4
ORGANISATIONAL
BUYING
BEHAVIOUR
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Organisational buying behaviour
At the end of this session, you should understand:
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•
•
•
•
•
•
The nature and types of business markets
The influences on business market buying behaviour and
demand
The business buying decision process
The types of business buying decisions (straight rebuy,
modified rebuy, new task buying)
The influence of the buying centre on purchase decision
making
The application of relationship marketing in business markets
The role of the Internet in business-to-business (B2B)
marketing
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-2
What is organisational (business to
business) buying?
• Business markets use the products or services
they buy to produce or trade their own products or
services
• Consumer markets make purchases for personal
consumption
• Three main differences exist between consumer
and business decision making
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–
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Nature of demand
Composition of the business market
Motives of the buyers in each market
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-3
The business decision-making
process
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-4
The scope of the business market
• Agriculture
• Mining
• Construction
• Manufacturing
• Transport
• Wholesale and retail trade
• Finance, insurance, real estate
• Government
• Non-profit organisations
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-5
Marketing to B2B
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Innovative B2B promotions
can gain attention
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•
Bankwest targets business
with pizza delivery
See EXHIBIT 4.2 Optus targets
businesses, page 97.
PowerPoint slides supplied on the
Instructor Resource CD to accompany
Consumer Behaviour include
advertisement images.
Successful marketing to the
agriculture sector
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Product focus combats
lower price
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-6
The nature of business markets
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Organisational buyers have different needs and buying
patterns across different buying situations
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Vary primarily from consumers through type of customer,
reason for buying or product usage
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e.g. medical purchase of simple box of rubber gloves vs complex purchase of
an X-ray machine
See Exhibit 4.2 previous slide
B2B
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Purchase inputs to make other goods and services
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Resell purchases to other business users or consumers
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e.g. sugar and flavouring as inputs for Coca-Cola
e.g. Woolworths
Use purchases to conduct business

e.g. stationery, legal services, marketing services
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-7
Organisational buyers and
consumers
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-8
Purchase decision making in
business markets
• Buying is often a group process
• Buying is less frequent and in large quantities
• Negotiation period is often prolonged
• Customer service is frequently a main requirement
• Consistency of quality and supply are important
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-9
Types of buying situations
• New task rebuy
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A similar purchase decision has never been made
• A modified rebuy
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A similar purchase decision has been made before
but this time modifications to the purchase are
needed or a new supplier is to be chosen
• A straight rebuy
–
A routine purchase that has been made many times
before
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-10
Business market demand
• Consumer demand is influenced by marketing
environment factors, such as
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Interest rate, social trends, marketing communications
• Demand for business goods incorporates four
main considerations
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Demand is derived from the underlying consumer
demand for its goods and services
Demand is relatively inelastic to changes in price
Demand can fluctuate widely
Business market buyers are well informed
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-11
Buying motives
• Assumptions exist that B2B buying motives are
rational, methodical and objective
• However, personal factors also play a part:
relationships, self advancement
• Primary motivators include
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Cost and profit-related benefits
Ongoing promotional support
Ability to generate store traffic
Improvements in productivity
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-12
Organisational buying criteria and
motives
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-13
Multiple buying influences
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Buying centre
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•
Users
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Make the actual buying decision: purchasing officer,
management, product/service user
Gatekeepers
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Have a direct or indirect influence on the purchase decision due
to some technical knowledge, financial power or other factor
Deciders
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The people who actually use the product e.g. safety goggles
Influencers
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A group of individuals involved in the purchase decision making
Control the flow of information
Buyers
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Select the suppliers and negotiate the terms of agreement
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-14
Relationship marketing in business
markets
• Relationship marketing
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All marketing activities directed toward establishing,
developing and maintaining successful exchanges
with customers
• Create a ‘value proposition’
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Strategies should include use of specific competencies
to create better value for customers
• Customer relationship management (CRM)
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Maximising customer retention rates and share of
individual customer’s business
Past behaviour is important in CRM
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-15
Factors influencing growth of
relationship marketing
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1970s increased global competition, forcing adoption
of defensive strategies
1980s and 1990s growth in services marketing based
on direct relationships, leading to a professional focus
in this area
Adoption of the ‘value chain’ approach by Japanese
businesses
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A link of value-creating activities producing maximum
efficiency across all areas
The future for relationship marketing
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Increased use of the Internet
– Increasing costs servicing unprofitable customers, leading
to a focus on better servicing other customers
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-16
Trends in organisational buying
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-17
Measuring CRM programs
• Key measurement programs for a customer
satisfaction system in the B2B market
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-18
‘Autocratic management versus the
buying group’
• Case study:
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Autocratic management versus the buying group
• Read the above case study and discuss the
associated questions
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
4-19