Transcript Marketing Analysis: Organisational Buyer Behaviour

Marketing Analysis:
Organisational
Buyer Behaviour
Jonathan Freeman
Buyer Behaviour
Goals
To understand:
Models of organisational purchase
decision processes.
• Influences on purchase decisions:
– What
– How
• Marketing implications of the
models.
Consumer and Organisational
Models of Purchase Decisions:
Common Features
• Decision-makers move through
stages to the decision.
• The extent to which all stages of
each model applies varies with the
nature of the task, and the nature of
the people or organisation
involved.
Organisational Vs Consumer
Purchase Decisions
• Market Structure &
Demand
• Nature of the
Buying Unit
• Types of Decisions
• Decision process
• Size of Purchase
• Formalisation
• Professionalism
• Group involvement
• Time
Models of Buying Decision
Processes
CONSUMER
Problem Recognition
Information Search
ORGANISATION
Problem Recognition
Develop Specifications
Evaluation of Alternatives
Information Search
(Products & Firms)
Purchase
Evaluation of Alternatives
Post-Purchase Evaluation
Select & Order
Post-Purchase Evaluation
Influences on
Organisational Buying
• Environmental
•Interpersonal
• Organisational
•Individual
Org. Buying Terminology
• Buying Centre • The people involved in the
buying decision process.
• Buy Phases
• The stages in the
organisational buying
process
• Buy Classes
• Variations in the application
of the stages
• Buy Grid
• Buy Phases x Buy Classes
Buying Roles
Consumer
Purchases
• Initiator
• Influencer
• Decider
• Buyer
• User
Organisational Purchases
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•
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•
•
Initiator
Influencer
Specifier
Approver
Decider
Buyer
User
Gatekeeper
Roles in Buying Centres
• Different roles can
be performed by the
same person.
• More than one
person may perform
the same role.
• Compare with family
decision-making?
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•
•
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•
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•
•
Initiator
Influencer
Specifier
Approver
Decider
Buyer
User
Gatekeeper
Buying Centre Roles:
Some Implications
• The marketer aims to identify members
of the buying centre and evaluate the
relative contribution of each to the PDP.
• Tailor communications campaign to
make different appeals to different role
holders.
• Deliver relevant communications to the
right person at the right time.
What fundamentally distinguishes
Organisational from Consumer
buying is what distinguishes
organisations from individuals.
An understanding of
organisational behaviour theory
is obviously relevant here.
The Buy Grid Framework
Robinson, Faris and Wind
(1967)
• Based on in-depth observation of
two large companies over two years.
• “One of the most useful frameworks
ever developed in Industrial Buying.”
• Tested by Anderson, Chu and Weitz,
(Journal of Marketing, July, 1987) and
largely supported.
Org PDP: The Buy Phases
• Problem Recognition
• Development of Specifications
• Search for solutions: Qualify sources
and acquire proposals
• Evaluation of Proposals
• Choice of product & supplier: order
placed
• Evaluation of performance
Org PDP:The Buy Classes
• New Task - Purchasing something
not bought before.
– Relatively rare
– Can be of large value & set the
pattern for later, more routine
purchases
– Solution of the problem, (often illdefined), is paramount; economic
considerations secondary.
– Perceived as high risk decisions
Org PDP: The Buy Classes
• Straight Re-buy - routine repurchase
– The most common situation.
– Assurance of delivery and adequate
performance are critical, though price is
often important.
– The “in” supplier must avoid errors.
– The “out” supplier is at a disadvantage
because the buyer often perceives the
cost of considering new alternatives to
outweigh the benefits.
Org PDP: The Buy Classes
• Modified Re-buy
– A mix of SR and NT features
– Either an upgraded SR or a
formerly NT becomes familiar.
– New suppliers can win the contract
by providing critical features, (e.g.
short lead times, or superior
packaging)
– Window of opportunity can be
short-lived.
The Buy Grid
New
Task
Recognise problem
Describe general need
Product specification
Search for suppliers
Ask for proposals/bids
Select supplier
Specify order-routine
Review performance
Modified
Rebuy
Straight
Rebuy
Criticisms of RF&W
BuyClass Theory
• No allowance for:
– Importance of purchase
– Complexity of evaluation task
• Assumes newness is a surrogate for
complexity.
– E.g. First purchase of light bulbs
vs replacement of auto fleet.
Anderson, Chu and Weitz,
Journal of Marketing, V.3.
1987
• Findings generally support the Buyclass
framework.
• However, they found that evaluation of
alternatives differs in ways not suggested,
e.g. sometimes alternatives are considered
in Straight Rebuy, and sometimes few are
considered in New Tasks.
Org PDP: Implications
• The framework defines the target for
the marketer’s efforts - the steps
through which s/he must respond to
the buyer’s needs for information.
• But… problems need not be solved
through purchasing.
Implications of PDP Models
• Commmunications
– Where to provide
information.
– What information to
provide.
– How to provide
information.
• Product
– What features matter?
• Distribution
– Narrow or broad.
• Price
– Extent to which
comparisons are
made.
Models Suggest Marketing Actions
Problem Recognition
Stimulate?
For what problems/uses?
PROMOTION
Information Search
Stimulate Search? Provide info?
What info? Where? When? How?
PROMOTION; PLACE
Evaluation of Alternatives How evaluated? Where?
Against what criteria?
PROMOTION; PLACE
Purchase
Post-Purchase
Evaluation
Where? How? When?
PROMOTION; PLACE;
PRODUCT
What’s important?
PRODUCT; PROMOTION...
Further Strategic Uses
• Models suggest bases for segmenting
markets - differences between people
relevant to the marketing mix.
• Models can be diagnostic - if they
can be monitored.
ANALYSING COMPETITIVE ADVANTAGE
USING EVALUATION OF ALTERNATIVES STAGE
OF PDP MODELS
Attribute Importance Our Performance
Competitor's
Simultaneous Result
Performance
Poor
Neglected Opportunity
High
Poor
Good
Competitive Disadvantage
Poor
Competitive Advantage
Good
Good
Head-to-Head Competition
Poor
Null Opportunity
Low
Poor
Good
False Alarm
Poor
False Advantage
Good
Good
False Competition
From: Alvin C. Burns, "Generating Marketing Strategy Priorities Based on Relative Competitive
Position," Journal of Consumer Marketing. Vol. 3. (Fall 1986).
SUMMARY
• Consumers & Organisations: similar buying
processes but they are NOT the same.
• Extent to which all stages are followed
depends on the risk, complexity, and
importance of the purchase and the time
available for it.
• The tendency is for purchase decisions to
become habituated or routinised over time.
• The models shown present an informationprocessing view of learning, which does not
apply to all products.
How Advertising Works
Thinking
High
Product
Involvement
Low
Motives for Purchase
Feeling
1: Informative (e.g. Car,
Insurance, House, Furniture)
Model: Learn - Feel - Do
Appeal: Informational
Media: Long copy, Reflective
2: Affective (e.g. Jewellery,
Cosmetics, Fashion, etc..)
Model: Feel - Learn - Do
Appeal: Emotional, selfimage
Media: Large space, Image
3: Habit formation (e.g. Food
Household goods)
Model: Do - Feel - Learn
Appeal: Reinforce
Media: Small space, Sound
bites, POS
4: Self-satisfaction (e.g.
Cigarettes, Sweets, Alcohol)
Model: Do - Learn - Feel
Appeal: Social
Media: Billboards, print,
POS
(Adapted from Vaughn, 1980, p31)