a
Vitale
nd Gig
lierano
diti
2002 E
on
Chapter 3
Organizational Buying and Buyer Behavior
Prepared by John T. Drea, Western Illinois University
1
The Consumer Buying Decision Process
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Involvement
influences whether
some steps are
de-emphasized or
extended.
This is more of a
simultaneous than
a sequential
process.
Postpurchase Behavior
2
Organizational Buying
• Organizational buying involves many inputs
from professional specialists within the
organization.
• The organization relies on inputs from
decision makers and influencers
(“stakeholders”) to satisfy the diverse set of
needs within the organization.
• This requires communication among
stakeholders in the buying organization.
3
1
The Buying Center
r ne
me g
o
t
s
Cu buyin
and avior
beh
ent
nm
ver es
o
G n ci
age
eds
External Factors
Inde
stan penden
d
sett ards- t
Internal Factors
ing
o
Technology Accounting rganiz
atio
ns
Management Marketing
Legal
Production/Mfg.
Va r
Finance
Service
io
Pu b u s
lics
4
Major Differences, Organization Buying
vs. Consumer Buying
• Organizational buying involves more buyers –
more decision makers or contributors to
portions of the decisions.
• Participants (stakeholders) in the buying
center are driven by the specific needs of
their professional responsibilities.
• Different types of decisions are often
occurring simultaneously in the process,
spread throughout the buying organization.
5
Steps in the Buying Decision Process
1. Problem recognition
2. General need description
3. Product specification
4. Supplier/Source search
5. Proposal Solicitation
6. Selection
7. Make the transaction routine
8. Evaluate performance
6
2
Intricacies of the Buying Decision Process
Individual roles and
personal needs
Interaction creates
fluidity (people w/in
the buying center
interact)
The buying process
is simultaneous, not
sequential
Relationships
and loyalty
Three kinds of needs:
1. Need for product
benefits
2. Individual needs
w/in buying center
3. Buying center
member’s
personal needs
Cluster of stakeholders’ values
7
Stages in the Process Flow Model of the
Buying Decision Process: Definition Stage
• Process Flow
Stages
– Problem definition
– Solution definition
– Problem
specification
• Buying Decision
Process Steps
– Problem recognition
– General need
description
– Problem
specification
8
Stages in the Process Flow Model of the
Buying Decision Process: Selection Stage
• Process Flow
Stages
– Solution provider
search
– Acquire solution
provider(s)
• Buying Decision
Process Steps
– Supplier/Source
search
– Proposal solicitation
– Contract for
supplier(s)
9
3
Stages in the Process Flow Model of the Buying
Decision Process: Deliver Solution Stage
• Process Flow
Stages
– Customize as
needed
– Install/Test/Train
• Buying Decision
Process Steps
– Make the transaction
routine
10
Stages in the Process Flow Model of the Buying
Decision Process: End Game Stage
• Process Flow
Stages
–
–
–
–
Operate solution
Reach end result
Evaluate outcomes
Determine next set
of needs
• Buying Decision
Process Steps
– Evaluate outcomes
– Resell the job
11
Stage 1: Problem Recognition
New
New
Task
Task
A buying situation that has not been previously
faced by the organization.
•Significantly steep learning curve, organization
seeks many sources of information.
Modified
Modified
Rebuy
Rebuy
A buying situation that is somewhat similar to past
problems/solutions
•Examines alternatives within a limited scope,
involves fewer people than a new task situation and
more than a straight rebuy.
Straight
Straight
Rebuy
Rebuy
A routine buying situation with established solutions.
•Abbreviated steps in the process, fewer people in
the buying center, less time to completion.
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4
Stage 2: Vendor Selection
• RFQ = Request for Quotation
– Usually associated with that which can be
thoroughly and quantitatively defined
• RFP = Request for Proposal
– Usually defined by a set of specifications that have
more flexibility regarding the final form of the
offering
• For government purchases, RFP/RFQ are
often published in a specified outlet.
13
Stage 3: Solution Delivery
• Often takes longer than definition and
selection combined.
• Stage ends when delivery is complete
and approved by the buyer.
• Involves merging the logistics of the
buyer with the logistics of the customer.
14
Stage 4: End Game
• Buying organizations frequently formally
evaluate purchase outcomes in terms of
areas like
–
–
–
–
Market share
Position
Market ownership
Profitability
• Individual buying center members also may
evaluate the purchase, the purchase process,
and the supplier.
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5
Organization and Individuals Needs in the
Buying Decision Process
Steps in Flow
Organizational Needs
Individual Needs
Define problem
Define solution
Acquire provider
Develop solution
Install, test, train
Operate solution
End result
Evaluation outcomes
Clear, concise, tractable
Appropriate, affordable
Choice, speed,
Speed, easy use
Ease of integration, speed
User friendly
Effective, low cost
Information
Information & time
Design assistance
Information, assurance
Execution help
Knowledge, comfort
Easy to maintain
Recognition
Communication, reward
16
Buying
Decision
Evolution
17
More Buying Decision Evolution
18
6
Variability of Rational Buying
Human
HumanFactors
Factors
•Objective means are used to narrow choices.
•Suppliers who recognize cultural/relationship
needs of the organization become the “in”
supplier.
•A review of facts is often done because it is
culturally acceptable.
•Facts can be arranged to justify the decisions
that individuals want to make
•People seek reinforcement for their beliefs in
every factor presented to them
19
Variability of Rational Buying
Mutual
MutualDependence
Dependenceand
andCustomer
CustomerLoyalty
Loyalty
•Long-term commitment increase both risk and
rewards for both parties involved.
•When both vendor and customer share financial
interests that favor cooperation, there is greater
motivation to continue the relationship through
difficult times.
20
Value Image
• Value Image
– It is the total of all impressions that a
customer has of the firm (whether relevant
to the buying situation).
– Value image is similar to product
positioning that occurs with consumer
goods.
– Need to maximize the value image of the
offering in the “mind” of the buyer.
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