control the flow of information to
others.
The buying center is not a fixed and formally identified unit

within the buying organization. It is a set of buying roles
assumed by different people for different purchases.
Within the organization, the size and makeup of the buying

center will vary for different products and for different
buying situations.
The buying center concept presents a major marketing

challenge. The business marketer must learn who p. 173
participates in the decision, each participant’s relative Photo: Cardinal
influence, and what evaluation criteria each decision Health
participant uses.
The buying center usually includes some obvious

participants who are involved formally in the buying process.
It may also involve less obvious, informal participants, some
of whom may actually make or strongly affect the buying
decision. Sometimes, even the people in the buying center
are not aware of all the buying participants.
Major Influencers on Business Buyers

p. 173
Business buyers are subject to many influences when they Ad: Peterbilt
make their buying decisions. Business buyers respond to
both economic and personal factors. They react to both
reason and emotion.
When suppliers’ offers are very similar, business buyers

have little basis for strictly rational choice. Because they can
meet organizational goals with any supplier, buyers can
p. 173 allow personal factors to play a larger role in their decisions.
PPT 6-13 p. 174
When competing products differ greatly, business buyers are Figure 6.2: Major
more accountable for their choice and tend to pay more Influences on
attention to economic factors. Business Buyer
Behavior
Business buyers are heavily influenced by factors in the
current and expected economic environment, such as the
level of primary demand, the economic outlook, and the cost
of money.

An increasingly important environmental factor is supply of
key materials. Many companies are now more willing to buy
and hold larger inventories of scarce materials to ensure
adequate supply. Business buyers also are affected by
technological, political, and competitive developments in the
environment.
Culture and customs can strongly influence business buyer

reactions to the marketer’s behavior and strategies,
especially in the international marketing environment.
Organizational factors are also important. Each buying

organization has its own objectives, policies, procedures,
structure, and systems, and the business marketer must
understand those factors as well.
The buying center usually includes many participants who

influence each other; so interpersonal factors also influence
the business buying process. It is often difficult to assess
PPT 6-15 such interpersonal factors and group dynamics.
Each participant in the business buying-decision process

brings in personal motives, perceptions, and preferences.
These individual factors are affected by personal
characteristics such as age, income, education, professional
identification, personality, and attitudes toward risk.
p. 174
Figure 6.2
Major Influences on
Business Buyer
Behavior
PPT 6-16
Use Real Marketing 6.2 here
Use Discussing the Concepts 3and 4 here
Use Additional Projects 1 and 2 here
Use Small Group Assignment 1 here
Use Individual Assignment 1 here
One area of concern deals with students under-
standing a buying center. The easiest way to
overcome this is by asking the students to form their
own buying center. Who at the university or college
would be involved in buying computers for the

computer lab, athletic equipment for the gym,
textbooks for the class, and shrubs for the campus?
Be sure to explain that it is not always the most
obvious people that might be involved in the process.
How many committees (people) did they come up
with? After one illustration, students usually catch on
to how the process works. Finish the discussion by
asking how the marketing person in a supplier
organization should use or gain knowledge about the
buying center process of a future sales client (use the
examples above if necessary to make a connection).
p. 176 The Business Buying Process Chapter Objective 3
PPT 6-17 Buyers who face a new task buying situation usually go
through all stages of the buying process. Buyers making
modified or straight rebuys may skip some of the stages.
Problem Recognition
PPT 6-18 Problem recognition can result from internal or external p. 176
stimuli. Internally, the company may decide to launch a new Key Terms:
product that requires new production equipment and Problem
materials. Externally, the buyer may get some new ideas at a Recognition,
trade show, see an ad, or receive a call from a salesperson General Need
who offers a better product or a lower price. Description
General Need Description p. 176

Figure 6.3: Stages
PPT 6-19 The buyer next prepares a general need description that of the Business
describes the characteristics and quantity of the needed item. Buying Process
For standard items, this process presents few problems. For p. 177
complex items, however, the buyer may have to work with Ad: Makino
others—engineers, users, and consultants—to define the
item. p. 177
Key Terms:
Product Specification Problem
Specification,
The buying organization next develops the item’s technical Supplier Search,
product specifications, often with the help of a value Proposal
analysis engineering team. Solicitation,
Supplier Selection
Product value analysis is an approach to cost reduction in
which components are studied carefully to determine if they
can be redesigned, standardized, or made by less costly

methods of production.
The team decides on the best product characteristics and

specifies them accordingly.
Supplier Search
PPT 6-20 The buyer now conducts a supplier search to find the best
vendors. The buyer can compile a small list of qualified
suppliers by reviewing trade directories, doing a computer
search, or phoning other companies for recommendations.
Today, more and more companies are turning to the Internet

to find suppliers.
The newer the buying task, the more complex and costly the
item, and the greater the amount of time the buyer will spend
searching for suppliers.
Proposal Solicitation
In the proposal solicitation stage of the business buying

process, the buyer invites qualified suppliers to submit
proposals.
When the item is complex or expensive, the buyer will

usually require detailed written proposals or formal
presentations from each potential supplier.
Supplier Selection
PPT 6-21 During supplier selection, the buying center often will draw
up a list of the desired supplier attributes and their relative
importance.
Buyers may attempt to negotiate with preferred suppliers for

better prices and terms before making the final selections. In
the end, they may select a single supplier or a few suppliers.
Many buyers prefer multiple sources of suppliers to avoid

being totally dependent on one supplier and to allow
comparisons of prices and performance of several suppliers
over time.
p. 178
Order-Routine Specification Key Terms: Order-
Routine

The buyer now prepares an order-routine specification. It Specification,
includes the final order with the chosen supplier or suppliers Performance
and lists items such as technical specifications, quantity Review
needed, expected time of delivery, return policies, and
warranties.
In the case of maintenance, repair, and operating items,

buyers may use blanket contracts rather than periodic
purchase orders. A blanket contract creates a long-term
relationship in which the supplier promises to resupply the
buyer as needed at agreed prices for a set time period.
p. 178 Performance Review
PPT 6-22 The performance review may lead the buyer to continue,
modify, or drop the arrangement.
The eight-stage model provides a simple view of the

business buying-decision process. The actual process is
usually much more complex.
Use Video Case here
It is often difficult for students to draw a parallel
between business buying and consumer buying even
though the students will have just covered consumer
buying in the previous chapter. One way to overcome
this difficulty is to have students discuss the
differences in how they buy clothes for themselves,
versus how Macy’s or another department store
would buy clothes to resell.
p. 178 E-Procurement: Buying on the Internet p. 178

Key Term: E-
PPT 6-23 Electronic purchasing, or e-procurement, has grown rapidly Procurement
in recent years. It is now standard procedure in most
companies.
PPT 6-24 E-procurement gives buyers access to new suppliers and

lower purchasing costs, and hastens order processing and
delivery. In turn, business marketers can connect with
customers online to share marketing information, sell
products and services, provide customer support services,

and maintain ongoing customer relationships.
Companies can conduct reverse auctions or engage in online

trading exchanges.
Companies can also conduct e-procurement by setting up p. 179

their own company buying sites or by setting up extranet Ad: Cisco
links with key suppliers.
E-procurement reduces the time between order and delivery.

Time savings are particularly dramatic for companies with
many overseas suppliers.
Beyond the cost and time savings, e-procurement frees

purchasing people to focus on more strategic issues.
The use of e-procurement also presents some problems.
At the same time that the Web makes it possible for suppliers
and customers to share business data and even collaborate on
product design, it can also erode decades-old customer-
supplier relationships.
E-procurement also can create potential security concerns.
Use Focusing on Ethics here
p. 180 Institutional and Government Markets Chapter Objective 4
Much of this discussion also applies to the buying practices

of institutional and government organizations. However,
these two non-business markets have additional character-
istics and needs.
PPT 6-25 p. 180

Institutional Markets Key Term:
Institutional Market
The institutional market consists of schools, hospitals,
nursing homes, prisons, and other institutions that provide
goods and services to people in their care. Institutions differ p. 180
from one another in their sponsors and in their objectives. Photo: General
Mills
Many institutional markets are characterized by low budgets
and captive patrons.

Many marketers set up separate divisions to meet the special
characteristics and needs of institutional buyers.
Government Markets
PPT 6-26
The government market offers large opportunities for many p. 181
companies, both big and small. Key Term:
Government Market
In most countries, government organizations are major
buyers of goods and services. In the United States alone,
federal, state, and local governments contain more than
88,000 buying units.
Government organizations typically require suppliers to

submit bids, and normally they award the contract to the
lowest bidder. In some cases, the government unit will make
allowance for the supplier’s superior quality or reputation for
completing contracts on time.
p. 182
Government organizations tend to favor domestic suppliers Photo: Federal
over foreign suppliers. Business
Opportunities
Government buyers are affected by environmental,
organizational, interpersonal, and individual factors.
One unique thing about government buying is that it is

carefully watched by outside publics, ranging from Congress
to a variety of private groups interested in how the
government spends taxpayers’ money.
Because their spending decisions are subject to public

review, government organizations require considerable
paperwork from suppliers, who often complain about
excessive paperwork, bureaucracy, regulations, decision-
making delays, and frequent shifts in procurement personnel.
Most governments provide would-be suppliers with detailed

guides describing how to sell to the government.
Non-economic criteria also play a growing role in

government buying.
• Government buyers are asked to favor depressed

business firms and areas; small business firms;
minority-owned firms; and business firms that avoid
race, gender, or age discrimination.

• Many firms that sell to the government have not been
marketing oriented.
• Total government spending is determined by elected
officials rather than by any marketing effort to
develop this market.
• Government buying has emphasized price, making
suppliers invest their effort in technology to bring
costs down.
• When the product’s characteristics are specified
carefully, product differentiation is not a marketing
factor.
• Nor do advertising or personal selling much matter in
winning bids on an open-bid basis.
Several companies have established separate government

marketing departments.
These companies anticipate government needs and projects,

participate in the product specification phase, gather
competitive intelligence, prepare bids carefully, and produce
stronger communications to describe and enhance their
companies’ reputations.
Use Small Group Assignment 2 here
Use Individual Assignment 2 here
Use Web Resources 5 and 6 here
Use Company Case here
END OF CHAPTER MATERIAL
Discussing the Concepts
1. Explain how the market structure and demand differ for business markets compared to
consumer markets. (AACSB: Communication; Reflective Thinking)
Answer:
The business marketer normally deals with far fewer but far larger buyers than the consumer
marketer does. Further, business demand is derived demand—it ultimately derives from the

demand for consumer goods. Many business markets have inelastic demand; that is, total
demand for many business products is not affected much by price changes, especially in the
short run. Finally, business markets have more fluctuating demand. The demand for many
business goods and services tends to change more—and more quickly—than the demand for
consumer goods and services does.
2. Name and describe the three types of business buying situations. (AACSB:
Communication)
Answer:
There are three major types of buying situations. At one extreme is the straight rebuy, which
is a fairly routine decision. At the other extreme is the new task, which may call for thorough
research. In the middle is the modified rebuy, which requires some research. In a straight
rebuy, the buyer reorders something without any modification. It is usually handled on a
routine basis by the purchasing department. A company buying a product or service for the
first time faces a new-task situation. In such cases, the greater the cost or risk, the larger the
number of decision participants and the greater their efforts to collect information will be.
The buyer makes the fewest decisions in the straight rebuy and the most in the new-task
decision. In the new-task situation, the buyer must decide on product specifications,
suppliers, price limits, payment terms, order quantities, delivery times, and service terms.
3. Name and describe the roles played by buying center participants in the business buying
process. (AACSB: Communication; Reflective Thinking)
Answer:
The buying center includes all members of the organization who play any of five roles in the purchase decision
process:
• Users are members of the organization who will use the product or service. In many cases,
users initiate the buying proposal and help define product specifications.
• Influencers often help define specifications and also provide information for evaluating
alternatives. Technical personnel are particularly important influencers.
• Buyers have formal authority to select the supplier and arrange terms of purchase. Buyers
may help shape product specifications, but their major role is in selecting vendors and
negotiating. In more complex purchases, buyers might include high-level officers
participating in the negotiations.
• Deciders have formal or informal power to select or approve the final suppliers. In routine
buying, the buyers are often the deciders, or at least the approvers.
• Gatekeepers control the flow of information to others. For example, purchasing agents
often have authority to prevent salespersons from seeing users or deciders. Other
gatekeepers include technical personnel and even personal secretaries.

4. Explain what is meant by systems selling and discuss why it is a preferred approach to buying
for many organizations. (AACSB: Communication; Reflective Thinking)
Answer:
Many business buyers prefer to buy a complete solution to a problem from a single seller
rather than buying separate products and services from several suppliers and putting them
together. The sale often goes to the firm that provides the most complete system for meeting
the customer’s needs and solving its problems. Such systems selling (or solutions selling) is
often a key business marketing strategy for winning and holding accounts.
5. Describe how online purchasing has changed the business-to-business marketing process and
discuss the advantages and disadvantages of electronic purchasing. (AACSB:
Communication)
Answer:
Online purchasing, often called e-procurement, gives buyers access to new suppliers, lowers purchasing costs,
and hastens order processing and delivery. In turn, business marketers can connect with customers online to
share marketing information, sell products and services, provide customer support services, and maintain
ongoing customer relationships. Companies can do e-procurement in any of several ways. They can conduct
reverse auctions, in which they put their purchasing requests online and invite suppliers to bid for the business.
Or they can engage in online trading exchanges, through which companies work collectively to facilitate the
trading process. Companies also can conduct e-procurement by setting up their own company buying sites. Or
companies can create extranet links with key suppliers. B-to-B marketers can help customers who wish to
purchase online by creating well-designed, easy-to-use Web sites.
Business-to-business e-procurement yields many benefits. First, it shaves transaction costs and results in more
efficient purchasing for both buyers and suppliers. E-procurement reduces the time between order and delivery.
And a Web-powered purchasing program eliminates the paper work associated with traditional requisition and
ordering procedures and helps an organization keep better track of all purchases. Finally, beyond the cost and
time savings, e-procurement frees purchasing people from a lot of drudgery and paperwork.
The rapidly expanding use of e-procurement, however, also presents some problems. For example, at the same
time that the Web makes it possible for suppliers and customers to share business data and even collaborate on
product design, it can also erode decades-old customer–supplier relationships. Many buyers now use the power
of the Web to pit suppliers against one another and to search out better deals, products, and turnaround times on
a purchase-by-purchase basis. E-procurement can also create potential security disasters. Although e-mail and
home banking transactions can be protected through basic encryption, the secure environment that businesses
need to carry out confidential interactions is sometimes still lacking.
6. Compare the institutional and government markets and explain how institutional and
government buyers make their buying decisions. (AACSB: Communication)
Answer:
The institutional market consists of schools, hospitals, prisons, and other institutions that provide goods and
services to people in their care. These markets are characterized by low budgets and captive patrons. The
government market, which is vast, consists of government units—federal, state, and local—that purchase or rent
goods and services for carrying out the main functions of government.

Government buyers purchase products and services for defense, education, public welfare, and other public
needs. Government buying practices are highly specialized and specified, with open bidding or negotiated
contracts characterizing most of the buying. Government buyers operate under the watchful eye of the U.S.
Congress and many private watchdog groups. Hence, they tend to require more forms and signatures and
respond more slowly and deliberately when placing orders.
Applying the Concepts
1. Business buying occurs worldwide, so marketers need to be aware of cultural factors

influencing business customers. In a small group, select a country and develop a multimedia
presentation on proper business etiquette and manners, including appropriate appearance,
behavior, and communication. Include a map showing the location of the country as well as
a description of the country in terms of its demographics, culture, and economic history.
(AACSB: Communication; Multicultural and Diversity)
Answer:
There are several sources on the Internet where students can get information for this exercise.
One good site is www.cyborlink.com. Instructors may want to assign groups to different
countries to give students a better understanding of the world.
2. Compare the similarities and differences between a buyer at a Veteran’s Administration

Hospital and a buyer at a for-profit hospital like Humana. Compare the buyers on the
following four factors: environmental, organizational, interpersonal, and individual.
(AACSB: Communication; Reflective Thinking)
Answer:
The various influences on business buyers include:

• Environmental: economic developments, supply conditions, technological changes,
political and regulatory developments, competitive developments, and culture/customs.
• Organizational: objectives, policies, procedures, organizational structure, and systems.
• Interpersonal: authority, status, empathy, persuasiveness.
• Individual: age, income, education, job position, personality, and risk attitudes.
Students’ analyses will vary, but the key difference between the two types of buyers is that
one is a government agency (Veteran’s Administration Hospital) subject to many more legal
and regulatory constraints than a private sector company (Humana). The main points of
differentiation are likely to be environmental and organizational factors. However, some of
the differences may be diminishing because of the growth of third-party payers (that is,
insurance companies, Medicare, Medicaid) and recent healthcare changes in the United
States due to the Healthcare Affordability Act.
3. The United States government is the world’s largest purchaser of goods and services,
spending more than $425 billion per year. By law, 23 percent of all government buying must
be targeted to small firms. Visit http://archive.sba.gov/contractingopportunities/index.html to

learn how small businesses can take advantage of government contracting opportunities.
Develop a brochure explaining the process to small business owners. (AACSB:
Communication; Reflective Thinking; Use of IT)
Answer:
Students’ brochures will vary. This Web site provides information in easy-to-understand
terms and organizing it into a brochure format should make this learning assignment more
interesting for students. Instructors might want to assign students to different types of
businesses, such as agricultural, manufacturing, professional services, wholesale and retail
trade, travel agencies, janitorial services, and so on so that students can be creative in
developing brochures specific to that type of business.
Focus on Technology: Apple’s Supply Chain
How many parts go into Apple’s iPhone? Of course there are the case, screen, camera,
processor, and battery, but have you ever considered all the other parts, such as screws and
switches? There are 40-50 screws alone in an iPhone, and each of the parts—including the
screws—must be sourced from suppliers. Apple’s list of primary contractors includes more than
20 companies scattered around the globe. Apple’s current CEO, Tim Cook, was brought on by
co-founder, the late Steve Jobs, to streamline Apple’s supply chain. Cook cut component
suppliers from 100 to 24 and shut down 19 Apple warehouses, resulting in a reduction of parts
inventory from one month to just six days. Most of this is possible through technology, and as a
result, Apple’s supply chain has been ranked number one in the world three years in a row by
Gartner’s and Apple is achieving record-setting profits.
1. Go to www.gartner.com/DisplayDocument?doc_cd=234062, select another company on

Gartner’s Supply Chain Top 25, and describe that company’s supply chain. Discuss the role
technology plays in that company’s purchasing. (AACSB: Communication; Reflective
Thinking; Use of IT)
Answer:
Students’ answers will vary. The report for 2012 can be found at
www.gartner.com/DisplayDocument?doc_cd=234062, but more current years may be
available from the company’s Web site. Instructors may want to assign specific companies
on the list, such as Amazon, McDonald’s, Dell, P&G, and so on so that a variety of
companies can be covered. Students will be able to find information by searching the
Internet (for example, “Amazon’s supply chain management system”).
2. Discuss possible negative consequences of using technology to gain competitive advantage

through purchasing and vendor relationship activities. (AACSB: Communication;
Reflective Thinking)
Answer:

The chapter discusses disadvantages of e-procurement. For example, at the same time that the Web makes it
possible for suppliers and customers to share business data and even collaborate on product design, it can also
erode decades-old customer–supplier relationships. Many buyers now use the power of the Web to pit suppliers
against one another and to search out better deals, products, and turnaround times on a purchase-by-purchase
basis. E-procurement can also create potential security disasters.
Other potential drawbacks are resistance from vendors and employees. Vendors have to invest resources in
technology, and initial start-up costs can be very high. There must be considerable trust between them and the
customer before they are willing to set up the necessary systems. Employees are often reluctant to adopt new
technologies, especially if those technologies can make their work more complicated, or worse, replace them.
Focus on Ethics: Pink Slime
In the early 1990s, Eldon Roth figured out a way to profit from slaughterhouse meat trimmings,
by-products that were once used only in pet food and cooking oil. This cheap and safe beef
product is called “lean, finely textured beef” (LFTB). The fatty bits of beef are heated and
treated with a puff of ammonium hydroxide gas to kill bacteria. You’ve probably eaten many
hamburgers that included LFTB prepared by fast-feeders, at school cafeterias, or even in your
own kitchen. LFTB makes ground beef leaner and cheaper. Shortly after it was developed, a
health safety inspector dubbed LFTB “pink slime,” but the name didn’t become public until the
major “pink slime” media brouhaha erupted in 2012. Consumers were repulsed to learn that they
were eating unappealing beef parts that were “soaked in ammonia.” Sales of ground beef fell 11
percent in one month. Ground beef producer AFA Foods sought bankruptcy protection and
Cargill lost 80 percent of its customers. The industry’s leading LFTB manufacturer, Beef
Products, Inc., shuttered 75 percent of its processing plants and laid off 650 workers.
McDonald’s and other fast-feeders, supermarkets, and institutional buyers such as schools and
hospitals discontinued using beef products containing LFTB, even though the safe and
inexpensive product has been around for many years.
1. Was the uproar over LFTB warranted, given the fact that it is a product deemed safe for
consumption by the U.S. Food and Drug Administration? Research other types of products
that are included in consumer products that could face a similar fate if consumers were aware
of them. (AACSB: Communication; Reflective Thinking; Ethical Reasoning)
Answer:
Students’ responses will vary. Some students might argue that it is warranted given the fact
that an expert in the industry came up with the negative name “pink slime.” However, the
other side of the argument is that there are probably worse ingredients in the food supply and
that this product was treated unfairly. An example of another product that could be
considered repulsive by consumers is Premarin which is a drug made from the urine of
pregnant mares. Other repulsive food additives can be found at
www.buzzfeed.com/daves4/10-everyday-foods-with-disgusting-ingredients and
http://webecoist.momtastic.com/2009/05/08/10-weird-and-gross-ingredients-in-processed-
food/.

2. Explain the type of buying situation faced by the companies that dropped the use of LFTB.
Describe the buying decision process they likely went through to find a replacement product.
(AACSB: Communication; Reflective Thinking)
Answer:
There are three major types of buying situations. At one extreme is the straight rebuy, which
is a fairly routine decision. At the other extreme is the new task, which may call for thorough
research. In the middle is the modified rebuy, which requires some research. In a straight
rebuy, the buyer reorders something without any modification. It is usually handled on a
routine basis by the purchasing department. A company buying a product or service for the
first time faces a new-task situation. In such cases, the greater the cost or risk, the larger the
number of decision participants and the greater their efforts to collect information will be.
The buyer makes the fewest decisions in the straight rebuy and the most in the new-task
decision. In the new-task situation, the buyer must decide on product specifications,
suppliers, price limits, payment terms, order quantities, delivery times, and service terms. In
this situation, customers, such as grocery stores, restaurants, and institution food service
providers need to find a new supplier of ground beef products, so it is not an entirely new
task buying situation and is best described as a modified rebuy decision.
The business buying process consists of eight stages:

• Problem recognition: recognition of a problem or need that can be met by acquiring
a specific product or service.
• General need description: describes the characteristics and quantity of the needed
item.
• Product specification: decide on the best product characteristics and specifies them
accordingly.
• Supplier search: search to find the best vendors.
• Proposal solicitation: buyer invites qualified suppliers to submit proposals.
• Supplier selection: review the proposals and select a supplier or suppliers.
• Order-routine specification: the final order with the chosen supplier or suppliers and
lists items such as technical specifications, quantity needed, expected time of
delivery, return policies, and warranties.
• Performance review: buyer may contact users and ask them to rate their satisfaction.
This review may lead the buyer to continue, modify, or drop the arrangement.
Most buyers will have already gone through these stages and now just need to find an
alternative product that does not include the “pink slime” filler. However, a search for new
vendors is likely.
Marketing by the Numbers: fMRI Market Potential

Functional magnetic resonance imaging technology (fMRI) is making its way into the marketing
research field, opening up a new market for this high-tech medical equipment. Using functional
MRI technology, or fMRI, marketing researchers can literally see a brain in action when
consumers view an advertisement or sample a product. A study in 2004 revealed that different
parts of consumers’ brains were activated when sampling a product with or without knowing the
brand. When consumers tasted a soft drink without knowing the brand, their brains showed
activity related to taste and they preferred Brand A. However, when subjects were shown the
brands, a different area of the brain was activated and more consumers preferred Brand B,
suggesting that advertising and marketing can activate different areas of consumers’ brains and
cause them to prefer specific brands. Several large marketing research firms such as Nielsen
now offer neuroscience marketing research services.
1. Research the marketing research industry to identify research companies that would be in the
target market for fMRI equipment. How many companies make up this market? (AACSB:
Communication; Reflective Reasoning)
Answer:
Students’ answers will vary depending on how they define the target market. Some will find
information on the entire marketing research industry, while others will define the market as
comprised of just neuromarketing companies. For example, see
www.neurosciencemarketing.com/blog/companies for a list of 23 neuromarketing
companies. However, another source lists several more (see
http://neurorelays.wordpress.com/2012/05/08/neuromarketing-companies-worldwide/).
Another source of marketing research companies is The Green Book (see
www.greenbook.org/), which lists thousands of marketing research companies.
2. Refer to Appendix 2, Marketing by the Numbers, and use the chain-ratio method to estimate
the market potential for fMRI machines among marketing research firms. What factors
would you consider when determining the potential number of buyers (that is, research firms)
that are willing and able to purchase fMRI machines? Assume a firm purchases one machine
at an average price of $1 million in your market potential estimation. (AACSB:
Communication; Analytical Reasoning)
Answer:
Market potential estimation is based on the number of buyers, the quantity purchased per
buyer, and the average price for the product (Market potential = B x Q x P). Because
students are given the quantity purchased per buyer (1 per buyer) and the average price ($1
million per fMRI machine), the only variance among students’ estimates will be based on the
number of buyers identified in the potential market. For example, using the 23
neuromarketing companies from one of the sources identified above gives a market potential
estimation of $23 million (Market potential = 23 companies x 1 machine per company x $1
million per machine = $23 million). However, the market potential may be higher than that
because this estimate only considers neuromarketing companies. The number of potential
buyers could be much larger if one considers companies in the entire marketing research
industry as the target market. However, it’s likely that only the larger companies will have
the resources needed expand into neuromarketing, so the total number should be reduced
based on a variable such as company revenues. The key point is that the market potential
calculation is an estimate and that judgment is necessary to make reasonable assumptions
when identifying the elements of the equation.
Company Case Notes
Cisco Systems: Solving Business Problems Through Collaboration
Synopsis
Cisco sells stuff to end-user consumers like you and me. It makes Linksys wireless routers that
are in so many homes. It also makes the trendy Flip video cameras. However, most of what
Cisco sells is never seen by regular folks. Cisco is a tried and true business-to-business company.
This case brings out the type of product that Cisco sells to businesses. But more importantly, it
highlights the fact that Cisco transitioned from a manufacturer of hard goods to a leadership
consultancy. The driving force behind Cisco’s own organizational behavior as well as its
customer relationships is collaboration. Cisco has a culture that fosters, recognizes, and rewards
collaboration within and without. Cisco collaborates with customers in order to help those clients
better collaborate with their employees, suppliers, partners, and customers. This culture and
execution of collaboration breaks down communication barriers. It has moved Cisco into the
business of teaching other businesses to do what it has mastered. This has also helped Cisco to
become a service provider in addition to the hardware products that it sells. Result, Cisco is
emerging for a major global recession stronger and more flexible than it was before. With
innovative new products and services, growing revenues, cash on hand, and competency in the
bursting collaboration market, Cisco is a leader that many are turning to.
Teaching Objectives
The teaching objectives for this case are to:
1. Allow students to understand and appreciate the differences between consumer and
business markets.
2. Identify real-world examples for the different buying situations.
3. Help students understand the differences between consumer and business buyer behavior.
4. Provide an opportunity for students to analyze product features and benefits that result for
commercial customers.

Discussion Questions
1. Discuss the nature of the market structure and demand for Cisco’s products.
Table 6.1 from the text provides the foundation for discussing this question. The
implications for any and all of these points may be discussed. Suggestions for the points
that are most relevant to this case are given below.
Implications for Cisco Implications for clients
Business markets contain There is a great deal of Clients should 2. G

few but larger buyers. pressure on Cisco to understand how i
maintain strong important they are to v
customer relationships Cisco and take e
and deliver on advantage of the sales n
promises. force attention.
t
Business buyer demand is It is essential that It is essential that the h
derived from final Cisco understand the client understand its e
customer. needs, wants, and own customer in order
desires of the end user, to communicate i
not just the customer requirements n
corporation. Also, to Cisco. d
Cisco must keep an eye u
on sales trends in s
collaboration market. t
r
Demand is more inelastic. Coming up with the The client must i
exact “right price” accurate forecast the e
may not be as number of units that it s
important as providing needs. It should also
the right features and maintain strong i
benefits to customers. procurement resources n
in order to ensure that
benefits are delivered w
as promised. h
i
Demand fluctuates more Cisco needs to Clients need to consider c
and more quickly. maintain flexibility in means of spreading h
order to adjust to demand out in order to
downturns and spikes create a more level C
in demand. structure in terms of its i
own costs. s
c
o competes, what are the implications for the major types of buying situations?

Straight rebuys – Because Cisco deals in high-tech, there may be few truly straight
rebuys. This is due to the fact that as purchase cycles come up, technology has changed.
As a result, corporate buyers are looking a slightly different to extremely different
products to replace the ones that they have. Straight rebuys are likely to occur when a
company buys a set of routers or switches that shortly after purchasing the same items.
This may be due to a gradual rollout replacement or an expansion.
Modified rebuy – Many of Cisco’s products will fall in to this situation. Clients replace
existing routers and switches with new spec models. Cisco’s services may also fall in to
this classification if this is something that a client has previously purchased.
New-task – Many of Cisco’s products and most of its services fall in to this classification.
For example, when Gale International, the construction company for New Songdo City,
contracted Cisco to supply the technology needs for the city, this was an all-new venture.
From the architecture to the hardware to the services, these represented new-tasks. Many
companies getting in to collaboration consulting services are doing so for the first time in
a similar manner.
3. What specific customer benefits likely result from the Cisco products mentioned in the
case?
• Routers and switches – keeps data flowing efficiently.

• Cybersecurity devices – protects proprietary information from being hacked or
stolen.
• Videoconferencing tools – allows employees to interact across distances without
incurring the expense and time required to travel.
• Collaboration services – helps clients better collaborate with employees, suppliers,
partners, and customers. Some resulting benefits are reduced time in bringing
products and services to market, reduced expenses, and strong customer
relationships.
4. Discuss the customer buying process for one of Cisco’s products. Discuss the selling
process. In what ways do these processes differ from the those found in buying and
selling a broadband router for home use?
Based on points discussed in questions 1 and 2, it should already be apparent that Cisco
buying situations are much more complex than consumer buying processes. Therefore, it
is important that students recognize that customers involved will go through a very
extensive buying process. Not only are there more steps involved in the business buying
process than there are in the consumer buying process, but for a complex modified rebuy,
the customer is certainly going to go through each of these steps from a very analytical
perspective.

5. Is the relationship between Cisco’s own collaborative culture and the products and
services it sells something that could work for all companies? Consider this issue for a
consumer products company like P&G.
Corporate culture is not something that can simply be plugged in. However, if
management is open to it, most any company should be able to adopt some of Cisco’s
best practices in order to achieve some of the benefits. For a consumer products
company like P&G, adoption of Cisco’s collaborative tools and services should result in
reduced communication barriers as described above. Similar to the benefits achieved by
the scientist working on solar technology in the case, P&G should achieve benefits of
accelerated new product development. This reduces costs and makes P&G more
competitive by bringing new products to market before other companies.
Teaching Suggestions
The case talks a lot about collaboration. But as a concept, students may have a hard time
wrapping their heads around just what that means. Prior to the discussion of this case, have
students conduct some research on what the “collaboration industry” is. Who are the
competitors? What are they selling? What are the trends? Have them report on this prior to
discussing the case.
This case goes well with the product chapters (Chapters 8 and 9) as well as with Chapters 1 and
2.
ADDITIONAL PROJECTS, ASSIGNMENTS, AND EXAMPLES

Projects
1. Identify a product that is bought and sold in a business-to-business context. Identify
individuals within the buying organization who fulfill the different roles of the buying
center. Identify as many for each role as possible, doing research where necessary. Point
out how some individuals might play more than one role. Is there a relationship between
some of the roles? Is that relationship always present? (Objective 2)
2. Interview a purchasing agent from a company with regard to the major types of buying
situations. Have him or her identify at least one example for each of the three major
types. What are the main differences for them in these types of buys? (Objective 2)
Small Group Assignments

1. Form students into groups of three to five. Each group should read the Real Marketing
6.1: International Marketing Manners. Then, answer the following questions and share
their answers with the class (Objective 3).
a. What can be done to keep us all from becoming “ugly Americans”?
b. What does the saying “When in Rome, Do As the Romans Do” mean to American
businesses? Provide an example or two.
c. Go online and further research business customs for any of the countries mentioned in
Real Marketing 6.1. What else did you discover about their practices that Americans
should know?
2. Form students into groups of three to five. Each group should read Real Marketing 6.2:
B-to-B Social Marketing: The Space to Engage Business Customers. Then, answer the
following questions and share their answers with the class. (Objective 4)
a. Try to imagine the profile of the typical business buyer. How might that person differ
from the social media users you know at your college or university? How could these
differences affect the content and messaging you create on social media sites
designed for business customers?
b. Does it surprise you that the business community has embraced social media on such
a large scale? Why or why not?
c. Discuss a few the marketing tasks for which social media is particularly well suited to
serve the business market.
Individual Assignments
1. Read Real Marketing 6.1: International Marketing Manners, and then answer the
following questions (Objective 3).
a. What is the “ugly American”?
b. How has American business gotten to the point where we believe everything should
be “American” when we travel? What does this say about us as a society?
c. Find a classmate from another country and speak with him or her about their
country’s customs. Which ones translate to business settings? What else did you learn
from this exercise?
2. Read Real Marketing 6.2: B-to-B Social Marketing: The Space to Engage Business
Customers. Then, answer the following questions. (Objective 4)
a. When customers choose Makino Machine Tools, what are they purchasing beyond an
actual piece of equipment? What does it mean to be an “industry thought leader?”
b. Analyze the quote, “We are selling business-to-people.” What does it mean for
anyone engaged in B-to-B marketing?
c. Do you believe that digital and social marketing are passing B-to-B fads, or are they
here to stay? Explain your answer.
Think-Pair-Share
Consider the following questions, formulate an answer, pair with the student on your right, share
your thoughts with one another, and respond to questions from the instructor.

1. What are the primary differences between the consumer market and the business market?
(Objective 1)
2. What are the roles in the business purchase decision process? Can these same roles be
applied in the consumer decision process? Give a detailed example. (Objective 2)
3. What are the advantages to business buying on the Internet? (Objective 3)
4. How might a government buyer differ from a non-government institutional buyer?
(Objective 4)
Outside Examples
1. Intel microprocessors power just about all of the personal computers on the planet. Take
a look at Intel’s homepage and go to the section pertaining to the company
(www.intel.com/intel/company/index.htm?iid=about_intel+cr_faq). See what you can
find that gives you an idea of the scope of their market. Remember, business marketers
sell products to others for inclusion in that company’s product. If you were a company
wanting to use Intel chips in your products, how would you go about it? (Objective 1)
Possible Solution:
A review of this Web site provides a substantial amount of information regarding Intel’s
clients. Specifically, students will find that Intel does not sell to resellers directly. Intel
has made a practice of selling only to a limited number of distributors. Any company
wishing to use Intel microprocessors is encouraged to contact and work through the
authorized distributor.
2. Walmart goes to great lengths to development suppliers. Imagine you are a small
manufacturer of a new product and you want to sell to Walmart. How would you
accomplish this feat? (Go to http://walmartstores.com/Suppliers/ for information to assist
your work.) (Objective 1)
Possible Solution:
This Web site gives potential suppliers everything they need to know to submit a
successful proposal to Walmart. Given that the students are to imagine themselves as a
small manufacturer, they will most likely make the decision to try and become a “local
supplier.” (Information regarding this is supplied at:
http://walmartstores.com/Suppliers/257.aspx). It is important for students to gain an
understanding of the complexity involved in business marketing. Additionally, it is just as
important for them to realize that even a small company has the potential to compete for
business with a major national organization.
Web Resources
1. http://247.prenhall.com
This is the link to the Prentice Hall support link.

2. http://www.ge.com/railservices/products/locomotive.html
From the GE Capital Rail Services homepage, you can explore how they partner with their
customers.
3. www.ikea.com
If you are not familiar with the type of products IKEA has to offer, take a look at their Web
site.
4. www.peterbilt.com
Take a look at how Peterbilt uses emotion in its ads to reach potential buyers.
5. www.fbo.gov
This is the Federal Business Opportunities Web site.
6. http://business.usa.gov/
Go here to learn how small businesses can find, bid, and win government contracts.

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Starting the Discussion

Copyright© 2014 Pearson Education

Considering our familiarity with GE’s consumer products, it

Copyright© 2014 Pearson Education

➢ Opening Vignette Questions

PPT 6-3 Business buyer behavior refers to the buying behavior of

Business-to-business (B-to-B) marketers must do their best to

Copyright© 2014 Pearson Education

Market Structure and Demand

Even in large business markets, a few buyers often account

Business demand is derived demand. It ultimately derives p. 167

Many business markets have inelastic demand; that is, total

Business markets have more fluctuating demand. The

Nature of the Buying Unit

Often, business buying is done by trained purchasing agents

Business buyers usually face more complex buying decisions

The business buying process also tends to be longer and

Copyright© 2014 Pearson Education

In the business buying process, buyer and seller are often

p. 170 Business Buyer Behavior Chapter Objective 2

p. 171 Major Types of Buying Situations

Copyright© 2014 Pearson Education

A company buying a product or service for the first time

Many business buyers prefer to buy a complete solution to a p. 172

p. 172 Participants in the Business Buying Process

PPT 6-10 The decision-making unit of a buying organization is called p. 172

• Users are members of the organization who will use

Copyright© 2014 Pearson Education

The buying center is not a fixed and formally identified unit

Within the organization, the size and makeup of the buying

The buying center concept presents a major marketing

The buying center usually includes some obvious

Major Influencers on Business Buyers

When suppliers’ offers are very similar, business buyers

Copyright© 2014 Pearson Education

Culture and customs can strongly influence business buyer

Organizational factors are also important. Each buying

The buying center usually includes many participants who

Each participant in the business buying-decision process

Copyright© 2014 Pearson Education

p. 176 The Business Buying Process Chapter Objective 3

General Need Description p. 176

Copyright© 2014 Pearson Education

The team decides on the best product characteristics and

Today, more and more companies are turning to the Internet

In the proposal solicitation stage of the business buying

When the item is complex or expensive, the buyer will

Buyers may attempt to negotiate with preferred suppliers for

Many buyers prefer multiple sources of suppliers to avoid

Copyright© 2014 Pearson Education

In the case of maintenance, repair, and operating items,

p. 178 Performance Review

The eight-stage model provides a simple view of the

p. 178 E-Procurement: Buying on the Internet p. 178

PPT 6-24 E-procurement gives buyers access to new suppliers and

Copyright© 2014 Pearson Education

Companies can conduct reverse auctions or engage in online

Companies can also conduct e-procurement by setting up p. 179

E-procurement reduces the time between order and delivery.

Beyond the cost and time savings, e-procurement frees

The use of e-procurement also presents some problems.

E-procurement also can create potential security concerns.