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Industrial Buying and Buying Behaviour Models

Communicating BenefitsCustomer Benefit Competitive Price High Quality JIT DeliveryWillingness for Changes

Buying Center CFO F M/P M / Foreman CEO Purchase Manager Marketing Manager Logistics Officer Warehouse Manager Maintenance Mgr. Buyer

Factory at 4 Locations E- CommerceCustomized Manufacture

24/7 Response Seller

Buying Orientation1. Lowest Price 2. Gain Power in the Market in terms of USP and Product Features 3. Minimizing Risk

Procurement Orientation Collaborative Relationship Timely Delivery Working Closely with otherfunctional areas

Supply Chain Management Deliver value to end user. Outsource Non-core activities. Support CollaborativeRelationship.

Major Consideration for Purchase Decision1. Consistency of Quality 2. Lowest price 3. Time Saving 4. Assurance of Supply 5. Suppliers Relationship

Types of Purchases1. New Tasks - Prospecting and Lead generation - Vendor Development - Short listing of the Vendors / Suppliers 2. Repeat Purchases 3. Modified Re-buy

Buying Decision ModelsWebster and Winds Model1. Superiority of Organizaional Variables 2. Followed by the Attitudinal Variables 3. Work- Specification Variables 4. Price Variables

Webster and Wind ModelEnvironmental Variables Organizational Variables Buying Centre Variables Individual Variables Organizational Buying Decisions

Environmental Variables1. Competitive Practices and Pressures 2. Suppliers Information 3. Customer Demands 4. Technological 5. Labour Issues 6. Laws and Regulations

Organizational Variables1. Objectives and Goals 2. Organizational Structure 3. Purchase Policies and Procedure 4. Degree of Decentralization 5. Evaluation and Reward System

Buying Center Variables1. Authority and Role 2. Size 3. Resources 4. Key Influencers 5. Interpersonal Relationship 6. Communication

Personal Variables1. Personal Goals 2. Education and Expertise 3. Experience 4. Values 5. Job Position 6. Income

Webster and Wind ModelStrengths

Comprehensive Generally Applicable Analytical Identifies Key Variables Helpful in Developing Industrial marketing Strategies

Webster and Wind ModelWeakness Model is Weak in Explaining the Specific Influence of Key Variables

Sheth ModelProf. Jagdish n. Sheth (1973)

Emphasizes on Joint Decision Making by Two or More individuals Psychological Aspect of Decision Making Individuals In the Industrial Buying Behaviour

Sheth Model(1) Differences Among Individual Buyers (2) Autonomous Or Joint Decisions (3) Methods Used For Conflict Resolution Situational Factors

Organizational Buying Decisions

Personal Variables1. Personal Goals 2. Education and Expertise 3. Experience 4. Values 5. Job Position 6. Income

Personal Variables1. Background 2. Information Source 3. Active Search 4. Perceptual Distortion 5. Satisfaction With Past Purchases

Product Specific Factors1. Time Pressure 2. Perceived Risk 3. Type of Purchases

Company Specific Factors1. Company Size 2. Company Orientation 3. Degree of Centralization

Conflict Resolution

1. Problem Solving 2. Persuasion 3. Bargaining 4. Politicking

Sheth Model(1) Differences Among Individual Buyers (2) Autonomous Or Joint Decisions (3) Methods Used For Conflict Resolution Situational Factors

Organizational Buying Decisions