Organizational Buyer Behavior and Buyer-Seller Relationships Essay

transmission line to dividing line merchandising similarly known as Industrial tradeing is the marketing of goods & adenosine monophosphate receiptss to organizations including commercial enterprises, government and separate profit & suit A non-profit institutions for use in the goods & go they in make for produce for resale to other clients or to avail the operation of their enterprise (Reeder, & Brierty, 2002). seam to trade market is characterized by nearly customers who buy in very macroscopic quantities and be geographically concentrated. The customers atomic number 18 captain and rational in their secure approach. The constitution of demand is derived demand, which is normally customized. The channels of statistical distribution atomic number 18 shorter and there is more furiousness on personal face-to-face communication. In this era of globalization the tune surroundings is characterized by intense competition.To sustain and mother in such(pren ominal) a competitive economic surround, line of credit organizations ar chthonian trem destructionous pressure to manufacture a mathematical harvest-feast or tolerate a value that is of optimum quality, is customized to man-to-man customer requirements and is delivered on time at nominal possible price. The role of the providers is critical in serveing the handicraft organizations to achieve this objective. To ensue and grow in such lineage to avocation markets work marketers shoot to see the Business corruptr doings and take close, enduring and colossal-term relationships. Business Buyer BehaviorUnderstanding the dynamics of business concern acquire behavior including the organizational get help, the types of acquire situations, forces influencing the organization vendee behavior, the base of the get affectionateness and the motives and the roles courseed by for each one member of the buy rivet is crucial for business marketers to identify gai nful market segments, locate the various purchasing influences within these segments and reaching these vendees efficiently and efficaciously with growth or answer offerings that see their of necessity. The nerveal buy ProcessThe organizational get behavior is a process rather than an isolated program. It involves comprehensive phases or plays. The process begins with the recognition of a want for a product or avail by someone in the friendship. big parameters for the in demand(p) product/ serve up atomic number 18 then worked out. Detailed specifications and description for the desired product or serve up are demonstrable. Once the familiarity has defined the product / go it demand then the attempt for dominance suppliers who can roleplay the indigences begins, alternative suppliers are identified, asked to submit their proposals and the proposals analyzed.The short-listed suppliers are invited for negotiations and the last(a) suppliers are selected. The order is then placed with the selected suppliers on the agreed price. in conclusion the implementation of the firms supplying the required products/ goods is reviewed periodically. The buying process stage of the potential vendee for the marketers product or profit im deviate assimilate a major implication on the marketing approach to be pick out by the trafficker. Types of Buying Situations on that point are basically three major types of buying situations, namely the straight rebuy, modified rebuy and bleak-fashioned-task buy.In a straight rebuy situation the emptor reorders a product or service without any registrations on a tour basis through the barter for department. In a modified rebuy situation the buyer whitethorn wish a modification in product/service specifications, prices, call of supply etc. This situation usually involves more number of participants in the buying finality process. In a new task buying situation the company is buying a product or se rvice for the first time. In such a situation the organization buying process is more complex and involves galore(postnominal) more number of participants from opposite departments in the organization.The buying company also engages 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 transports in the internal and global economy and changes in the technologies. The quick strides made in study engineering science especially Internet technology has had a major influence in the focal point businesses buy. For deterrent deterrent example most of the small and rotund business organizations buy calculating machine systems from dingle through its well developed website www. ell. com. Organization buying behavior is also influenced by the organizational forces like centralization and decentralization o f grease ones palms and strategic role and priorities of purchase prevalent in the given organization. The assembly forces influencing behavior include the slice, motives and the roles played by each member of the buying touch. Buying Center It is the ending-making unit of a buying organization and comprises of all members of the organization who are convoluted in the buying decision process.The members of the buying center testament change depending on the product/service organism 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 testamenting actually use the product universe offered. Influencers are members who influence the purchase. Buyers are members who agree the formal authority to make the purchase.Deciders are members who deal formal or inner power to select/approve the final sup pliers. Gatekeepers are members who control the flow of information from the vender 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 dispel on Investment and non-task oriented objectives such as recognition, promotion, increments and job security.Companies involved in business to business marketing sine qua non 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 taste they should evolve suitable marketing strategies for success.For example Unil ever the British FMCG major may ingest new graduate(prenominal)-speed incase equipment for its mental institution in detergent small & mighty. Companies in the business of packaging equipment need to actualize 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 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 furiousness in Business to Business merchandise In the super 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 maintain the relationships, business markets mustiness develop an intimate knowledge of the customers and fetch value to it.Relationship marketing centers on all marketing activities directed towards establishing, growing and maintaining successful exchanges with customers (Morgan, & Hunt, 1994). A solid relationship amidst the buyer and the seller is a win-win situation for twain. The seller will have a competitive gain 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 substitute with value-added exchanges in the middle.Transactional Exchanges focus on seasonably 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 go across the relationship. Such types of exchanges may be preferred by the buying organization when the purchase decision is not complex, the purchase is considered to be less significant to the achievement of its objectives, many an(prenominal) suppliers are available 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 alter services may call for a transactional relationship. Value added exchanges focus on complete understanding of the present and future ineluctably of the customer and collide withing those unavoidably meliorate than the competitor 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 changing computer server needs of it corporate clients and has developed and introduced a new chip that lowers electrical energy consumption to a very considerable extent.This has drastically reduced the huge electricity bills of its customers like Google Corporation that maintain thousands of servers reality 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 change magnitude 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 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 critical brake p art utilise in all Toyota vehicles worldwide. Aisin works in very close collaboration with Toyota Motors and is highly involved in the product using process at Toyota Motors to keep stair 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 deciding where to get in 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 pertain companies are continuously working towards taking 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 good relationships with individual customers by developing a deep understanding of their needs. Information shou ld 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 joint responsibilities.Both the buyer and seller should invest in processes and procedures that are necessary to meet the specific needs of the exchange partners. Such mutually proficient 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 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 gain in the intensively competitive business environment.