Organizational buying

Welcome to our session on organizational buying. I'm Greg Marshall, and I serve as the Harwood Professor of Marketing and Strategy at the Crummer Graduate School of Business at Rollins College in Winter Park, Florida, in the United States. I also have an appointment at Aston Business School in Birmingham, UK.

It's a pleasure to be here today to talk to you about this interesting topic in marketing. First, a little bit about me. Before I went back to get my PhD and became a professor, I worked in industry for 13 years in the retailing and consumer packaged goods sales and marketing field. I've had engagements over the years with a number of organizations in the business-to-business space, doing training and consulting work. I'm author and co-author of several textbooks that are related to sales and marketing.

Here are key topics for coverage in our session today. First, let's talk about the characteristics of the business marketplace. Second, what are some different types of organizational buying situations? Third, we need to learn a few things about buying centers and the role of the members of those buying centers. Fourth, there are several purchase decision steps in organizational markets. Fifth, what is the importance of technology, today, in organizational buying?

What is a business market? Well, the topic of organizational buying and organizational buyer behavior is very relevant because business markets are incredibly robust around the globe. Think of it this way. In consumer marketing and consumer behavior, the topic is really focused on end users, folks like you or me who are purchasing a product or service for our own use or consumption. In contrast, the B2B market includes goods and services that organizations buy for purposes other than for personal consumption, and so an organizational buyer is different from an end-user consumer in many ways. Just a few quick examples of those differences. First of all, in the organizational buyer space, people who are making the purchase decisions are professional employees of an organization. Obviously, that's very different from the kinds of purchasers that we're dealing with when we focus our marketing on end-user consumers. Second is that there is a limited number of purchasers. In other words, in a particular industry, you could probably pretty much list every company that could be a potential purchaser of your products or services. Well, we know, in the consumer marketing space, it's not that easy to identify all the potential purchasers. In fact, a lot of what we work on, in marketing towards consumers, is finding ways to segment markets so that we can go ahead and do a better job of targeting specific consumer groups. Now, it's not that market segmentation isn't relevant in the B2B space. It is, but it's just that the purchasers in that space are much more closely defined and identifiable than in consumer marketing. Another important issue in B2B purchasing is the fact that the motivation to purchase by the organization can be pretty different than a consumer purchase situation. Think of it this way, business purchases frequently involve spending a lot of money, or a product or service that's going to be used within an enterprise to, hopefully, make that enterprise more successful, more profitable, and ultimately to benefit the firm. This reflects, of course, on how well the purchasing department or the purchasing group, or a buying center or whoever is involved in the organization in making that purchase decision, is doing their job. This is very different from the critical motivations that you see in the business-to-consumer marketing space.