CONSUMER AND ORGANIZATIONAL BUYING BEHAVIOR

Group E-

Japneet Kaur

Gunjan Ahuja

Heena pura

Gunjeet Sodhi

ORGANISATIONAL BUYER BEHAVIOUR

‘The decision-making process by which formal organisations establish the need for

purchased products and services, and identify, evaluate, and choose among

alternative brands and suppliers’Kotler and Armstrong 1989

BUYING CENTERA buying center is all those individuals and groups

who participate in the purchasing decision-making process, who share common goals and the risks arising from the decisions .

UnexpectedSituational

Factors

UnexpectedSituational

Factors

Attitudes of

Others

Attitudes of

Others

EthicalDecision-

Making Unit of a

Buying Organization is Called

Its Buying Center.

Users Influencers

BuyersGatekeepers

Roles Include

Deciders

Approvers

BUYING CENTER:

Users •people in the organization who actually use the product or service.

Influencers • affect the buying decision,• usually by helping define the specifications for what

is bought.

Buyers •have the formal authority and responsibility to select the supplier and negotiate the terms of the contract.

Deciders •have the formal or informal power to select or approve the supplier that receives the contract.

Gatekeepers •control the flow of information to other members of the buying center.

TYPES OF BUYING SITUATIONS

Straight rebuyModified rebuyNew Task

Buying Situations

New task—the problem or need is totally different from previous experiences. Significant amount of information is required. Buyers operate in the extensive problem solving

stage. Buyers lack well defined criteria. Lack strong predispositions toward a solution.

Modified rebuy—decision makers feel there are benefits to be derived by reevaluating alternatives. Most likely to occur when displeased with the

performance of current supplier. Buyers operate in the limited problem solving stage.

Buyers have well defined criteria.

Straight rebuy—the problem or need is a recurring or continuing situation. Buyers have experience in the area in question. Require little or no new information. Buyers operate in the routine problem solving

stage.

OrganizationaBuying Process

1. Problem Recognition

2. General Description

of Need

3. ProductSpecifications

4. Supplier Search

5. Acquisitionand Analysisof Proposals

6. Supplier Selection

7. Selectionof

Order Routine

8. PerformanceReview

FORCES INFLUENCING ORGANIZATIONAL BUYING BEHAVIOR

EnvironmentalForces

OrganizationalForces

GroupForces

IndividualForces

OrganizationalBuying

Behavior

•Economic Outlook: Domestic & Global•Pace of Technological Change•Global Trade Relations

•Goals, Objectives, and Strategies•Organizational Position of Purchasing

•Roles, relative influence, and patterns of interaction of buyingdecision participants

•Job function, pastexperience, and buyingmotives of individualdecision participants

MAJOR INFLUENCES ON ORGANIZATIONAL BUYERS

THE NATURE AND SIZE OF ORGANIZATIONAL MARKETS

ONLINE BUYING IN OBBReasons:

1. Technology provides timely supplier information product availability technical specifications application uses price delivery schedules.

2. Technology substantially reduces buyer order processing costs.

3. Technology can reduce marketing costs, particularly sales and advertising expense, and broaden their potential customer base for many types of products and services.

ONLINE AUCTIONS: Seller puts an item up for sale Buyers bid in competition. As bidders increase, there is upward

pressure on price. Auction ends when a single bidder remains

E-Marketplaces: Virtual Organizational Markets

e-marketplaces •bring together buyers and supplier organizations.•make possible the real-time exchange of information, money, products, and services•Variety of names

• B2B exchanges• e-hubs

Independent e-marketplaces •charge a fee for service•Small business use to expand customer base•Exist in settings that have one or more of the following features

• Thousands of geographically dispersed buyers and sellers.

• Time sensitivity due to perishable offerings and changing technologies.

• Easily comparable offerings from a variety of suppliers