1. Ch. 3: Organizational Buying and Buying Behavior

2. Consumer Decision Process
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Post Purchase Behavior

3. The Buying Center External Factors Customer needs and buying behavior
Internal Factors
Technology Accounting
Management Marketing
Legal Production/Mfg.
Finance Service
External Factors
Customer needs and buying behavior
Government agencies
Independent standards-setting organizations
Various
Publics
Stakeholders in each discipline within the buying organization contribute expertise such that internal and external factors are accommodated.

4. Organization Buying Vs. Consumer Buying
Involves more Buyers
Stakeholders in Buying Center driven by professional responsibilities
Different decisions occurring simultaneously within the Buying Center

5. “Traditional” B2B 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. Factors of the Buying Decision Process
Interaction is fluid and broad based
Process is simultaneous not sequential
The “Track-Record” determines if supplier is included in evoked set
Relationships build loyalty

7. The Buying Center: Members must meet 3 needs in the decision process:
Organizations Needs
Benefits of the product or service
Individual Needs
Based on professional activities and functions of the job
Individual’s Personal Needs
Career, Quality of life, Recognition

8. Process Flow Model of Buying Decision Process
Process Flow Stages
Buying Decision Process - Steps
Definition Stage
Problem recognition
General need description
Product specification
Selection Stage
Supplier/Source Search
Proposal Solicitation
Contract for supplier(s)
Deliver Selection Stage
Make the transaction routine
End Game Stage
Evaluate performance
Resell the job

9. Process Flow Model of Buying Decision Process: Definition Stage
The first attempt at describing a solution
The intricacy of the solution and the number of organizational units to be involved (size of the buying center) is determined.
Successful suppliers are involved, often in the development of the Product Specification

10. Process Flow Model of Buying Decision Process: Selection Stage
Selection may have occurred in the Definition Stage.
If a new buy, members of the buying center may have a “favorite” supplier.
A modified or straight rebuy will likely include the existing suppliers.

11. Process Flow Model of Buying Decision Process: Deliver Solution Stage
Development activities customize the solution to the specific technical and other needs of the customer – the Total Offering.
Meet the customer’s “way of buying” process – integration of supply logistics with consumption logistics.

12. Process Flow Model of Buying Decision Process: End Game Stage
Reinforce customer decisions made in the selection process.
Not the end of the process, but the beginning of the next opportunity for the supplier to serve the customer.

13. Typical Re-Buy Situation
Straight Re-Buy
Buying situation that is routine
Established solutions
Modified Re-Buy
Situation from New-Task Situation
Limit exposure from competitive forces

14. Typical New Task Situation
A need not yet faced by Organization
New offering with new technology
Seek many sources of information and assistance
Utilize complete buying process to investigate alternatives

15. New Task to Straight Rebuy
Yes. Then next purchase
New Task
Definition
No. Then next purchase
Rebuy
Definition
Selection
Solution
Delivery
End Game
Selection
Is the buyer satisfied?
Solution
Delivery
End Game

16. Define changes to process Satisfied, No differences
Complex Rebuy
Modified Rebuy
Straight Rebuy
Definition
Selection
Solution
Delivery
End Game
Definition
Define changes to process
Satisfied, No differences
Selection
Dissatisfied
Solution
Delivery
Small Difference
yes no
Is the buyer satisfied?
How different is
the next situation?
End Game
Evaluation in End Game
Large Difference
To New Task
Ch3Exhibit6.ppt
2/23/01

17. 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.