ORGANISATION

AL BUYING
BEHAVIOUR

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Organisational buying
behaviour

At the end of this session, you should understand:

• The nature and types of business markets
• The influences on business market buying behaviour and
demand
• The business buying decision process
• The types of business buying decisions (straight rebuy,
modified rebuy, new task buying)
• The influence of the buying centre on purchase decision
making
• The application of relationship marketing in business markets
• The role of the Internet in business-to-business (B2B)
marketing

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-2
Slides prepared by Sarah Fletcher and Morena Dobrowolski
What is organisational
(business to business) buying?
• Business markets use the products or services they buy to
produce or trade their own products or services
• Consumer markets make purchases for personal consumption
• Three main differences exist between consumer and business
decision making
– Nature of demand
– Composition of the business market
– Motives of the buyers in each market

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-3
Slides prepared by Sarah Fletcher and Morena Dobrowolski
The business decision-making
process

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-4
Slides prepared by Sarah Fletcher and Morena Dobrowolski
The scope of the business
market
• Agriculture
• Mining
• Construction
• Manufacturing
• Transport
• Wholesale and retail trade
• Finance, insurance, real estate
• Government
• Non-profit organisations

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-5
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Marketing to B2B

• Innovative B2B promotions See EXHIBIT 4.2 Optus targets

businesses, page 97.
can gain attention
PowerPoint slides supplied on the
– Bankwest targets business Instructor Resource CD to accompany
with pizza delivery Consumer Behaviour include
advertisement images.

• Successful marketing to the

agriculture sector
– Product focus combats
lower price

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-6
Slides prepared by Sarah Fletcher and Morena Dobrowolski
The nature of business
markets
• Organisational buyers have different needs and buying patterns
across different buying situations
– e.g. medical purchase of simple box of rubber gloves vs complex purchase of an X-ray
machine

• Vary primarily from consumers through type of customer, reason

for buying or product usage
– See Exhibit 4.2 previous slide

• B2B
– Purchase inputs to make other goods and services

e.g. sugar and flavouring as inputs for Coca-Cola
– Resell purchases to other business users or consumers

e.g. Woolworths
– Use purchases to conduct business

e.g. stationery, legal services, marketing services

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-7
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Organisational buyers and
consumers

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-8
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Purchase decision making in
business markets
• Buying is often a group process

• Buying is less frequent and in large quantities

• Negotiation period is often prolonged

• Customer service is frequently a main requirement

• Consistency of quality and supply are important

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-9
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Types of buying situations

• New task rebuy

– A similar purchase decision has never been made

• A modified rebuy
– A similar purchase decision has been made before
but this time modifications to the purchase are
needed or a new supplier is to be chosen

• A straight rebuy
– A routine purchase that has been made many times
before

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-10
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Business market demand

• Consumer demand is influenced by marketing

environment factors, such as
– Interest rate, social trends, marketing communications

• Demand for business goods incorporates four

main considerations
– Demand is derived from the underlying consumer
demand for its goods and services
– Demand is relatively inelastic to changes in price
– Demand can fluctuate widely
– Business market buyers are well informed

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-11
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Buying motives

• Assumptions exist that B2B buying motives are

rational, methodical and objective

• However, personal factors also play a part:

relationships, self advancement

• Primary motivators include

– Cost and profit-related benefits
– Ongoing promotional support
– Ability to generate store traffic
– Improvements in productivity

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-12
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Organisational buying criteria
and motives

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-13
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Multiple buying influences
• Buying centre
– A group of individuals involved in the purchase decision making
• Users
– The people who actually use the product e.g. safety goggles
• Influencers
– Have a direct or indirect influence on the purchase decision due to some
technical knowledge, financial power or other factor
• Deciders
– Make the actual buying decision: purchasing officer, management,
product/service user
• Gatekeepers
– Control the flow of information
• Buyers
– Select the suppliers and negotiate the terms of agreement

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-14
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Relationship marketing in
business markets
• Relationship marketing
– All marketing activities directed toward establishing, developing and
maintaining successful exchanges
with customers
• Create a ‘value proposition’
– Strategies should include use of specific competencies
to create better value for customers
• Customer relationship management (CRM)
– Maximising customer retention rates and share of individual
customer’s business
– Past behaviour is important in CRM

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-15
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Factors influencing growth of
relationship marketing
• 1970s increased global competition, forcing adoption
of defensive strategies
• 1980s and 1990s growth in services marketing based
on direct relationships, leading to a professional focus
in this area
• Adoption of the ‘value chain’ approach by Japanese
businesses
– A link of value-creating activities producing maximum
efficiency across all areas
• The future for relationship marketing
– Increased use of the Internet
– Increasing costs servicing unprofitable customers, leading
to a focus on better servicing other customers

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-16
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Trends in organisational
buying

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-17
Slides prepared by Sarah Fletcher and Morena Dobrowolski
Measuring CRM programs

• Key measurement programs for a customer

satisfaction system in the B2B market

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-18
Slides prepared by Sarah Fletcher and Morena Dobrowolski
‘Autocratic management
versus the buying group’
• Case study:
– Autocratic management versus the buying group

• Read the above case study and discuss the

associated questions

Copyright  2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Consumer Behaviour by Karen Webb 4-19
Slides prepared by Sarah Fletcher and Morena Dobrowolski