7.2.1 Types of Buying Situations
7.2.2 The Purchase Decision Making Process
7.2.3 Marketing Implications of Different Organisational Purchasing Situations


  1. ^ more complicated process - government procurement
  2. ^ usually awarded to the lowest bidder
  3. ^ ‘cost-plus’ contract basis
  4. ^ separate government marketing departments or sales teams
  5. ^ competitive intelligence

Federal, state, and local governments and their various agencies are major buyersof many goods and services. However, a government’s purchasing processestend to be different in some respects from those of a business organisation. Forone thing, government organisations[1] tend to require more documentation andpaperwork from their suppliers because their spending decisions are subject topublic review. Thus, although most governments providewould-be suppliers withdetailed guides describing their procedures and requirements, some supplierscomplain about excessive bureaucracy, costly paperwork, and red tape.

Another difference is that government organisations typically require suppliersto submit bids, and contracts are [2] usually awarded to the lowest bidder whomeets the minimum standards specified in the contract. In some cases, though, agovernment unit will make allowances for a supplier’s superior product quality orcustomer service.

They also sometimes purchase on a negotiated or [3] ‘cost-plus’ contract basis, particularly when the product being purchased will require a lengthydevelopment period (a hydroelectric dam) or major and uncertain R&D investments(a new weapons system), or when there are few alternative suppliers tocompete for the contract.T

T hese differences in governmental purchasing processes make many standardmarketing strategies and tools less relevant and effective than in other organisationalmarkets.

For example, since a government purchase contract usuallydescribes the desired product specifications in great detail, and since contractsare usually awarded to the lowest bidder,
a strategy of product differentiation viasuperior features or performance would not likely be successful, particularly if itresulted in higher costs.

For the same reason, comparative advertising appeals orpersonal sales demonstrations have little impact. Nevertheless, many organisations have created [4] separate government marketing departments or sales teams.

Their task is to anticipate government needs and projects, participate in or influence the
development of product specifications, gather [5] competitive intelligence, carefullyprepare bids, and expedite postsale activities and services.21
The lessons learned in selling to governments may become much more relevant in private-sector marketsas Web-based buyers’ auctions for standardised materials and components proliferated

  1. client contact systems
  2. collector bias
  3. competitive advantage
  4. competitive intelligence
  5. computerised reorder system
  6. consumer behaviour
  7. data sources
  8. evidence based forecast
  9. experienced user
  10. internal records
  11. just in time
  12. logistical alliance
  13. market potential
  14. market segmentation
  15. market segments
  16. marketing program
  17. marketing research
  18. mass market
  19. mass market strategy
  20. michelin; us west;
  21. micro segmentation
  22. middleman
  23. modified rebuy
  24. multi-functional sales teams
  25. multilevel selling
  26. multiple buying
  27. multiple level relationships
  28. mutual trust
  29. narrow market segment
  30. narrow niche
  31. nationalisation of producers
  32. nerve center
  33. new task buy
  34. nine west group
  35. observation;direct observation' tanzania mobile;
  36. on-time delivery
  37. opportunity; research
  38. order handling
  39. organisation market
  40. organization marketing behaviour
  41. organizational behaviour
  42. organizational customers
  43. organizational demand
  44. organizational market
  45. organizational purchasing behaviour
  46. organizational purchasing process
  47. paperless exchange
  48. parity pricing
  49. personal selling
  50. personal use
  51. political risk
  52. potential market; penetrated market
  53. pre-delivery inspection
  54. pre-sale service
  55. prestige buyer
  56. pretender
  57. primary data
  58. procurement costs
  59. purchasing criteria
  60. qualitative data
  61. qualitative research
  62. quality assurance
  63. quality standards
  64. quantitative data
  65. quantitative research
  66. research objectives
  67. retention programme
  68. routine purchase
  69. sales forecast
  70. semantic differentiation scale
  71. sequence of information
  72. shared costs
  73. short term contracts
  74. social construction
  75. status oriented consumers
  76. stock availability
  77. straight rebuy
  78. supplier bargaining power
  79. supplier performance
  80. supplier reputation
  81. survey
  82. tabulation errors
  83. tanzania mobile
  84. target customers
  85. target market
  86. target marketing
  87. technical experts;
  88. test markets
  89. transaction cost
  90. trend forecasting
  91. trusting patron
  92. underlying consumer demand
  93. unethical demands
  94. unstated but implicit assumptions
  95. users
  96. value analysis
  97. value shopper
  98. vertical integration
  99. visceral thing that cannot be trained
  100. wild guess