4.8 Key Terms

A Postpurchase Evaluation is Conducted and The Feedback Provided to The Vendor: Just as consumers go through an evaluation period after they purchase goods and services, so do businesses. 4.4

An Order Routine is Established: This is the stage in which the actual order is put together. The order includes the agreed-upon price, quantities, expected time of delivery, return policies, warranties, and any other terms of negotiation.^[1]. 4.4

A Need is Recognized: Someone recognizes that the organization has a need that can be solved by purchasing a good or service. 4.4

B2B Auctions: Web-based auctions that occur between businesses. 4.5

B2B Exchanges: E-commerce sites where multiple buyers and sellers go to find and do business with one another. 4.5

B2B Buying Process: The need is described and quantified. Qualified suppliers are searched for, and each qualified supplier is sent a request for proposal (RFP), which is an invitation to submit a bid to supply the good or service. The proposals suppliers submit are evaluated, one or more supplier(s) selected, and an order routine with each is established. A postpurchase evaluation is later conducted and the feedback provided to the suppliers. The buying stages an organization goes through often depend on the buying situation—whether it’s a straight rebuy, new buy, or modified rebuy. 4.4

Business-To-Government (B2G) Markets: When companies sell to local, state, and federal governments, represent a major selling opportunity, even for smaller sellers. 4.2

Buying Centres: Groups of people within organizations who make purchasing decisions. 4.3

Derived Demand: Demand that springs from, or is derived from, a source other than the primary buyer of a product. 4.1

E-Commerce: Commerce conducted electronically, such as over the Internet. 4.5

Buy-Side Site: One in which a business buys products from multiple sellers that go there to do business with the firm. Some government agencies have buy-side sites. 4.5

Decider: Is the person who makes the final purchasing decision. The decider might or might not be the purchasing manager. 4.3

Fluctuating Demand: Is a characteristic of B2B markets and  a small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it. 4.1

Gatekeepers: People who will decide if and when you get access to members of the buying center. 4.3

Initiators: People within the organization who first see the need for the product. 4.3

Institutional Markets: Include nonprofit organizations such as the American Red Cross, churches, hospitals, charitable organizations, private colleges, civic clubs, and so on. 4.2

Joint Demand: It occurs when the demand for one product increases the demand for another. 4.1

Modified Rebuy: Occurs when a company wants to buy the same type of product it has in the past but make some modifications to it. 4.4

Potential Suppliers Are Searched For: At this stage, the people involved in the buying process seek out information about the products they are looking for and the vendors that can supply them. 4.4

Producers: Companies that purchase goods and services that they transform into other products. 4.2

Qualified Suppliers Are Asked to Complete Responses to Requests for Proposal (RFPs): Each vendor that makes the cut is sent a request for proposal (RFP), which is an invitation to submit a bid to supply the good or service. 4.4

Request for Proposal (RFP): Outlines what the vendor is able to offer in terms of its product—its quality, price, financing, delivery, after-sales service, whether it can be customized or returned, and even the product’s disposal, in some cases. 4.4

Resellers: Companies that sell goods and services produced by other firms without materially changing them. 4.2

Reverse Auctions: Roles of the buyers and sellers are reversed in buy-side auctions. 4.5

Sell-side site: A site in which a single seller sells products to many different buyers. 4.5

Straight Rebuy: A situation in which a purchaser buys the same product in the same quantities from the same vendor. 4.4

The Need is Described and Quantified: The buying center, or group of people brought together to help make the buying decision, work to put some parameters around what needs to be purchased. 4.4

The Proposals are Evaluated and Supplier(s) Selected: During this stage, the RFPs are reviewed and the vendor or vendors selected. RFPs are best evaluated if the members agree on the criteria being evaluated and the importance of each. 4.4

Users: The people and groups within the organization that actually use the product. 4.3