Class Intro 6
Business Customers and Buying Behavior.
The Economy! Weaker consumer demand has knock-on consequences throughout the supply chains. Combined with higher oil prices (cost of inputs), impact corporate buying.
Differences with final consumers: Purchase criteria and specifications; Multiple buying influence; Problem-solving process; B2B e-commerce; Buyer-seller relationships
Key types: Manufacturers; Producers of services; Retailers and Wholesalers; Government; Non-profits
Specifications: describe the need
Quality certification: ISO 9000
Buying Center: Buyers; Influencers; Deciders; Gatekeepers; Users
Influences on organizational buying includes: Vendor analysis; Behavioral needs; Ethical concerns; Centralization of purchasing
McDonald's, friendlier ribs. Consumer pressure, with animal welfare groups, pressures organization to change. McDonald's then needs to change the behavior of its suppliers, or change suppliers.
Apple: working conditions in its supply chain: China
Types of organizational buyers: straight rebuy; modified rebuy; new-task buying
New-task buying requires new information: search engines; web-sites; online communities; competitive bids
Sources of information: includes whitepapers: Engagement Marketing Revisited: How to Embrace the New Social Media Tools
Buyer-seller relationships, benefits of close relationship: mutual trust; long-term outlook; share tasks to reduce costs
Buyer-seller relationships, risks of close relationship: reduce flexibility; lock-in; not economical
Dual sourcing as an option, spreading risk of supply chain disruption.
WSJ: Reinforcing the Supply Chain
Manufacturers: few are large; clustered in geographic areas; classification by business data; NAICS codes
Services: smaller and more spread out; informal buying process
Retailers and wholesalers: committee buying; buying based on data; reorders are straight rebuys
Example: Selling to Barnes & Noble Selling to store, versus selling to corporate
Government: large; competitive bids; "approved" supplier list; foreign governments; FCPA
7% hiring of disabled workers, for government contractors