tour09 midterm chapter 07

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Chapter 7

Organizational Buyer

Behavior of Group Market


“The ideal salesperson in the company meetings segment isn’t a

salesperson in the traditional sense, but rather the problem-solver.”

Robert C. Mackey



Chapter Objectives

• Understand the organizational buying process

• Identify and discuss the importance of the participants in the organizational buying process



Chapter Objectives

• Identify the major influences on organizational buyers

• List the eight stages of the organizational buying process

• Identify and describe the group markets in the hospitality industry



The Organizational Buying Process

• Market Structure and Demand

– Organizational demand is derived demand; it comes ultimately from the demand for consumer goods or services



The Organizational Buying Process

• Organizational buying decisions tend to be more complex than consumer decisions

• The organizational buying process tends to be more formal than the consumer process



Participants in the Organizational Buying Process

• A buying center is all those individuals and groups who participate in the purchasing decision-making process, who share common goals and the risks arising from the decisions



UnexpectedSituational

Factors

UnexpectedSituational

Factors

Attitudes of

Others

Attitudes of

Others

Participants in the Organizational Buying Process

EthicalDecision-Making Unit

of a Buying

Organization is Called

Its Buying Center.

Users Influencers

BuyersGatekeepers

Roles Include

Deciders

Approvers



Major Influences on Organizational Buyers



Organizational Buying Decisions

1. Problem Recognition

2. General Need Description

3. Product Specification

4. Supplier Research

5. Proposal Solution

6. Supplier Selection

7. Order-Routine Specification

8. Performance Review



Problem Recognition

• Problem recognition is when someone in a company recognizes a problem or need that can be met by acquiring a good or a service

• Problem recognition can occur because of internal and external stimuli



General Need Description

• General need description is when a company describes the general characteristics and quantity of a needed item

• What are some items that would be included in a general needs description for a training meeting?



Product Specification

• Product specification is when the buying organization decides on and specifies the best technical product characteristics for a needed item

• What are some items that would be included in a product specification description for a training meeting?



Supplier Search

• Supplier search is when a buyer tries to find the best vendor

• What are the best ways for buyers to identify suppliers?



Proposal Solution

• Proposal solution is when qualified suppliers are invited to submit proposals

• What are some important tools for writing and researching a proposal?



Supplier Selection

• Supplier selection is when a buyer receives proposals and selects a supplier or suppliers

• What are the six attributes that meeting planners consider when selecting a location



Order-Routine Specification

• Order-routine specification when a buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies, warranties, and so on



Performance Review

• Performance review is when a buyer rates its satisfaction with suppliers, deciding whether to continue, modify, or drop the relationship



Group Business Markets• Conventions

• Association Meetings

• Corporate Meetings

• Incentive Travel

• SMERFs – Social, military, educational, religious, and fraternal organizations



Dealing with Meeting Planners

• The hotel salesperson must look for items that will create value for the meeting planner without creating costs or sacrificing revenue for the hotel

• Meeting planners expect timeliness and efficiency



The Corporate Account and Corporate Travel Manager

• Highly sought after segment

• 10% to 40%

• More likely to use hotel services (restaurants, laundry, etc.)



Best Practice

• Don Walter – Convention Liaison Council’s Hall of Leaders



Key Terms• Buying center

• Convention

• Corporate meeting

• Derived demand

• General need description ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens


Key Terms• Incentive travel

• Order-routine specification

• Organizational buying process

• Performance review

• Problem recognition ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens


Key Terms

• Product specification

• SMERF

• Supplier search

• Supplier selection©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens