Chapter 7

Organizational
Buyer
Behavior of
Group Market

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
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 “The ideal salesperson in the
company meetings segment isn’t a
salesperson in the traditional sense,
but rather the problem-solver.”

Robert C. Mackey

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
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Kotler,Bowen,
Bowen,and
andMakens
Makens
 Chapter Objectives
• Understand the organizational buying
process

• Identify and discuss the importance of

the participants in the organizational
buying process

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
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Kotler,Bowen,
Bowen,and
andMakens
Makens
 Chapter Objectives
• Identify the major influences on
organizational buyers

• List the eight stages of the

organizational buying process

• Identify and describe the group markets

in the hospitality industry
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 The Organizational Buying
Process
• Market Structure and Demand

– Organizational demand is derived

demand; it comes ultimately from the
demand for consumer goods or
services

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
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Kotler,Bowen,
Bowen,and
andMakens
Makens
 The Organizational Buying
Process
• Organizational buying decisions tend to
be more complex than consumer
decisions

• The organizational buying process

tends to be more formal than the
consumer process

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Participants in the
Organizational Buying Process
• A buying center is all those individuals
and groups who participate in the
purchasing decision-making process,
who share common goals and the risks
arising from the decisions

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Participants in the Organizational
Buying Process
Users Influencers
Ethical
Decision-
Factors
Factors
Deciders
Making Unit
Situational
Situational
of a Buying
Unexpected
Unexpected

Roles Include Organization

is Called Approvers
Its Buying
Attitudes
Attitudes
Center.
of
of
Others
Others
Gatekeepers Buyers

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Major Influences on
Organizational Buyers

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Organizational Buying
Decisions
1. Problem Recognition 5. Proposal Solution

2. General Need 6. Supplier Selection

Description
7. Order-Routine
3. Product Specification
Specification
8. Performance Review
4. Supplier Research
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
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Kotler,Bowen,
Bowen,and
andMakens
Makens
 Problem Recognition
• Problem recognition is when someone
in a company recognizes a problem or
need that can be met by acquiring a
good or a service

• Problem recognition can occur because

of internal and external stimuli

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
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Kotler,Bowen,
Bowen,and
andMakens
Makens
 General Need Description
• General need description is when a
company describes the general
characteristics and quantity of a needed
item

• What are some items that would be

included in a general needs description
for a training meeting?
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
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4thTourism,
edition 4th edition
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Kotler,Bowen,
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andMakens
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 Product Specification
• Product specification is when the
buying organization decides on and
specifies the best technical product
characteristics for a needed item
• What are some items that would be
included in a product specification
description for a training meeting?

©2006 Pearson Education, Inc. Marketing for

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forand
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edition 4th edition
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Kotler,Bowen,
Bowen,and
andMakens
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 Supplier Search

• Supplier search is when a buyer tries

to find the best vendor

• What are the best ways for buyers to

identify suppliers?

©2006 Pearson Education, Inc. Marketing for

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Hospitality
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Kotler,Bowen,
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andMakens
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 Proposal Solution
• Proposal solution is when qualified
suppliers are invited to submit proposals

• What are some important tools for

writing and researching a proposal?

©2006 Pearson Education, Inc. Marketing for

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Kotler,Bowen,
Bowen,and
andMakens
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 Supplier Selection
• Supplier selection is when a buyer
receives proposals and selects a
supplier or suppliers

• What are the six attributes that meeting

planners consider when selecting a
location

©2006 Pearson Education, Inc. Marketing for

Marketing
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Tourism,and
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 Order-Routine Specification
• Order-routine specification when a buyer
writes the final order with the chosen
supplier(s), listing the technical specifications,
quantity needed, expected time of delivery,
return policies, warranties, and so on

©2006 Pearson Education, Inc. Marketing for

Marketing
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Kotler,Bowen,
Bowen,and
andMakens
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 Performance Review
• Performance review is when a buyer
rates its satisfaction with suppliers,
deciding whether to continue, modify, or
drop the relationship

©2006 Pearson Education, Inc. Marketing for

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 Group Business Markets
• Conventions
• Association Meetings
• Corporate Meetings
• Incentive Travel
• SMERFs – Social, military,
educational, religious, and fraternal
organizations

©2006 Pearson Education, Inc. Marketing for

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andMakens
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 Dealing with Meeting Planners
• The hotel salesperson must look for items
that will create value for the meeting
planner without creating costs or
sacrificing revenue for the hotel

• Meeting planners expect timeliness and

efficiency

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
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 The Corporate Account and
Corporate Travel Manager
• Highly sought after segment

• 10% to 40%

• More likely to use hotel services

(restaurants, laundry, etc.)

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Best Practice
• Don Walter – Convention Liaison
Council’s Hall of Leaders

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Key Terms
• Buying center

• Convention

• Corporate meeting

• Derived demand

• General need description

©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Key Terms
• Incentive travel

• Order-routine specification

• Organizational buying process

• Performance review

• Problem recognition
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Key Terms
• Product specification

• SMERF

• Supplier search

• Supplier selection
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens