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Copyright ©The McGraw-Hill Companies, Inc. Permission required for reproduction or display
4-2
Chapter 4
Organizational
Buyer Behavior
McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-3
SELLING BUSINESS TO BUSINESS SUCCESSFULLY. UNDERSTANDING WHAT
MAKES BUYERS BUY
THE THEORIES OF BUYER MOTIVATION
• BUYING DETERMINATES THEORY- THINK: WHAT FACTORS AFFECT THE BUYER?
• ROLE THEORY- THINK: WHAT ROLE IS A BUYER PLAYING?
• BEHAVIOR CHOICE THEORY- THINK: WHAT STEPS WILL A BUYER TAKE?
McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-4
BUYING DETERMINANTS THEORY
Individualfactors
Organizationalfactors
Market factors
Environmental factors
Exhibit 4-1McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-5
BUYING CENTER ROLES
PERSON
•Secretary
•Vice President
•Office Manager
•Secretary & Office Manager
•Office Manager
•Vice President of Operations
ROLE
•Initiator-reports that fax keeps breaking down
•Controller-sets budget for purchase of new fax
•Gatekeeper-gathers review from vendors.
•Influencers-view demonstrations narrow choices
•Recommender-recommends a particular product to decision maker
•Decision Maker – Selects fax to purchase
McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-6
DIMENSIONS OF BUYING CENTERS
• TIME DIMENSIONS• TIME IS HIGHLY FRAGMENTED: Many participants for short
time participation
• TIME IS NOT FRAGMENTED: Same people stay through entire process
• VERTICAL DIMENSIONS• How many layers of management are involved in decision-making
• HORIZONTAL DIMENSIONS• How many departments are involved in decision-making
• FORMALIZATION DIMENSION• Purchasing tasks and roles are guided and enforced by written
procedures and policies
McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-7
TIME FRAGMENTATION INFLUENCES SELLER’S MARKETING EFFORTS
INVOLVEMENT INFLUENCE
NUMBER OF DECISION MAKERS
HIGHLY MANY FEW MINIMALLYFRAGMENTED A LITTLE A LOT FRAGMENTED
DECISION CYCLE TIME INFLUENCE
SIZE OF BUYING CENTER
LONGER LARGE SMALL SHORTERDECISION CYCLE A LITTLE A LOT DECISION CYCLE
EXPERIENCE OF DECISION MAKERSEXPERIENCE OF DECISION MAKERS
TIME SPENT ON DECISION STAGESTIME SPENT ON DECISION STAGES
Sales objective is to move to the right on the continuumMcGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-8
RECOGNIZING THEBUYER’S DILEMMA: RISK
THERE ARE THREE KINDS OF RISK TO OVERCOME
• FINANCIAL RISK
• POTENTIAL FOR LOST REVENUE WITH FAULTY PRODUCT
• PERFORMANCE RISK• PRODUCT WON’T PERFORM AS INTENDED
• SOCIAL RISK
• THE PURCHASE WILL NOT MEET APPROVAL OF A REFERENCE GROUP
McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-9
OVERCOMING RISK
• THREE OPTIONS BUYERS USE TO REDUCE RISK
• GATHER MORE INFORMATION FROM MORE SOURCES
• USING LOYALTY TO PRESENT SUPPLIERS—BUILD TRUST
• SPREAD THE RISK BY USING MORE DECISION MAKERS OR GETTING MORE SUPPLIERS
McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-10
USING INFORMATION TO REDUCE RISKSOURCES OF INFORMATION
ImpersonalPersonal
Trade publications
Word of mouth from colleagues, consultants, and coworkers
Word of mouth from colleagues, consultants, and coworkers
Noncommercial
Sales literature
Advertising
Websites
Direct mail
Sales literature
Advertising
Websites
Direct mail
Personal selling
Trade shows
Telemarketing
Personal selling
Trade shows
Telemarketing
Commercial
EXHIBIT 4-5
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BEHAVIOR CHOICE MODEL
1. IDENTIFY SITUATIONCompany and self-orientation
2. EVALUATE PERSONAL RELEVANCEDetermine Rewards
3. ASSESS ACTION ALTERNATIVES AN REQUREMENTS
4. CHOOSE A BEHAVIOR STRATEGYDefensive or Offensive
EXHIBIT 4-6McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
4-12
EXPANDED BUYING DETERMINANTS THEORY
McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
Organizational Factors
Extrinsic reward systemsRole expectations
Corporate culture andintrinsic rewardsCross-functionalpurchasing teams
Policies supportingvertical and horizontal
dimensions
Individual factors
Experience: new buy straight rebuyChoice of reward-Role orientation
Valence of rewardProbability perceptions
Environmental factors
Market factors
Organizational Factors
Individual factors
