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Copyright ©The McGraw-Hill Companies, Inc. Permission required for reproduction or display                                ...
Chapter 4                          Organizational                          Buyer BehaviorMcGraw-Hill/IrwinBusiness Marketi...
SELLING BUSINESS TO BUSINESSSUCCESSFULLY. UNDERSTANDING WHAT        MAKES BUYERS BUY       THE THEORIES OF BUYER MOTIVATIO...
BUYING DETERMINANTS THEORY                          Environmental factors                            Market factors       ...
BUYING CENTER ROLES                     PERSON                                       ROLE•Secretary                       ...
DIMENSIONS OF BUYING CENTERS•   TIME DIMENSIONS    •   TIME IS HIGHLY FRAGMENTED: Many participants for short        time ...
TIME FRAGMENTATION INFLUENCES         SELLER’S MARKETING EFFORTS                                  INVOLVEMENT INFLUENCE   ...
RECOGNIZING THE                     BUYER’S DILEMMA: RISK    THERE ARE THREE KINDS OF RISK TO OVERCOME•   FINANCIAL RISK  ...
OVERCOMING RISK•   THREE OPTIONS BUYERS USE TO REDUCE    RISK          •        GATHER MORE INFORMATION FROM              ...
USING INFORMATION TO REDUCE RISK     SOURCES OF INFORMATION                Personal selling                 Personal selli...
BEHAVIOR CHOICE MODEL1.   IDENTIFY SITUATION     Company and self-orientation2.   EVALUATE PERSONAL RELEVANCE     Determin...
EXPANDED BUYING DETERMINANTS THEORY                               Environmental factors                                   ...
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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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