Transcript Organizational buying behavior

Organizational
buying behavior
B2B Marketing
Organizational buying
behavior
Consumer vs. Organizational buying
behavior
 Main types of buying situations in
B2B
 Stages of decision in B2B
 Roles in B2B procurement
 Influences on organizational behavior
 Buying centres in summary

2
Mag. Maria Peer
Consumer vs. Organizational
buying behavior






3
Decisions made by consumers are quite simple
Organizational buying processes are more
complicated, there are several phases and steps
Different buying behavior for different products and
target groups
Simple consumer goods like food and beverages are
bought very spontaneously – influenced by advertising
and product presentation
For premium consumer goods (expensive clothes,
computers) – buying behavior is getting more rational
– comparison
Private investment goods – price bargaining
Mag. Maria Peer
B2B products – organizational
procurement starts
More than one person involved
 Buying process follows certain rules
 Price comparison, standardisation,
tenders = Ausschreibungen)

4
Mag. Maria Peer
B2B systems
involve more capabilities and greater
workloads
 From the buyer‘s and the supplier‘s
side decision has more extensive
consequences

5
Mag. Maria Peer
B2B facilities
Industrial plants
 Manufacturing installations
 Office buildings

6
Mag. Maria Peer
Main types of buying
situations in B2B



7
Straigtht rebuy – routine decision, repetitive process
(energy, office supplies, raw materials, wood,
cigarettes), component suppliers for the automotive
industry – little or no new information
Modified rebuy – more complicated but less
sophisticated: cars, trucks, computers, consulting –
modified rebuys are often treated too uncautious
New task – calls for thorough research – industrial
plant – highest level of uncertainty. Strategic new tasks
are of extreme strategic and financial importance
(aircrafts, military equipment, infrastructure) – reevaluation of alternatives and search for new
information and new alternatives
Mag. Maria Peer
Buying phases
Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order routine specification
 Performance review

8
Mag. Maria Peer
Stages of decision in B2B
procurement






9
Backhaus developed a widely usable model
to distinguish between 5 phases of
procurement
Preliminary application (initiation phase)
Tender proposal
Negotiation
Processing of order
Warranty and services
Mag. Maria Peer
Preliminary application
Recognition of a problem (need) and
a general solution
 Released by top management =
operating department or external
consultants
 Result  request for an offer
addressed to a number of potential
suppliers

10
Mag. Maria Peer
Tender preparation phase





11
Determination of characteristics and
quantity of needed items
Search for and qualification of potential
sources
Supplier has to provide an offer
Tries to be incomparable with his
competitors
Customer tries to make the offer best
comparable
Mag. Maria Peer
Negotiation phase
= core selling process
 Comprises acquisition and analysis of
proposals, evaluation of proposals
and selection of suppliers

12
Mag. Maria Peer
Processing phase/warranty/
service phase
Contains selection of an order routine
 Realisation of the transaction along
with the fixation of after sales service
tasks

13
Mag. Maria Peer
Roles in B2B procurement –
buying center concept
Group of people involved in the
buying process – buying center
 Webster/Wind model shows 5
different roles – not institutionalised
 This causes probleme in identifying
and targeting the right people within
the decision process

14
Mag. Maria Peer
Buying center

Role keepers have different tasks –
not mandatory
Buyer
 User
 Initiator
 Gatekeeper
 Influencer

15
Mag. Maria Peer
Buyer
Formal authority to sign contracts
 Member of purchasing department
 Influences the vendor selection
 Not in technical details
 Main criteria: price + terms and
conditions of the contract

16
Mag. Maria Peer
User
Person working with the product
 Interested in benefits and
unobstructed function of the product
to buy
 Large knowhow and preconceived
opinion

17
Mag. Maria Peer
Influencer

A person with high technical
knowledge and practical experience
 definition of minimum requirements
on technical or company standards
18
Mag. Maria Peer
Gatekeeper
Controls the flow of information within
the buying center
 Assistant of decision maker
 Influence by preparing the decision
and the relevant documents
(Scriptum p 33-34 + summary)

19
Mag. Maria Peer
Decider
Right to say yes or no
 Mightiest person

20
Mag. Maria Peer
Initiator

21
Person who brings new ideas and
solutions into the company
Mag. Maria Peer
Specific marketing
considerations in the industrial
facilities business
Long decision taking process
 High risk
 Complex buying center
 The specific competitive situation

22
Mag. Maria Peer
Product policy
Focuses on innovation
 Has to care for high flexibility in
research and development
 And manufacturing and assembling

23
Mag. Maria Peer
Price
Strict bid and tender rules
 High transparency
 Add value with service offering to
achieve a differentiating position
 Another aspect: financing and
sourcing models

24
Mag. Maria Peer
Distribution policy
Focus on negotiation phase
 Provide excellent people in the selling
center
 High technical knowledge

25
Mag. Maria Peer
Communication
Problem solver!
 Proving success with comparable
tasks
 Reference projects!

26
Mag. Maria Peer