Page 90 - DMGT408DMGT203_Marketing Management

Unit 4: Business Markets and Business Buyer Behaviour

Finally, non-profit institutions like charities, trusts, green clubs, and social clubs buy products like Notes
food items, clothing items, furniture, books, in huge quantities.

Example: CRY would probably buy thousands of reams of paper every year to print
their cards.

4.1.1 Traders

A trader is a businessman who trades in commodities that he did not produce himself, in order
to earn a profit. Traders can be one of two types:
1. A wholesale trader operates in the chain between producer and retail merchant. Some
wholesale merchants only organize the movement of goods rather than move the goods
themselves.

2. A retail trader or retailer sells commodities to consumers (including businesses). A shop
owner is a retail trader.
A trader buys products from the wholesalers and sometimes, directly from the manufacturers.
A trader buys the products and stocks them as inventory.

4.1.2 Manufacturers

They are also called “Original Equipment Manufacturer”. When commercial enterprises buy
products to incorporate in their final products, it is termed as OEM.

Example: Intel Pentium chips for IBM notebooks or MRF tyres for Maruti 800 vehicles.
In an oligopolistic market, OEM’s are generally the largest volume users of goods. Also, an
important thing that needs to be noted here is that both MRF and Intel offer products to the
customers in the replacement market or after market, through industrial distributors.

Example: If MRF is supplying tyres to Maruti, MRF will be called as OEM parts suppliers.
Component part suppliers must meet specification and also ensure quality, reliability and JIT
delivery.

4.1.3 Service Buyers

Companies in the service sector also need equipments for providing services.

Example: A bank would need computers, furniture, fax machines, fixtures, flooring,
fans, ACs, pens, papers, staplers etc. to run their business.

4.1.4 Systems Buyers

Many business buyers prefer to buy a total solution to a problem from one seller called Systems
Buying. Many companies buy total software packages from one company.

Example: Some companies buy SCM software, some buy ERP software, some buy supplier
relationship software etc. from different suppliers. They are called system buyers.

LOVELY PROFESSIONAL UNIVERSITY 83