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Chapter Four

Organizational Buyer Behavior

McGraw-Hill/Irwin Copyright © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
SELLING BUSINESS TO BUSINESS SUCCESSFULLY.
UNDERSTANDING WHAT MAKES BUYERS BUY

• THE THEORIES OF BUYER MOTIVATION

• REWARD-MEASUREMENT THEORY
— THINK: BENEFITS

• BEHAVIOR CHOICE THEORY

— THINK: SITUATION

• ROLE THEORY
— THINK: NORMS / EXPECTATIONS

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 BUYING CENTER ROLES
PERSON ROLE

• Initiator-reports that fax keeps breaking

• SECRETARY
down

• VICE PRESIDENT • Controller-sets budget for purchase of

new fax

• OFFICE MANAGER • Gatekeeper-gathers review from vendors.

• Influencers-view demonstrations narrow
• SECRETARY & OFFICE choices
MANAGER • Recommender-recommends a particular
product to decision maker
• OFFICE MANAGER
• Decision Maker – Selects fax to purchase
• VICE PRESIDENT OF
OPERATIONS

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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

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TIME FRAGMENTATION INFLUENCES SELLER’S
MARKETING EFFORTS
INVOLVEMENT INFLUENCE

NUMBER OF DECISION MAKERS

HIGHLY MANY FEW MINIMALLY

FRAGMENTED A LITTLE A LOT FRAGMENTED

TIME SPENT ON DECISION STAGES

DECISION CYCLE TIME INFLUENCE

SIZE OF BUYING CENTER

LONGER LARGE SMALL SHORTER

DECISION CYCLE A LITTLE A LOT DECISION CYCLE
EXPERIENCE OF DECISION MAKERS

Sales objective is to move to the right on the continuum

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 RECOGNIZING THE
BUYER’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

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 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

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USING INFORMATION TO REDUCE RISK

Personal selling Sales literature

Trade shows Advertising
Commercial
Telemarketing Websites
E-mail Direct mail

Word of mouth from

colleagues,
Noncommercial Trade publications
consultants, and
coworkers

Personal Impersonal

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BUYING DETERMINANTS THEORY

Environmental factors

Market factors

Organizational
factors
Individual
factors

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EXPANDED BUYING DETERMINANTS THEORY

Environmental factors
Market factors
Organizational Factors
Extrinsic reward Policies supporting
systems vertical and
Role expectations horizontal
Corporate culture and dimensions
intrinsic rewards
Cross-functional
purchasing teams
Individual factors
Experience: new buy straight rebuy
Choice of reward-Role orientation
Valence of reward
Probability perceptions
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