Chap004 organizational buyer behavior

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Chap004 organizational buyer behavior

  1. 1. Copyright ©The McGraw-Hill Companies, Inc. Permission required for reproduction or display 4-1
  2. 2. Chapter 4 Organizational Buyer BehaviorMcGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-2
  3. 3. SELLING BUSINESS TO BUSINESSSUCCESSFULLY. UNDERSTANDING WHAT MAKES BUYERS BUY THE THEORIES OF BUYER MOTIVATION • BUYING DETERMINATES THEORY - THINK: WHAT FACTORS AFFECT THE BUYER? • ROLE THEORY - THINK: WHAT ROLE IS A BUYER PLAYING? • BEHAVIOR CHOICE THEORY - THINK: WHAT STEPS WILL A BUYER TAKE?McGraw-Hill/IrwinBusiness Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-3
  4. 4. BUYING DETERMINANTS THEORY Environmental factors Market factors Organizational factors Individual factorsMcGraw-Hill/Irwin Exhibit 4-1Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-4
  5. 5. BUYING CENTER ROLES PERSON ROLE•Secretary •Initiator-reports that fax keeps breaking down•Vice President •Controller-sets budget for purchase of new fax•Office Manager •Gatekeeper-gathers review from vendors.•Secretary & Office Manager •Influencers-view demonstrations narrow choices•Office Manager •Recommender-recommends a particular product to decision maker•Vice President of Operations McGraw-Hill/Irwin Business Marketing, 4/e •Decision Maker – Selects fax to Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-5 purchase
  6. 6. DIMENSIONS OF BUYING CENTERS• TIME DIMENSIONS • TIME IS HIGHLY FRAGMENTED: Many participants for short time participation • TIME IS NOT FRAGMENTED: Same people stay through entire process• VERTICAL DIMENSIONS • How many layers of management are involved in decision-making• HORIZONTAL DIMENSIONS • How many departments are involved in decision-making• FORMALIZATION DIMENSION McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-6 • Purchasing tasks and roles are guided and enforced by written
  7. 7. TIME FRAGMENTATION INFLUENCES SELLER’S MARKETING EFFORTS INVOLVEMENT INFLUENCE NUMBER OF DECISION MAKERSHIGHLY MANY FEW MINIMALLYFRAGMENTED A LITTLE A LOT FRAGMENTED TIME SPENT ON DECISION STAGES DECISION CYCLE TIME INFLUENCE SIZE OF BUYING CENTERLONGER LARGE SMALL SHORTERDECISION CYCLE A LITTLE A LOT DECISION CYCLE EXPERIENCE OF DECISION MAKERS Sales objective is to move to the right on the continuum McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-7
  8. 8. RECOGNIZING THE BUYER’S DILEMMA: RISK THERE ARE THREE KINDS OF RISK TO OVERCOME• FINANCIAL RISK • POTENTIAL FOR LOST REVENUE WITH FAULTY PRODUCT• PERFORMANCE RISK • PRODUCT WON’T PERFORM AS INTENDED• SOCIAL RISK • THE PURCHASE WILL NOT MEET APPROVAL OF A REFERENCE GROUP McGraw-Hill/Irwin 4-8 Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved
  9. 9. OVERCOMING RISK• THREE OPTIONS BUYERS USE TO REDUCE RISK • GATHER MORE INFORMATION FROM MORE SOURCES • USING LOYALTY TO PRESENT SUPPLIERS— BUILD TRUST • SPREAD THE RISK BY USING MORE DECISION MAKERS OR GETTING MORE SUPPLIERS McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-9
  10. 10. USING INFORMATION TO REDUCE RISK SOURCES OF INFORMATION Personal selling Personal selling Sales literature Sales literature Trade shows Trade shows Advertising AdvertisingCommercial Telemarketing Telemarketing Websites Websites E-mail E-mail Direct mail Direct mail Word ofof mouth from Word mouth fromNoncommercial colleagues, colleagues, Trade publications consultants, and consultants, and coworkers coworkers Personal Impersonal EXHIBIT 4-5 4-10
  11. 11. BEHAVIOR CHOICE MODEL1. IDENTIFY SITUATION Company and self-orientation2. EVALUATE PERSONAL RELEVANCE Determine Rewards3. ASSESS ACTION ALTERNATIVES AN REQUREMENTS4. CHOOSE A BEHAVIOR STRATEGY Defensive or Offensive McGraw-Hill/Irwin EXHIBIT 4-6 Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-11
  12. 12. EXPANDED BUYING DETERMINANTS THEORY Environmental factors Market factors Organizational Factors Extrinsic reward systems Policies supporting Role expectations vertical and horizontal Corporate culture and dimensions intrinsic rewards Cross-functional purchasing teams Individual factors Experience: new buy straight rebuy Choice of reward-Role orientation Valence of reward Probability perceptions McGraw-Hill/Irwin Business Marketing, 4/e Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved 4-12

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