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2002 E

Chapter 3
Organizational Buying and Buyer Behavior
Prepared by John T. Drea, Western Illinois University

The Consumer Buying Decision Process

Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision

Involvement
influences whether
some steps are
de-emphasized or
extended.
This is more of a
simultaneous than
a sequential
process.

Postpurchase Behavior
2

Organizational Buying
Organizational buying involves many inputs
from professional specialists within the
organization.
The organization relies on inputs from
decision makers and influencers
(stakeholders) to satisfy the diverse set of
needs within the organization.
This requires communication among
stakeholders in the buying organization.
3

The Buying Center

s
d
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r
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om ing
t
s
Cu buy
and avior
beh
nt
e
nm
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e
v
Go ncies
age

External Factors

Inde
stan penden
t
dard
s
settin
Internal Factors
g
o
r
Technology Accounting ganiz
atio
ns
Management Marketing
Legal
Production/Mfg.
Vari
Finance
Service
o
Pub us
lics

Major Differences, Organization Buying

vs. Consumer Buying
Organizational buying involves more buyers
more decision makers or contributors to
portions of the decisions.
Participants (stakeholders) in the buying
center are driven by the specific needs of their
professional responsibilities.
Different types of decisions are often
occurring simultaneously in the process,
spread throughout the buying organization.
5

Steps in the Buying Decision Process

1. Problem recognition
2. General need description
3. Product specification
4. Supplier/Source search
5. Proposal Solicitation
6. Selection
7. Make the transaction routine
8. Evaluate performance
6

Intricacies of the Buying Decision Process

Individual roles and
personal needs
Interaction creates
fluidity (people w/in
the buying center
interact)
The buying process
is simultaneous, not
sequential

Relationships
and loyalty
Three kinds of needs:
1. Need for product
benefits
2. Individual needs
w/in buying center
3. Buying center
members
personal needs
Cluster of stakeholders values
7

Stages in the Process Flow Model of the

Buying Decision Process: Definition
Stage
Process Flow
Stages
Problem definition
Solution definition
Problem
specification

Buying Decision
Process Steps
Problem recognition
General need
description
Problem
specification

Stages in the Process Flow Model of the

Buying Decision Process: Selection Stage
Process Flow
Stages
Solution provider
search
Acquire solution
provider(s)

Buying Decision
Process Steps
Supplier/Source
search
Proposal solicitation
Contract for
supplier(s)

Stages in the Process Flow Model of the Buying

Decision Process: Deliver Solution Stage
Process Flow
Stages
Customize as
needed
Install/Test/Train

Buying Decision
Process Steps
Make the transaction
routine

10

Stages in the Process Flow Model of the Buying

Decision Process: End Game Stage
Process Flow
Stages

Operate solution
Reach end result
Evaluate outcomes
Determine next set
of needs

Buying Decision
Process Steps
Evaluate outcomes
Resell the job

11

Stage 1: Problem Recognition

New
New
Task
Task

A buying situation that has not been previously

faced by the organization.
Significantly steep learning curve, organization
seeks many sources of information.

Modified
Modified
Rebuy
Rebuy

A buying situation that is somewhat similar to past

problems/solutions
Examines alternatives within a limited scope,
involves fewer people than a new task situation
and more than a straight rebuy.

Straight
Straight
Rebuy
Rebuy

A routine buying situation with established solutions.

Abbreviated steps in the process, fewer people in
the buying center, less time to completion.
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Stage 2: Vendor Selection

RFQ = Request for Quotation
Usually associated with that which can be
thoroughly and quantitatively defined

RFP = Request for Proposal

Usually defined by a set of specifications that have
more flexibility regarding the final form of the
offering

For government purchases, RFP/RFQ are

often published in a specified outlet.
13

Stage 3: Solution Delivery

Often takes longer than definition and
selection combined.
Stage ends when delivery is complete
and approved by the buyer.
Involves merging the logistics of the
buyer with the logistics of the customer.

14

Stage 4: End Game

Buying organizations frequently formally
evaluate purchase outcomes in terms of areas
like

Market share
Position
Market ownership
Profitability

Individual buying center members also may

evaluate the purchase, the purchase process,
and the supplier.
15

Organization and Individuals Needs in the

Buying Decision Process
Steps in Flow

Organizational Needs

Individual Needs

Define problem
Define solution
Acquire provider
Develop solution
Install, test, train
Operate solution
End result
Evaluation outcomes

Clear, concise, tractable

Appropriate, affordable
Choice, speed,
Speed, easy use
Ease of integration, speed
User friendly
Effective, low cost
Information

Information & time

Design assistance
Information, assurance
Execution help
Knowledge, comfort
Easy to maintain
Recognition
Communication, reward

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Buying
Decision
Evolution

17

More Buying Decision Evolution

18

Variability of Rational Buying

Human
HumanFactors
Factors
Objective means are used to narrow choices.
Suppliers who recognize cultural/relationship
needs of the organization become the in
supplier.
A review of facts is often done because it is
culturally acceptable.
Facts can be arranged to justify the decisions
that individuals want to make
People seek reinforcement for their beliefs in
every factor presented to them

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Variability of Rational Buying

Mutual
MutualDependence
Dependenceand
andCustomer
Customer Loyalty
Loyalty
Long-term commitment increase both risk and
rewards for both parties involved.
When both vendor and customer share financial
interests that favor cooperation, there is greater
motivation to continue the relationship through
difficult times.

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Value Image
Value Image
It is the total of all impressions that a
customer has of the firm (whether relevant
to the buying situation).
Value image is similar to product
positioning that occurs with consumer
goods.
Need to maximize the value image of the
offering in the mind of the buyer.
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