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Ch. 3: Organizational Buying and Buying Behavior

Ch. 3: Organizational Buying and Buying Behavior. Need Recognition. Information Search. Evaluation of Alternatives. Purchase Decision. Post Purchase Behavior. Consumer Decision Process. The Buying Center. External Factors. Independent standards-setting organizations.

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Ch. 3: Organizational Buying and Buying Behavior

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  1. Ch. 3: Organizational Buying and Buying Behavior

  2. Need Recognition Information Search Evaluation of Alternatives Purchase Decision Post Purchase Behavior Consumer Decision Process

  3. The Buying Center External Factors Independent standards-setting organizations Customer needs and buying behavior Internal Factors Technology Accounting Management Marketing Legal Production/Mfg. Finance Service Government agencies Various Publics Stakeholders in each discipline within the buying organization contribute expertise such that internal and external factors are accommodated.

  4. Organization Buying Vs. Consumer Buying • Involves more Buyers • Stakeholders in Buying Center driven by professional responsibilities • Different decisions occurring simultaneously within the Buying Center

  5. “Traditional” B2B Buying Decision Process 1. Problem recognition 2. General need description 3. Product specification 4. Supplier/Source search 5. Proposal Solicitation 6. Selection 7. Make the transaction routine 8. Evaluate performance

  6. Factors of the Buying Decision Process • Interaction is fluid and broad based • Process is simultaneous not sequential • The “Track-Record” determines if supplier is included in evoked set • Relationships build loyalty

  7. The Buying Center:Members must meet 3 needs in the decision process: • Organizations Needs • Benefits of the product or service • Individual Needs • Based on professional activities and functions of the job • Individual’s Personal Needs • Career, Quality of life, Recognition

  8. Process Flow Model of Buying Decision Process

  9. Process Flow Model of Buying Decision Process:Definition Stage • The first attempt at describing a solution • The intricacy of the solution and the number of organizational units to be involved (size of the buying center) is determined. • Successful suppliers are involved, often in the development of the Product Specification

  10. Process Flow Model of Buying Decision Process:Selection Stage • Selection may have occurred in the Definition Stage. • If a new buy, members of the buying center may have a “favorite” supplier. • A modified or straight rebuy will likely include the existing suppliers.

  11. Process Flow Model of Buying Decision Process:Deliver Solution Stage • Development activities customize the solution to the specific technical and other needs of the customer – the Total Offering. • Meet the customer’s “way of buying” process – integration of supply logistics with consumption logistics.

  12. Process Flow Model of Buying Decision Process:End Game Stage • Reinforce customer decisions made in the selection process. • Not the end of the process, but the beginning of the next opportunity for the supplier to serve the customer.

  13. Typical Re-Buy Situation • Straight Re-Buy • Buying situation that is routine • Established solutions • Modified Re-Buy • Situation from New-Task Situation • Limit exposure from competitive forces

  14. Typical New Task Situation • A need not yet faced by Organization • New offering with new technology • Seek many sources of information and assistance • Utilize complete buying process to investigate alternatives

  15. New Task to Straight Rebuy Yes. Then next purchase New Task Rebuy Definition No. Then next purchase Definition Selection Selection Is the buyersatisfied? Solution Delivery Solution Delivery End Game End Game

  16. Complex Rebuy Evaluation in End Game Modified Rebuy Straight Rebuy Definition Define changesto process Definition Satisfied,No differences Selection Dissatisfied Selection Solution Delivery SmallDifference Solution Delivery no yes How different is the next situation? Is the buyersatisfied? End Game End Game To New Task LargeDifference Ch3Exhibit6.ppt

  17. Value Image • It is the total of all impressions that a customer has of the firm (whether relevant to the buying situation). • Value image is similar to product positioning that occurs with consumer goods. • Need to maximize the value image of the offering in the “mind” of the buyer.

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