Organizational Buyer Behavior and Buyer-Seller Relationships Essay

barter to telephone line merchandising also know as Industrial marketing is the marketing of goods & goods to organizations including commercial enterprises, government activity and other profit & non-profit institutions for use in the goods & receiptss they in minute produce for resale to other guests or to facilitate the operation of their enterprise (Reeder, & Brierty, 2002). condescension to business market is characterized by few customers who buy in real large quantities and be geographic all toldy concentrated. The customers atomic number 18 professional and rational in their bargain for approach. The nature of demand is derived demand, which is usually customized. The channels of distribution are shorter and there is more emphasis on personal face-to-face communication. In this era of globalization the business environment is characterized by intense competition.To stay fresh and grow in such a warring economic environment, business organizations are under tre mendous pressure to manufacture a growth or provide a renovation that is of optimum quality, is customized to soulfulness(a) customer requirements and is delivered on cartridge holder at minimum possible bell. The office of the suppliers is all-important(a) in helping the business organizations to achieve this objective. To succeed and grow in such business to business markets business marketers strike to understand the business line vendee Behavior and evolve button up, enduring and long-term descents. Business Buyer BehaviorUnderstanding the dynamics of business secure style including the organisational acquire march, the types of buying seats, forces influencing the organization emptor behavior, the composition of the buying amount and the motives and the roles played by separately member of the buying center is authoritative for business marketers to identify profitable market segments, locate the sundry(a) buying influences within these segments and r severallying these barter forrs efficiently and effectively with crossing or serve up offerings that satisfy their inevitably. The Organizational Buying ProcessThe organizational buying behavior is a offshoot rather than an isolated program. It involves comprehensive phases or stages. The mathematical operation begins with the recognition of a subscribe for a harvest-festival or gain by someone in the compevery. Broad parameters for the desired product/ swear out are then worked out. Detailed specifications and description for the desired product or service are developed. Once the company has defined the product /service it needs then the search for possible suppliers who can tinct the needs begins, alternative suppliers are identified, asked to submit their proposals and the proposals analyzed.The short-listed suppliers are invited for negotiations and the final suppliers are selected. The rig is then placed with the selected suppliers on the agreed terms. Finally the performance of the firms render the required products/ services is reviewed periodi bordery. The buying process stage of the potential purchaser for the marketers product or service testament make up a major implication on the marketing approach to be adopted by the seller. Types of Buying Situations there are basically iii major types of buying situations, namely the straight rebuy, modified rebuy and smart- proletariat buy.In a straight rebuy situation the emptor reorders a product or service without any modifications on a routine basis by means of the purchase de small-armment. In a modified rebuy situation the buyer may conjure a modification in product/service specifications, prices, terms of generate etc. This situation usually involves more number of participants in the buying decision process. In a new task buying situation the company is buying a product or service for the starting time time. In such a situation the organization buying process is more complex and involves many more number of participants from different departments in the organization.The buying company also needs to decide on the product/service specifications, prices, delivery terms, order quantities, service terms etc. Forces Influencing Business Buying Behavior The organization buying behavior is influenced by environmental forces like changes in the domestic and global economy and changes in the technologies. The quick strides made in information engineering science especially Internet technology has had a major influence in the way businesses buy. For illustration more or less of the small and large business organizations buy computer systems from Dell through its well developed website www. ell. com. Organization buying behavior is also influenced by the organizational forces like centralization and decentralization of purchase and strategic role and priorities of purchase prevalent in the given organization. The group forces influencing behavior complicate th e composition, motives and the roles played by distributively member of the buying center. Buying tenderness It is the decision-making unit of a buying organization and even offs of all members of the organization who are involved in the buying decision process.The members of the buying center entrust change depending on the product/service be purchased and the buying situation in which it is being purchased. The buying center members may play any one or a combination of the five roles namely, users, influencers, buyers, deciders and gatekeepers. Users are the members who leave actually use the product being offered. Influencers are members who influence the purchase. Buyers are members who corroborate the dinner gown authority to make the purchase.Deciders are members who have formal or informal power to select/approve the final suppliers. Gatekeepers are members who control the flow of information from the seller to other members of the buying center. The buying motives/ob jectives of each member of the buying center through which the members evaluate potential suppliers may differ. The motives may include task oriented objectives such as price, quality, service and Return on Investment and non-task oriented objectives such as recognition, promotion, increments and job security.Companies involved in business to business marketing need to clearly identify the buying situation, the stage or the phase in the buying decision making process for the product being offered, the various forces influencing the buying organizations behavior, the composition of the buying center, the role played by each member of the buying center and the criteria on which they evaluate the suppliers for each individual customer. Based on such an understanding they should evolve suitable marketing strategies for success.For example Unilever the British FMCG major may need new high-velocity packaging equipment for its innovation in detergent small & mighty. Companies in the busine ss of packaging equipment need to understand that it is a new task buy situation for Unilever. And the company may be in the need identification stage of the buying process. They need to have closer relationship with the members from different functional areas like operations, engineering, design, finance and purchase who may comprise the buying center, understand the motives of purchase and the role played by each member.This is polar because each of this buyer behavior characteristic will have an implication on the buying decision process at Unilever. This will help the supplier to evolve suitable marketing strategies to be the favoured supplier of Unilever. Relationship emphasis in Business to Business Marketing In the highly competitive environment that is prevalent today, suppliers have evolved into business partners. There is a major emphasis on close and long-term relationships in the business to business markets. To importanttain the relationships, business markets must de velop an snug knowledge of the customers and add value to it.Relationship marketing centers on all marketing activities directed towards establishing, developing and maintaining successful exchanges with customers (Morgan, & Hunt, 1994). A industrial-strength relationship mingled with the buyer and the seller is a win-win situation for both. The seller will have a competitive advantage over his competition and the buyer will have effective business solutions to his problem. The relationships between the buyer and the seller in the business to business setup are positioned on a spectrum with transactional exchanges on one end and collaborative exchanges at the other radical with value-added exchanges in the middle.Transactional Exchanges focus on timely exchange of a product/service for a competitive price. Economy and necessity are the main motivational factors of such exchanges with little interest on the part of the buyer or the seller to extend the relationship. such types o f exchanges may be favourite(a) by the buying organization when the purchase decision is non complex, the purchase is considered to be less significant to the achievement of its objectives, many suppliers are unattached and the supply market is stable. Here the business marketer need not make any specialized investment in building relationships.For example the supply of office stationery and cleaning services may call for a transactional relationship. Value added exchanges focus on complete understanding of the donation and future needs of the customer and seemlying those needs fail than the rival by customizing the firms offerings to the needs of individual customers. For example Intel Corporation, a leading player in the semiconductor industry has understood the ever-changing computer server needs of it corporate clients and has developed and introduced a new chip that lowers electricity consumption to a very great extent.This has drastically reduced the huge electricity bil ls of its customers like Google Corporation that maintain thousands of servers humankind wide (Edwards, 2006) Collaborative Exchanges focus on building a strong social, economic, service and technical ties over a long period of time for mutual benefit through reduced costs and increased value. Such exchanges are very crucial when the market is very dynamic, the complexity of purchase is very high and the product/service being purchased is very crucial for the performance of the end product of the buying organization.In such situations the teddy costs involved in changing a supplier are also very high for the buying organization. For example Asin is the sole supplier to the Japanese car manufacturing major Toyota Motors for p-valve, a critical brake part used in all Toyota vehicles worldwide. Aisin works in very close collaboration with Toyota Motors and is highly involved in the product development process at Toyota Motors to keep pace with the innovations being made in the Toyota vehicles and meet the JIT production requirements of Toyota (Liker, 2004).Business Marketers have some flexibility in decision making where to participate along the relationship continuum. It basically depends on the characteristics of the market, the type and price of product/service being offered and the significance of product/service being offered to the buying organization. However rival companies are continuously working towards winning away the best accounts and so also the requirements, expectations and the preferences of the individual customers keeps changing continuously.To meet these challenges business marketers must develop mutually just relationships with individual customers by developing a deep understanding of their needs. Information should be openly shared to benefit both the buyer and the seller. The systems, procedures, and routines of the buyer and seller should be connected to facilitate operations. There should be very good cooperation between the buyer and seller and both should treat the buying situations as join responsibilities.Both the buyer and seller should invest in processes and procedures that are essential to meet the specific needs of the exchange partners. Such mutually beneficial relationships between the buyer and the seller will result in better service to the business customer as the seller will be able to provide customized product/service solutions that precisely meet the individual customer needs. Conclusion Business to business markets are growing in volume as compared to consumer markets.The characteristics of the Business to business markets call for closer buyer seller relationships. Companies operating in the Business to business markets should clearly rent the organizational buyer behavior with respect to the product or service they offer. They should decide on the type of relationship, ranging from transactional exchange to collaborative exchange, which they should adopt with each customer to gain compe titive advantage in the intensively competitive business environment.