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Industrial Buying BehaviourOrganization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.Industrial buyers are those who purchase items on behalf of their business or organization . Businesses now spend considerable amounts trying to learn about what makes customers tick.

Some of the characteristics of organizational buyers are:

1. Consumer market is a huge market with millions of consumers while organizational buyers are limited in number for most of the products.2. The purchases are in large quantities.3. Close relationships and service are required.4. Demand is derived from the production and sales of buyers.5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in demand for their products.6. The organizational buyers are trained professionals in purchasing.7. Several persons in organization influence purchase.8. Lot of buying occurs in direct dealing with manufacturers.

AspectIndustrial buyingConsumer buyingBuying objectiveEnable productionPersonal need satisfactionBuying motiveMostly RationalRational as well as emotionalPurchasing functionProfessional buyingPersonal buyingDecision makingTrained professionals involvedOften impulsive, without consulting othersCharacteristicsNegotiations, intense interactionOften without negotiation, little interactionOrder sizeOften largeMostly smallDemandDerived and fluctuatingAutonomous and relatively stablePrice elasticityRather inelasticRather elasticNumber of customers & SellersMostly limitedVery largeProductsTechnologically ComplexStandardizedMarket StructureOligopolyMonopolisticPromotionMajor emphasis is on personal selling Emphasis is on advertising

The business buyers face many decisions in making purchase. Mainly there are three types of buying situations: Straight Rebuy: The straight rebuy is a buying situation is a situation in which the purchasing department reorders on a routine basis .The buyer chooses suppliers on an approved list.Known product from known supplier Low uncertainty regarding outcome (e.g. consumable items like MRO)

Office suppliesGas water electricityCleaning materials

New task: The new task situation is a situation in which purchaser buys a product or service for the first time . Completely new product from unknown suppliers High uncertainty regarding outcome (e.g. acquisition of capital goods)

BuildingsProduction equipmentsModified Rebuy: The modified rebuy is a buying situation in which the buyer wants to modify product specification, prices, delivery requirements, or other terms. New product from known supplier Existing product, new supplier Moderate uncertainty regarding outcome

FurnitureCab servicesCourier services