Class Intro 6

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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

Halliburton Ego, Alcohol to Blame, Says KBR's Ex-Chief

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

North American Industry Classification System

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