1. BUYING BEHAVIOR CONSUMER vs ORGANIZATION

2. Organisational / Corporation Consumer / Retail FewerMuch more Close, Long-term relationshipFar, Short-term relationship More rationalMore emotional Specific RequirementGeneral Requirement Reciprocal buyingOne Way Buying More riskyNot risky More ComplexSimple Negotiation (professional)Bargain Differences Between Organizational & Consumer Buying Behavior

3. Fewer organisational buyers Generally, a company marketing industrial products will have fewer potential buyers than a marketing in consumer markets. This means that one customer in the industrial marketer is far importance than the consumer buyer.

4. Close, long-term relationships between organisational buyers and sellers Because of the importance of large customers it makes sense for suppliers to invest in long-term relationships with them. The nature of relationships is: –customers and manufacturers rarely meet, –and brand switching is common.

5. Organisational buyers are more rational Although the people on organisational buyers are affected by emotional factors, e.g. like or dislike, the colour of office equipment, etc., it is true that on the whole organisational buying is more rational. Often decisions will be made on economic criteria, because industrial buyers have to justify their decisions to other members of their organisation. Base on that, Caterpillar tractor salespeople design their sales presentation on the fact that, although the initial purchase price of their tractors was higher than the competition, over the life of the tractor costs were significantly lower.

6. Organisational buying may be to specific requirements It is common in industrial marketing for buyers to determine product specifications and for sellers to tailor their product offerings to meet them. This is feasible because of the large potential revenue of such products, e.g. railway engines.

7. Reciprocal buying is important in organisational buying An industrial buyer have a powerful negotiating position with a seller, it may be possible to demand concessions in return for placing the order. In some situations the buyer may demand that the seller buys some of the buyer's products in return for securing the order. For example : –A buyer of tyres for a car manufacturer may demand that, in return for the contract, the tyre producer buys its company cars from the car manufacturer.

8. Organisational selling/buying may be more risky Industrial markets are sometimes characterised by a contract being agreed before the product is made. The product itself may be highly technical and the seller may be faced with unforeseen problems once work has started. For example : –Monetary Crisis

9. Organisational buying is more complex Many industrial purchases, notably those which involve large sums of money and which are new to the company, involve many people at different levels of the organisation. The managing director, product engineers, production managers, purchasing manager and operatives may influence the decision of which expensive machine to purchase. The sales task may be to influence as many of these people as possible and may involve multi- level selling by means of a sales team, rather than an individual salesperson.

10. Negotiation is often important in organisational buying Negotiation is often important in organisational buying because of the presence of professional buyers and sellers, and the size and complexity of organisational buying. The supplier's list price may be regarded as the starting point for negotiation, but the price actually paid will depend on the negotiation skills and power bases of buyers and sellers.

11. Decision Making Unit

12. CONSUMER BUYER BEHAVIOR Who Buys ? User Initiator Influencer Decider Buyer

13. Information Gathering Evaluation of alternative solution (product) Selection of an appropriate solution Need Identification / Problem Identification Post Purchase Evaluation of Decision Decision Making Process Evaluative Criteria Beliefs Attitudes CONSUMER BUYER BEHAVIOR

14. Affecting factors on Decision Making 1. Buying situation 2. Personal Influences 3. Life Style 4. Social Influences Level of Involvement Automatic Limited Extensive

15. Organisational Buyer Behavior Structure –(Who participate in the decision making) Process –(How to process the decision making) Content –(Which criterion to use at different stages)

16. Organisational Buyer Behavior Structure (Who participate in the decision making) –Initiator- Users –Deciders- Influencers –Buyers- Gatekeepers Content (Which criterion to use at different stages) Price- Delivery Life cycle cost - Reliability Durability- Safety etc

17. Search potential sources Acquisition & analysis Proposal Evaluation proposal & selection suplier Recognition of a problem Selection of an order routine Determine Specification Performance feedback & Evaluation Decision Making Process Decision Making Process

18. BUY CLASS : - Straight re-buy - Modified re buy - New task PRODUCT TYPE : - Product Constituents - Product Facilities - MROs IMPORTANCE OF PURCHASE Affecting Factors on Organisational Buyer

19. Buyer Supplier Reserve marketing Traditional marketing Development in Purchasing Practice Just in time Purchase –Minimalise stock by organising a supply material –Increasing Efficiency / cost reduction Centralised Purchasing –Huge organisation –Bulk buying of common requirement –Negosiation power of cost Reserve Marketing –Initiative come from the buyer

20. Development In Purchasing Practice (cont’d) Leasing –Adalah semacam kontrak sewa shg tidak perlu bisa membeli produk /jasa, terlindung dr keusangan produk, terhindar dari urusan ganti spare parts, terkadang ada keuntungan pajak, terkadang bisa juga terhindar dari biaya perawatan (tergantung type leasing) Financial Lease / full payment –Long term, fully amortised, total biaya lease biasanya > harga produk, perjanjian tergantung konvensi dan situasi kompetisi, terkadang leaser setuju membiayai perawatan selama leasing. Contoh : photocopy. Operating Lease / rental agreement –Short term (dipilih agar terhindar dari “idle time” dibandingkan jk membeli), cancellable, not completely amortised, biayanya > dari financial lease (krn short time). Misal : buldozer, tractor, dll

21. Relationship Management (organizational customer) Merupakan pengembangan dari close & long term relationship yang reciprocal. How to build the Relationship ? –Technical Support : research & development cooperation, etc –Expertise : design and engineering consultancies, etc –Resources Support : extending credit facilities, low interest loans, etc –Service Level : offering service level improvement; set up, complaint handling –Risk Reduction : free new demo product, product & delivery guarantee, etc