Case 2 Analysis: Shopify
Shopify
Case
Questions for Discussion:
6-16: Compare and contrast the nature of the business market structure and demand relative to consumer market structure and demand for Shopify’s services.
6-17: Discuss how a potential client for Shopify might go through the business buyer decision.
6-18: How does the concept of the buying center apply to Shopify?
6-19: How much of a threat does competition pose in Shopify’s future?
2
This is a B2B sale, that facilitates the B2C sale for others.
Industrial demand caused by
consumer demand.
Derived Demand
Distribution and Organizational Marketing Lecture
6
THE BUYING
CENTER
6-18
BUYING CENTER MEMBERS
Marketing- When a purchasing decision has an effect on the
marketability of the firm’s product.
Manufacturing- Responsible for determining the feasibility
& economic considerations of producing end products.
Research & development- Involved in initial development
of products & processes & set broad specifications for
components & materials criteria.
General management- Top management is likely to be involved when the purchase situation is unusual.
Purchasing- Specialists with negotiation expertise & close working relationships with suppliers. They are generally dominant decision makers.
WHO MAKES ORGANIZATIONAL
BUYING DECISIONS?
Initiators: Perceive a problem /opportunity that may require
the purchase of a new product/service.
Users: People who must use or work with the product/service,
they often influence the purchase decision.
Influencers: Provide information for evaluating alternative
products & suppliers, they play a major role in
determining the specifications & the criteria to use.
Gatekeepers: Control the flow of information to other people
involved in the purchasing process.
Buyers: They have the authority to contact suppliers &
negotiate purchases.
Deciders: The person with the final authority to make a
purchase decision.
THE BUYING CENTER
Initiator: Recognizes that some company problem can be
solved by acquiring a product/service.
Gatekeeper: Problem or product expert.
Influencer: “Has a say” if purchase is made or not.
Deciders: People who say “yes” or “no” to purchase.
Purchaser: Concerned with obtaining product/service.
User: Concerned with using product/service.
TECHNICAL BUYING INFLUENCE
Role: To eliminate alternatives
Characteristics: Focuses on quantifiable
aspects of product & service
Gatekeeper
Can only say “no,” not “yes”
Focus: Product specifications
ECONOMIC BUYING INFLUENCE
Role: Gives final approval
Characteristics: Access to money
Can release money
Veto power
Focus: Total organization
Bottom line
Competition
Shopify: 31% Market Share
WooCommerce (8% and gaining)
Magneto
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