Buying determinates theory: describes behavior as due to the combined effects of four factors:

environmental factors such as government regulations and technology,

market factors such as size and numbers of competitors,
organizational factors, including company size, corporate culture and policies, and
individual factors such as age experience, and education of any individual person involved
in the decision.

Environmental Factors: are those characteristics of the world beyond the market level, and include the
economy, technology, political factors and social factors.
Market Factors: are the characteristics of the market that influence buyer behavior. Market factors
include the number and relative size of competitors and the number and relative size of customers in a
particular market.
Organizational Factors: are characteristics of the organization that influence buying behavior. They
include the size of the company, profitability, corporate culture, distribution of power, organizational
policy, and other factors.
Reward measurement systems are another set of organizational factors that influence buyer behavior,
as we discussed earlier. We also recognized organizational factors when we discussed the relative risk
associated with a purchase and when we examined the role that the type of organization could have on
the purchase process.
Individual factor: are demographic and psychographic factors that influence and individual buying
behavior, these factors can include age, education and title or organizational level of the buyer, or
psychological factors such as the propensity to take risks.
Role theory, suggests that people behave within a set of norms or expectations of others due to the role
in which they have been placed.
Autonomous: when a person makes a purchase decision alone for an organization.
DMU (decision making unit) :when more than one person is involved, the group of participants in the
company are called the buying center, or decision making unit.
Initiator starts the purchase process by recognizing the need, the decision maker is the person who
makes the final decision. Decision maker the person who makes the final decision. The controller
controls or sets the budget for the purchase. The purchasing agent is the person who actually makes the
purchase. Influencer are those individuals who seek to affect the decision makers final decision through
recommendations of which vendors to include or which products are best suited to solve the
organizations needs.
Time fragmentation: one characteristic of buying centers, the more people are involved for only short
period of time in the process the more fragmented the buying center is over time.

Vertical dimension: how many layers of management are involved.

Horizontal dimensions, how many departments are involved.
Formalization: degree to which purchasing tasks and roles are defined by written documents describing
procedures and policies. Formalization affects the latitude that a buying center member has in choosing
how to go about making the purchase.
Risk: is usually thought of in terms of the probability of an outcome and the importance or costs
associated with the outcome.
Financial risk / economic risk associated with the cost of the new product and with the potential for lost
revenue if the product breaks down or doesnt perform as advertised.
Performance risk: the risk that the product will not perform as intended.
Social risk: ego risk or risk that the purchase will not meet the approval of an important reference group.
Organizational buyer reduce their perceptions of risk in three ways. To reduce risk, buyers gather more
information, remain loyal to present suppliers, and or spread the risk, either to other members of the
firm or among suppliers.

Trust: is defined as the belief in the integrity, honesty, and reliability of another person, or in this case,
of a supplier.
Behavior choice theory states that buyers go though a choice process to arrive at decisions of how they
will buy, as opposed the choice process of what will be bought modeled as part of the buy brid. The first
decision is to decide what type of situation they are in. the second stage iof the choice process is to
evaluate personal relevance. In this stage, the buyer examines the reward structures, extrinsic and
intrinsic, associated with the situation as defined in stage one. The third stage the buyer assesses action
alternatives and requirements. In this stage, the buyers look at the amount of control over the tasks.

Extrinsic rewards: are those given by the organization (salary, promotion, etc.
Intrinsic rewards: are those that the buyers give themselves (feelings of satisfaction, for example. )
Self orientation is the degree to which the individual works to achieve personal benefit.
Both reward structures are present but their importance. Valence, will vary from individual to individual
depending on the strength of company and self orientation, as well as other factors.
Final stage of the model is the selection of a strategy. There are two types of strategies:
Offensive strategies: to maximize gain. And defensive strategies or strategies designed to minimize loss.

Company orientation is when individual work is achieved to benefit the company.

Empathic dialogue: is active listening and identification with customer concerns, resulting in customer
centered communication and problem solving.
Data warehousing uses centrally managed adata from all functional areas of the organization, formatted
to company standards, so that it may be accessed by authorized users through their personal computers
for queries, custom reports, and analysis.
Decil report: orders the firms customers from best to worst, on the basis of purchase volume for the
period, summarized by tenths.
Data mining, describes the process of using numerous query tools and exploratory techniques to extract
information from a database or data warehouse.
Focus groups bring a small group of customers together to discuss a specific topic or issue.
CLV (customer lifetime value: is an estimate of the net present value of the stream of benefits from a
customer, less the burdens of servicing the account or managing the relationship.
Market penetration: that is endeavor to gain a larger share of the market in which it currently competes
with its existing products.
Product development: trying to serve customers in markets where it already has a presence with a new
array of products.
Market development: is the counterpart current products are taken to new markets.
Diversification: an aim to serve new markets with new products, just as BBI added a management
consulting service to its burke instutte seminars.
Synergy means that thte whole is greater than the sum of its parts.
Mission statement: a formal expression of why the organization exists. This sense of purpose works well
to frame key strategies and day to day decisions. IT also helps with the enculturation process needed
when new employees join the firm or two firms merge.
Conceptual mapping: is a picture of abstract ideas, options, persons or companies on two or three key
variables.
Five forces of competition:
1. Rivalry among firms in the industry
2. Powerful customers
3. Powerful suppliers

4. Threat of substitutes
5. Threat of potential entrants
Barriers of entry: are the obstacles of peotential entrants must overcome in order to compete in a
market.
Market orientation : is the systematic gathering of information on customers and competition, both
present and potential, the systematic analysis of the information for the puropose of developing market
knowledge and the systematic user of such knowledge to guide strategy recognition, understanding
creating, selection.
SIC (standard industrial calisfication) were developed by the US gov. to collect a disseminated
meaningful information on different sectors of the economy.
NAIC North amercian industrial classification system, establishes a common code between the US
Canada and mexico,

Marketing sensing: anticipating market requirements ahead of competition. Gathering of information

from the market.
Spanning: processes that link internal processes with the customer. New product devolement is on e
such spanning process, as it links market requirements with internal processes sucha as manufacturing.
All companies have new product development process, the difference si how the process incorporates
the voice of the customer.
Internal partnering or creating partnering relationships with other functional areas can also serve to
carry market requirements to choose managers in charge of internal processes. Internal partnering is a
spanning process that creates a framework or environment for other spanning processes, such as postal
service, new product development, or market penetration and development processes.

Barriers to Internal Partnering one barrier is having too strong and internoal focus in a
department.

- Made to stock: marketing supplies forecasts of demand and manufacturing makes enough to
handel that demand. The company then draws on inventory to fill orders as they come in.
, made to order: means that manufacturing or production begins making the product after
receiving an order.

, Engineer to Order is to complete customization, with the product designed from scratchc to
meet the customer needs.
financial

purchasing.
204. Organizational Structure: Marketing Partners, Functional Structures

, CFT customer focused team: formalizes communication between parts of the organization that
should be communication anyways.
207: Organizational Learning: is the process of developming new knowledge that has the
potential to influence behavior.
/ Competitive Advantage: Organizational Learning,
Cognitive Mapping: is a learning tootl that is used to explore mental structures of blelief and
assumption. c
, Experiments, Scenerios, Case Studies.