Business, Government,

and Institutional Buying

Claudio V. Henrique
MBA
August 18, 2019
CHAPTER OUTLINE

• Categories of Organizational Buyers

• The Organizational Buying Process
• Purchase-Type Influences On Organizational Buying
• Structural Influences On Organizational Buying
• Behavioral Influences on Organizational Buying
• Stages in the Organizational Buying Process
CHAPTER OUTLINE
1.Categories of Organizational Buyers
• 1.1. Producers
• 1.2. Intermediaries
• 1.3.Government Agencies
• 1.4. Other Institutions
2.The Organizational Buying Process
3.Purchase-Type Influences On Organizational Buying
3.1. Straight Rebuy
3.2. Modified Rebuy
3.3. New Task Purchase
4.Structural Influences On Organizational Buying
4.1. Purchasing Role
4.2. Organization-Specific Factors
4.3. Purchasing Policies and Procedures
5.Behavioral Influences on Organizational Buying
5.1. Personal Motivations
5.2. Role Perceptions
6.Stages in the Organizational Buying Process
6.1. Organizational Need
6.2.Vendor Analysis
6.3.Purchase Activities
Categories Of Organizational Buyers

• The organizational buyers are classified in to four categories.

These include producers, intermediaries, government
agencies and other institutions.
• Taken collectively, marketing to producers and intermediaries is
called business-to-business or B2B marketing.
• Business-to-business marketing has become a topic of increasing
interest because it is the major area where Internet marketing
has been done profitably
Producers

• These organizational buyers consist of businesses that buy goods

and services in order to produce other goods and services.
• Producers are engaged in many different industries, ranging
from agriculture to manufacturing, from construction to
finance. Together they constitute the largest segment of
organizational buyer
Intermediaries

• Marketing intermediaries or resellers purchase products to

resell at a profit. Intermediaries also purchase products and
services to run their own business, such as office supplies and
maintenance services
Government Agencies

• In the United States, government agencies operate at the

federal, state, and local levels.
• There are over 86,000 governmental agencies in this country
that purchase machinery, equipment, facilities, supplies and
services.
• Marketing to government agencies can be complex since they
often have strict purchasing policies and regulations
Other Institutions

• Besides businesses and government agencies, marketers also

sell products and services to a variety of other institutions such
as hospitals, museums, universities, nursing homes, and
churches.
The Organizational Buying Process

• Regardless of the types of organization, a buying process is

needed to ensure that products and services are purchased and
received in a timely and efficient manner.
The Organizational Buying Process
Purchase-Type Influences on Organizational
Buying
• A major consideration that affects the organizational buying
process is the complexity of the purchase that is to be made.
There are three types of organizational purchases.
• Straight Rebuy : The simplest and most common type of purchase is
called straight rebuy, routine reordering from supplier used in the past.
• Modified Rebuy : Purchase involves considering a limited number of
alternatives before making the selection.
• New task purchase : Involves an extensive search for information and a
formal decision process – undertaken for infrequent but important/large
organizational purchases
Structural Influences On Organizational
Buying
• Structural influences – Refers to the design of the organizational
environment and how it affects the purchasing process
• •Three important structural influences on organizational buying
are:
• 1.Purchasing roles
• 2.Organization-specific factors
• 3.Purchasing policies and procedures
Purchasing roles

• Initiators – these people requisition or suggest purchasing a product or

service;
• Users – these are people in the organization who use the product. Sometimes
they will also be involved in devising product specifications;
• Influencers – influencers affect the buying decision in different ways e.g.
they may be technical personnel who have developed product specifications;
• Deciders – deciders make the buying decision (in most cases this is the
buyer);
• Buyers – buyers have formal authority to purchase the product;
• Approvers – these people authorize actions of deciders or buyers;
• Gatekeepers – gatekeepers control the flow of information to and from DMU
or buying center members e.g. a buyer’s assistant or a telephonist.
Organization-specific factors

• Three primary organization-specific factors influence the

purchasing process:
• Orientation
• Size
• Degree of centralization
Purchasing policies and procedures

• these procedures are designed to ensure that the appropriate

products and services are purchased efficiently and that
responsibility for buying is assigned appropriately.

• This type of purchase involves routinely reordering from the

same supply conduct that has been purchased in the past.
Behavioral Influences on Organizational
Buying
• Personal Motivation : factors such as friendship, professional
pride, fear and uncertainty, trust and personal ambition

• Role Perceptions: their commitment lies in what they believe

is their perceived or expected role
Stages in the Organizational Buying Process

• Organizational Need
• Vendor Analysis
• Purchase Activities
• Post-purchase Evaluation