12/30/2017 Industrial Buying Behavior Models

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Industrial Buying Behavior Models

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The buying decisions of industrial buyers are in uenced by many factors. Usually, these are in uenced by organisational
factors or task-oriented objectives viz. best product quality, or dependable delivery, or lowest price and personal factors or
non-task objectives viz. like promotion, increments, job security, personal treatment, or favor.  When the suppliers proposals
are substantially similar, organizational buyers can satisfy organisational objectives with any supplier, and therefore personal
factors become more important. When  suppliers offers differ signi cantly, industrial buyers pay more attention
to  organisational factors in order to satisfy the organisational objectives. There are  two models available to provide a
comprehensive and integrated picture of the  major factors that combine to explain organisational buying  behavior.
These are:

The Webster and Wind Model

The Webster and Wind Model of organisational buying behavior is quite a comprehensive model. It considers four sets of
variables: environmental, organizational, buying center, and individual, which, affect the buying-decision making process in a
rm.

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Source: R.E. Webster, Jr and Y Wind, journal of Marketing, 36, pp 12-17, April, 1972.

The environmental variables include physical, technological, economic, political, legal, labor unions, competition and supplier
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information. For example, in a recessionary economic condition, industrial rms minimize the quantity of items purchased.
The environmental  factors in uence the buying decisions of individual organisations. The  organizational variables include  Pricing Decisions in Industr
objectives, goals, organisation structure,  purchasing policies and procedures, degree of centralization in purchasing,
 Strategic Industrial Marketi
and  evaluation and reward system. These variables particularly in uence the  composition and functioning of the buying
center, and also, the degree of centralization or decentralization in the purchasing function in the buying organisation. The
functioning of buying center is in uenced by the  organisational variables, the environmental variables and the 
 Industrial Distribution Chan

 Uses of Industrial Advertisi

individual variables. The output of the group decision-making process of the buying center includes solutions to the buying

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12/30/2017 Industrial Buying Behavior Models
problems of the organisation and also the  satisfaction of personal goals of individual members of the buying  cente.  Industrial Product Developm
The  strengths of the model, developed in 1972, are that it is comprehensive,  generally applicable, analytical, and that it
identi es many key variables, which  could be considered while developing marketing strategies by industrial  marketers.  Industrial Distribution Chan

However, the model is weak in explaining the speci c in uence of the key variables.  Indirect Channel Relationsh
Marketing
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 Industrial Marketing Comm

Industrial Buying Behaviour Model Webster Wind Model
 Channel Strategy Formulati
Case Study Buying Group
Marketing

 Industrial Distribution Chan

The Sheth Model
In 1973, Professor Jagdish N Sheth developed the Sheth model of Organizational Buying. This model  highlights the
decision-making by two or more individuals jointly, and the  psychological aspects of the decision-making individuals in the
industrial buying behavior  It includes three components and situational factors, which determine the choice of a supplier or
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a brand in the buying decision making process in an organization. The differences among the individual buyers expectations
(Component 1) are caused by the factors:  background of individuals; information sources; active search;
perceptual  distortion; and satisfaction with past purchases. The background of individuals  depends upon their education,  Business Analysis
role in the organization, and life style. The factor  perceptual distortion means the extent to which each individual
 Business Communication
participant  modi es information to make it consistent with his existing beliefs and previous  experiences. It is di cult to
measure perceptual distortion, although techniques  such as factor analysis and perceptual mapping are available for this  Business Ethics
purpose. In Component (2), there are six variables, which determine whether the buying decisions are autonomous or joint.  Business Finance
According to the Sheth Model, larger the  size of the organization and higher the degree of decentralization, more will
be possibilities of joint-decision making.  Business Taxation

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 General Business Articles

 Global Business Environme

 Human Resource Managem

 Industrial Marketing

 Information Systems Mana

 International Business

 International Business Law

 International Finance

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 Legal Framework

 Logistics Management
Source: Jagdish N. sheth, “A Model of Industrial Buyer Behaviour”, Journal of Marketing, 37, pp 50-56,
October, 1973.  Management Articles

 Management Case Studies

The methods used for con ict resolution in joint-decision making process are indicated by the Component (3) in the model.
Problem-solving and persuasion methods are used when there is an agreement about the organizational objectives. If there  Management Concepts
is no such agreement, bargaining takes place. Con ict about   the style of decision-making is resolved by politicking.
 Management Information S
Situation factors can be  varied like economic conditions, labour disputes, mergers and acquisitions. The  model does not
explain their in uence on the buying process.  Management Principles

Read More about different Consumer Behavior Models:  Management Science

 Managerial Economics

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 Mercantile Law
Howard Sheth Model of Consumer Behavior  Modern Management Conc
The Engel Kollat Blackwell Model of Consumer Behavior
Nicosia Model of Consumer Behavior  Operations Management

Solomon Model of Comparison Process – Model of Consumer Behavior  Organizational Behavior

 Personal Finance
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