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Industrial Marketing: Organisational Buyer Behaviour

The document discusses organizational buyer behavior and purchasing functions. It covers the goals of purchasing, factors that influence total cost and complexity, different buying situations, forces that influence organizational buying behavior, and frameworks for understanding organizational buying situations. It also discusses relationship marketing, different types of buyer-seller relationships, and strategies for developing relationships with customers.

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JayRavasa
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80 views29 pages

Industrial Marketing: Organisational Buyer Behaviour

The document discusses organizational buyer behavior and purchasing functions. It covers the goals of purchasing, factors that influence total cost and complexity, different buying situations, forces that influence organizational buying behavior, and frameworks for understanding organizational buying situations. It also discusses relationship marketing, different types of buyer-seller relationships, and strategies for developing relationships with customers.

Uploaded by

JayRavasa
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Industrial Marketing

Organisational Buyer Behaviour

Purchasing Function Goals


To address the needs of business customers of all types. May have to juggle a number of different objectives that clash.
The Goals of Purchasing

Total Cost Considerations of a


Product or Service
Factors that drive total cost.
Acquiring and managing costs. Quality, reliability over the life cycle. The value a firm/ customers.

Procurement Complexity Considerations


Technical complexity. Scope of supply chain coordination required. Degree to which life cycle costs are relevant.

Government Procurement
1. Defense-said to be the largest enterprise 1. Other Governmental-procurement is administered by variety of agencies. 2. These are guided by detailed written procedures

Three Buying Situations


(slide 1 of 4)

1. New task 2. Modified rebuy 3. Straight rebuy

Three Buying Situations


1. New Task (slide 2 of 4)
New taskthe problem or need is totally different from previous experiences.
Significant amount of information is required. Buyers operate in the extensive problem solving stage.
Buyers lack well defined criteria. Lack strong predispositions toward a solution.

Three Buying Situations


2. Modified Rebuy (slide 3 of 4)
Modified rebuydecision makers feel there are benefits to be derived by reevaluating alternatives.
Most likely to occur when displeased with the performance of current supplier. Buyers operate in the limited problem solving stage.
Buyers have well defined criteria.

Three Buying Situations


3. Straight rebuy (slide 4 of 4)
Straight rebuythe problem or need is a recurring or continuing situation.
Buyers have experience in the area in question. Require little or no new information. Buyers operate in the routine problem solving stage.

Buying Decision Approaches


Causal purchasesinvolve no information search or analysis.

Routine low prioritydecisions are more important and involve a moderate amount of analysis.

Forces Influencing Organizational Economic Outlook: A projected change in Buying Behavior Domestic & Global
business conditions can drastically alter buying plan.

Environmental Forces

Pace of Technological Change Global Trade Relations Goals, Objectives, and Strategies Organizational Position of Purchasing Roles, relative influence, and patterns of interaction of buying decision participants Job function, past experience, and buying motives of individual decision participants

Organizational Buying Behavior

Organizational Forces

Group Forces

Individual Forces

The Buygrid Framework for Organizational Buying Situations

With rising competitive pressures managers are using rigorous cost modeling approaches to identify factors that drive the cost of purchased goods and services.

Questions for the Industrial Salesperson


1. Which member takes part in the buying process? 2. What is each members relative influence in the decision? 3. What criteria is important to members in the evaluation process?

Members of the buying center assume different roles throughout the procurement process.

Clues for Identifying Powerful Buying Center Members

Selective Process & Cognition


Selective exposure. Selective attention. Selective perception. Selective retention.

Perceived Risk Components


1. Uncertainty about the outcomes of a decision. 2. The magnitude of consequences associated with making the wrong selection.

Relationship Marketing
Centers On:
Establishing, Developing and Maintaining Successful exchanges with customers.

Stages of Relationship Marketing


1. Selecting customer accounts. 2. Developing account specific offerings. 3. Implementing relationships strategies. 4. Evaluating relationship strategy outcomes.

Collaborative Exchange Involves


Features close information, social, and operational linkages as well as mutual commitments.

Transactional Exchange
Centers on timely exchange of basic products for highly competitive market prices.

Types of Relationships
The buyer seller relationships are positioned on a continuum with transactional exchange and collaborative exchange serving as the end points.
The Relationship Spectrum

Relationship-Specific Adaptations Involve:


Investments in processes.
Investments in products. Investments in procedures.

Market & Situational Factors


(Slide 1 of 2)

1. Supply Market Dynamismconsiders the variability in a firms supply market.


Typical Variations
changing technology frequent price changes product shortages

Market & Situational Factors


(Slide 2 of 2)

2. Availability of Alternativesthe degree to which alternative sources are available.

Buyers and sellers craft different types of relationships in response to: a) market conditions and b) characteristics of the purchase situation.

The Spectrum of Buyer-Seller Relationships

Strategy Guidelines
1. Determine which type of relationship matches the purchasing situation and supply markets conditions for a particular customer.

2. Develop a strategy that is appropriate for each strategy type.

Strategy Guidelines & Customer


Collaborative Customers. Transactional Customers.

Earning Customer Loyalty:


How To
Provide superior value ensuring high satisfaction. Nurturing trust and mutual commitments.

Retaining Customers Through:


Evaluating relationships. Demonstrating commitment.

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