Marketing Management

Environmental factors-- such as economic, political, regulatory, competitive, and technological considerations influence business buying decisions. Passage of a law freezing cable rates would affect demand, as would an introduction of a less expensive decoder box by a competitor. Finally, technology plays a role in purchase decisions. A few years ago, cable-ready televisions decreased demand for set-top boxes, and smaller, more powerful satellite dishes have cut into the market for cable TV, reducing derived demand. But customers still need the boxes to access premium channels and movies, even with digital service. CableBox can benefit from technological advances, too. As more homes want fast Internet connections, adding cable modems to its product line may present a growth opportunity.

Organizational Factors-- can be centralized or decentralized. Centralized buying tends to emphasize long-term relationships, whereas decentralized buying, which delegates purchasing decisions to divisional or geographic units, focuses more on short-term results. A company that practices empowerment will rely on decentralized buying.

How many suppliers should a company patronize? Many companies engage in multiple sourcing--purchasing from several vendors. Spreading orders ensures against shortages if one vendor cannot deliver on schedule. However, dealing with many sellers can be counter-productive and take too much time.

Interpersonal Influences-- involve both group and individual forces here. When committees handle buying, they must spend time to gain majority or unanimous approval. Individual buyers, on the other hand, rely on individual preferences, experiences, and biases. To choose a supplier for an industrial press, for example, a purchasing manager and representatives of the company's production, engineering, and quality control departments may jointly decide on a supplier. Each of these principals may have a different point of view that the vendor's marketers must understand.

Boise Cascade, a manufacturer of paper, corrugated containers, and wood products, and distributes office products and building materials, in collaboration with a training company, ran a marketing campaign to encourage companies to use its catalog and online service as a single source for office supplies. A color flyer was included with its direct-mail catalog, which reached 300,000 potential business buyers. The flyer was designed to appeal to Boise's end users--administrative assistants. A focal point of the campaign was an online personality assessment that allowed catalog users to gain a better understanding of themselves and their coworkers by "color-typing" their personalities. Then it gave tips on how best to work with other color types. The flyer was so popular that administrative assistants passed it round the office, along with the Boise catalog, creating