Organizational Buying Behavior1

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Organizational buying

behavior Consumer vs. Organizational buying

behavior

Main types of buying situations inB2B

Stages of decision in B2B

Roles in B2B procurement Influences on organizational behavior

Buying centres in summary


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Consumer vs. Organizational

buying behavior Decisions made by consumers are quite simple

Organizational buying processes are morecomplicated, there are several phases and steps

Different buying behavior for different products andtarget groups

Simple consumer goods like food and beverages arebought very spontaneously influenced by advertisingand product presentation

For premium consumer goods (expensive clothes,computers) buying behavior is getting more rational comparison

Private investment goods price bargaining


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B2B products organizational

procurement starts More than one person involved

Buying process follows certain rules

Price comparison, standardisation,

tenders = Ausschreibungen)


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B2B systems

involve more capabilities and greater

workloads

From the buyers and the suppliersside decision has more extensive

consequences


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B2B facilities

Industrial plants

Manufacturing installations

Office buildings


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Main types of buying

situations in B2B Straigtht rebuy routine decision, repetitive process

(energy, office supplies, raw materials, wood,cigarettes), component suppliers for the automotiveindustry little or no new information

Modified rebuy more complicated but lesssophisticated: cars, trucks, computers, consulting modified rebuys are often treated too uncautious

New task calls for thorough research industrialplant highest level of uncertainty. Strategic new tasks

are of extreme strategic and financial importance(aircrafts, military equipment, infrastructure) re-evaluation of alternatives and search for newinformation and new alternatives


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Stages of decision in B2B

procurement Backhaus developed a widely usable model

to distinguish between 5 phases of

procurement Preliminary application (initiation phase)

Tender proposal

Negotiation

Processing of order

Warranty and services


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Preliminary application

Recognition of a problem (need) and

a general solution

Released by top management =operating department or external

consultants

Result request for an offeraddressed to a number of potential

suppliers


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Tender preparation phase

Determination of characteristics and

quantity of needed items

Search for and qualification of potentialsources

Supplier has to provide an offer

Tries to be incomparable with his

competitors Customer tries to make the offer best

comparable


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Negotiation phase

= core selling process

Comprises acquisition and analysis of

proposals, evaluation of proposalsand selection of suppliers


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Processing phase/warranty/

service phase Contains selection of an order routine

Realisation of the transaction along

with the fixation of after sales servicetasks


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Roles in B2B procurement

buying center concept Group of people involved in the

buying process buying center

Webster/Wind model shows 5different roles not institutionalised

This causes probleme in identifying

and targeting the right people withinthe decision process


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Buying center

Role keepers have different tasks not mandatory

Buyer

User

Influencer

Gatekeeper

Decider

Initiator


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Buyer

Formal authority to sign contracts

Member of purchasing department

Influences the vendor selection

Not in technical details

Main criteria: price + terms and

conditions of the contract


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User

Person working with the product

Interested in benefits and

unobstructed function of the productto buy

Large knowhow and preconceived

opinion


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Influencer

A person with high technical

knowledge and practical experience

definition of minimum requirements

on technical or company standards


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Gatekeeper

Controls the flow of information within

the buying center

Assistant of decision maker

Influence by preparing the decision

and the relevant documents

(Scriptum p 33-34 + summary)


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Initiator

Person who brings new ideas and

solutions into the company


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Specific marketing

considerations in the industrial

facilities business Long decision taking process

High risk

Complex buying center

The specific competitive situation


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Product policy

Focuses on innovation

Has to care for high flexibility in

research and development

And manufacturing and assembling


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Price

Strict bid and tender rules

High transparency

Add value with service offering to

achieve a differentiating position

Another aspect: financing and

sourcing models


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Distribution policy

Focus on negotiation phase

Provide excellent people in the selling

center

High technical knowledge


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Communication

Problem solver!

Proving success with comparable

tasks

Reference projects!

Documents

Organizational Buying Behavior1