Organizational Buying Behavior Chapter 3

Supplier-Buyer Relationship Why work closely? Why work closely? How? How?

Organizational Buying Process Problem Recognition Problem Recognition General Description of Need General Description of Need Product Specifications Product Specifications Supplier Search Supplier Search Acquisition and Analysis of Proposals Acquisition and Analysis of Proposals Supplier Selection Supplier Selection Selection of Order Routine Selection of Order Routine

Purchase Types New Task New Task Problem or need is different from anything previously experienced Problem or need is different from anything previously experienced Lack well-defined criteria and supplier loyalty Lack well-defined criteria and supplier loyalty Buying decision approaches Buying decision approaches Judgmental new task situations Judgmental new task situations Strategic new task decisions Strategic new task decisions Business Marketer Strategy Business Marketer Strategy

Purchase Types Straight Rebuy Straight Rebuy Continuing or recurring requirements Continuing or recurring requirements Routine problem solving Routine problem solving Operational resources Operational resources Buying decision approaches Buying decision approaches Causal purchases Causal purchases Routine low priority Routine low priority Business Marketer Strategy Business Marketer Strategy In-supplier In-supplier Out-supplier Out-supplier

Purchase Types Modified Rebuy Modified Rebuy Believe can derive significant benefits by reevaluating alternatives Believe can derive significant benefits by reevaluating alternatives Limited problem solving Limited problem solving Buying decision approaches Buying decision approaches Simple modified rebuy Simple modified rebuy Complex modified rebuy Complex modified rebuy Business Marketer Strategy Business Marketer Strategy In-supplier In-supplier Out-supplier Out-supplier

Forces Shaping Organizational Buying Behavior Environmental Forces Environmental Forces Organizational Forces Organizational Forces Group Forces Group Forces Individual Forces Individual Forces

Forces on Organizational Buying Environmental Forces Environmental Forces Economic influences Economic influences ↓economy= ↓economy= Selective shifts Selective shifts Technological influences Technological influences Foresee changes Foresee changes

Forces on Organizational Buying Organizational Forces Organizational Forces Role of purchasing agents Role of purchasing agents Should it be centralized? Should it be centralized? Benefits Benefits Better integrate purchasing Better integrate purchasing Cut costs Cut costs Favorable terms Favorable terms Work better with engineers Work better with engineers Specialization Specialization When to centralize or decentralize? When to centralize or decentralize?

Forces on Organizational Buying Group Forces Group Forces Buying Center Buying Center Different people play different roles Different people play different roles New task New task Straight rebuy/modified rebuy Straight rebuy/modified rebuy Predicting Composition Predicting Composition Why? Why?

Forces on Organizational Buying Group Forces (cont’d) Group Forces (cont’d) Buying center influences Buying center influences Users Users Gatekeepers Gatekeepers Influencers Influencers Deciders Deciders Buyers Buyers Identifying patterns of behavior Identifying patterns of behavior Isolate personal stakeholders Isolate personal stakeholders Follow flow of information Follow flow of information Identify experts Identify experts Trace connections to the top Trace connections to the top Understand purchasing’s role Understand purchasing’s role

Individual Forces Differing Evaluative Criteria Differing Evaluative Criteria Responsive Marketing Strategy Responsive Marketing Strategy Information-processing Information-processing Selective processing Selective processing Selective exposure Selective exposure Selective attention Selective attention Selective perception Selective perception Selective retention Selective retention Risk-reduction strategies Risk-reduction strategies Perceived risk Perceived risk Two components Two components