1.Organizational Buying Behavior

8/6/2019 1.Organizational Buying Behavior

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Organizational buying behavior

B2B Marketing


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Organizational buying behavior

Consumer vs. Organizational buying behavior

Main types of buying situations in

B2B 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 more complicated, there areseveral phases and steps

Different buying behavior for different products and target groups

Simple consumer goods like food and beverages are bought veryspontaneously influenced by advertising and product presentation

For premium consumer goods (expensive clothes, computers) buyingbehavior 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 suppliers sidedecision 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, officesupplies, raw materials, wood, cigarettes), component suppliers for theautomotive industry little or no new information

Modified rebuy more complicated but less sophisticated: cars, trucks,

computers, consulting modified rebuys are often treated toouncautious

New task calls for thorough research industrial plant highest levelof uncertainty. Strategic new tasks are of extreme strategic andfinancial importance (aircrafts, military equipment, infrastructure) re-evaluation of alternatives and search for new information and new

alternatives

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Buying phases

Problem recognition

General need description

Product specification Supplier search

Proposal solicitation

Supplier selection

Order routine specification

Performance review

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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 = operatingdepartment or external consultants

Result request for an offer addressed 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 potential sources

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 proposals andselection 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 service tasks

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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 5 different roles not institutionalised

This causes probleme in identifying and

targeting the right people within the decision

process

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Buying center

Role keepers have different tasks notmandatory

Buyer

User

Initiator

Gatekeeper

Influencer

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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 product to 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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Decider

Right to say yes or no

Mightiest person

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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 adifferentiating 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!

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1.Organizational Buying Behavior

Documents

Transcript of 1.Organizational Buying Behavior