Organizational Buyer Behavior and Buyer-Seller Relationships Essay

personal credit line to trading selling withal know as Industrial selling is the trade of goods & work to formations including commercial efforts, g overnment and separate profit & non-profit institutions for use in the goods & utilitys they in turn produce for resale to separate guests or to facilitate the operation of their enterprise (Reeder, & Brierty, 2002). tune to pipeline commercialise is characterized by few customers who buy in actually large quantities and be geographi weepy concentrated. The customers argon professional and rational in their acquire approach. The nature of demand is derived demand, which is usually customized. The take of distribution atomic number 18 shorter and there is to a greater extent idiom on personal face to face communication. In this era of globalization the note environment is characterized by intense competition.To keep back and grow in much(prenominal)(prenominal) a competitive economic environment, telephone c ircuit physical compositions be under trem stamp outous pressure to reconcile a output or nominate a avail that is of optimum quality, is customized to respective(prenominal)(a) customer requirements and is delivered on time at minimum possible price. The map of the suppliers is crucial in dishing the transmission line organizations to come across this objective. To succeed and grow in such business to business markets business marketers pauperization to agnise the Business Buyer mien and evolve close, enduring and long-term family relationships. Business Buyer BehaviorUnderstanding the dynamics of business purchasing mien including the organizational purchasing edge, the graphic symbols of acquire internet sites, forces influencing the organization emptor mien, the composition of the barter for center and the motives and the roles contend by to each one member of the buy center is crucial for business marketers to determine profitable market segment s, locate the variant purchase influences within these segments and reaching these vendees expeditiously and effectively with ingathering or aid offerings that satisfy their desires. The Organizational acquire work outThe organizational purchasing behavior is a put to work rather than an isolated program. It involves all-around(prenominal) phases or compass points. The process begins with the recognition of a shoot for a return or process by someone in the fellowship. Broad parameters for the desired proceeds/ operate atomic number 18 therefore worked out. Detailed specifications and definition for the desired product or attend be demonstrable. Once the company has be the product / run it require then the search for potential suppliers who can escort the needs begins, alternative suppliers are identified, asked to pass along their proposals and the proposals analyzed.The short-listed suppliers are invited for negotiations and the final suppliers are sele cted. The arrange is then placed with the selected suppliers on the agree terms. Finally the performance of the firms make outing the infallible products/ go is reviewed numberically. The purchasing process stage of the potential purchaser for the venders product or run testament yield a major signification on the marketing approach to be adopted by the vender. Types of Buying Situations in that respect are basically three major types of purchase notes, namely the straight rebuy, special rebuy and overbold-trade union movement buy.In a straight rebuy site the purchaser reorders a product or service without any modifications on a routine basis through and through the obtain department. In a modified rebuy property the buyer may wish a modification in product/service specifications, prices, terms of supply etc. This situation usually involves more number of participants in the buying finis process. In a new task buying situation the company is buying a produ ct or service for the first time. In such a situation the organization buying process is more confused and involves many more number of participants from various departments in the organization.The buying company a uniform needs to decide on the product/service specifications, prices, deli truly 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 rapid strides made in randomness engine room especially Internet technology has had a major influence in the way businesses buy. For example most of the atrophied and large business organizations buy data processor systems from Dell through its well developed website www. ell. com. Organization buying behavior is also influenced by the organizational forces like centralisation and decentralization of purchase and strategic role and priorities of purchase prevalent in the condition organization. The group forces influencing behavior include the composition, motives and the roles compete by each member of the buying center. Buying Center It is the decision-making unit of a buying organization and comprises of all members of the organization who are knotty in the buying decision process.The members of the buying center get out change depending on the product/service be purchased and the buying situation in which it is cosmos 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 volition actually use the product creation offered. Influencers are members who influence the purchase. Buyers are members who extradite the formal authority to touch the purchase.Deciders are members who lead formal or informal power to select/ respect the final suppliers. Gatekeepers are members who control the lead o f information from the seller to other members of the buying center. The buying motives/objectives of each member of the buying center through which the members evaluate potential suppliers may differ. The motives may include task point objectives such as price, quality, service and Return on Investment and non-task oriented objectives such as recognition, promotion, increments and job security.Companies convoluted in business to business marketing need to understandably 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 compete by each member of the buying center and the criteria on which they evaluate the suppliers for each exclusive customer. Based on such an spirit they should evolve suitable marketing strategies for success.For example Unilever the British FMCG major may need new high-speed case equipment for its innovation in detergent nonaged & mighty. Companies in the business 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 antithetical 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 crucial 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 merchandising In the highly competitive environment that is prevalent today, suppliers have evolved into business partners. thither is a major emphasis on close and long-term relationsh ips in the business to business markets. To maintain the relationships, business markets moldiness develop an intimate knowledge of the customers and jibe value to it.Relationship marketing centers on all marketing activities directed towards establishing, developing and maintaining successful commutings with customers (Morgan, & Hunt, 1994). A strong relationship in the midst of 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 supercedes on one end and cooperative converts at the other extreme 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 wit h junior-grade interest on the part of the buyer or the seller to extend the relationship. such(prenominal) types of exchanges may be preferred by the buying organization when the purchase decision is not complex, the purchase is considered to be slight significant to the achievement of its objectives, many suppliers are available and the supply market is stable. here(predicate) the business marketer need not make any specialized investiture in build relationships.For example the supply of office stationery and cleaning services may call for a transactional relationship. revalue added exchanges focus on complete understanding of the present and future needs of the customer and meeting those needs better than the rivalry by customizing the firms offerings to the needs of one-on-one customers. For example Intel Corporation, a spark advance player in the semiconductor industry has understood the changing computer emcee needs of it corporate clients and has developed and intr oduced a new chip that lowers electricity inlet to a actually great extent.This has drastically reduced the huge electricity bills of its customers like Google Corporation that maintain thousands of servers world dewy-eyed (Edwards, 2006) Collaborative Exchanges focus on building a strong social, economic, service and good ties over a long period of time for mutual benefit through reduced costs and increased value. such(prenominal) 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 switching 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 unfavorable 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 doing requirements of Toyota (Liker, 2004).Business Marketers have some flexibleness in deciding 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 taking onward 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 moldiness develop mutually beneficial relationships with individual customers by developing a involved 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 attached to facilitate operations. There should be very good cooperation between the buyer and seller and both should treat the buying situations as joint responsibilities.Both the buyer and seller should invest in processes and procedures that are necessity 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 record book as compared to consumer markets.The characteristics of the Business to business markets call for closer buyer seller relationships. Companies operating(a) in the Business to business markets should clearly study 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 competitive advantage in the intensively competitive business environment.