Consumer buying behaviour - Industrial Buyer

1. INDUSTRIAL BUYING BEHAVIOUR

2. Purchasing Objectives
 Delivery/ availability
 Product Quality
 Lowest price
 Services
 Supplier relationship
 Personal objectives:
 Higher status
 Job security
 Salary increments & promotions
 Social considerations

3. Phases in Industrial buying decision
process
Technically known as Buy phases
 Recognition of a problem or need
 Determination of the characteristics and quantity
needed
 Development of the specifications of the product
 Search for qualifications of potential suppliers
 Obtaining and analysing supplier proposals
 Evaluation of proposals and selection of suppliers
 Selection of an order routine
 Performance feedback and post purchase evaluation

4. Recognition of a need
 The recognition of a problem or need may originate
within a buying firm or also may be recognised by a
smart marketing guy…
 Reasons for need arousal:
 When the quality of material supplied is not satisfactory
 When the material is not available with the supplier
 When the machine supplied breaks down very often

5. Determination of characteristics
and quantity of the product
 What type of products are needed and in what
quantity?
 For technical products – the technical department
takes the decisions (R & D, production, quality
control)
 For non-technical products – either the user
department or the purchase department

6. Development of specifications of
needed product
 Once the product and quantity is decided, the
specifications are decided.
 Opportunity for industrial marketers to get involved in
this stage of the decision making process.
 Concept of Early Supplier Involvement (ESI) program.
 Also known as Early Purchasing Involvement (EPI)
program

7. Search for qualifications of
potential suppliers
 First step is to get information on all available
suppliers
 Sources – trade journals, sales calls, word-of-mouth,
catalogues, trade-shows and industrial directories
 Qualifications are based on the purchasing objectives.

8. Evaluation of proposals and
selection of suppliers
 Factor analysis of all the suppliers
 (quality, delivery, price, service, flexibility)
 Selection of an order routine
 The activities involved in this step are:
 Placement of orders
 The quantity to be purchased from each supplier
 Frequency of order placement
 Levels of inventory needed
 Follow up of actual delivery
 Payment terms

9. Performance feedback and post
purchase evaluation
 Getting feedback is most important process.
 Three benefits of retaining existing customers:
 Repeat orders
 Referrals
 Cross selling

10. Buying Situations
New purchase (or New Task)
 In this situation, the firm is buying for the first time.
 Here, the risks are more
 Decisions may take a longer time
 More people are involved in decision making
Modified Rebuy (or Change in Supplier)
 This situation occurs when the customer is not satisfied
with the existing vendor
Straight Rebuy (or Repeat Purchase)
 Here, the customer is satisfied with the existing vendor

11. Buying Center Roles
 The buying center is sometimes referred to as the
decision making unit (DMU) or the buying group.
 There are 6 roles of buying center members:
 Initiators
 Buyers
 Users
 Influencers
 Deciders
 Gatekeepers

12. Identifying key DMU members
 Top management persons
 Technical persons
 Purchase department persons
 Accounts/ finance persons
 Marketing function persons