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AD 4.2
This ad illu strates org an iza tion ')e havio r decisi on criteria.
Five characteristics mark the organizational buying process:
1. In organizations, many individuals are involved in making buyi ng decisions,
2. The organizational buyer is motivated by both rajonal and quanti tative criteria
domi nant in
organizational decisions; the decision makers are people, sub-
ject to
the same emotional criteria used in personal purchases.
ORGANIZATIONAL BUYER
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3. Organizational buying decisions frequently involve a range of complex technical
dimensions . A purchasing agent for Volvo Automobiles, for example, must con-
sider a number of technical factors before ordering a radio to go into the new model.
The electronic system, the acoustics of the interior, and the shape of the dashboard
are a few of these considerations.
The organizational decision process frequently spans a considerable time, creat-
ing a significant lag between the marketer's inItial contact with the customer and
the purchasing decision. Since many new factors can enter the picture during this
lag time, the marketer's ability to monitor and adjust to these changes is critical.
5. Organizations cannot be grouped into precise categories. Each organization has
a characteristic way of functioning and a personalityJo
The first item in this list of characteristics has important implications. Unlike the consumer
buying process, organizational buying involves decision making by groups and enforces
rules for making decisions. These two characteristics greatly complicate the task of under-
standing the buying process. For example, to predict the buying behavior of an organiza-
tion with certainty, it is important to know who will take part in the buying process, what
criteria each member uses in evaluating prospective suppliers, and what influence each mem-
ber has. It is also necessary to understand something not only about the psychology of the
individuals involved but also how they work as a group. Who makes the decision to buy
depends in part on the situation. Three types of buying situations have been distinguished:
the straight rebuy, the modified rebuy, and the new task.
The straight rebuy is the simplest situation: The company reorders a good or service
without any modifications. The transaction tends to be routine and may be handled totally
by the purchasing department. With the modified rebuy , the buyer is seeking to modify product specifications, prices, and so on. The purchaser is interested in negotiation, and several
participants may take part in the buying decision. A company faces a new task when it considers buying a product for the first time. The number of participants and the amount of
information sought tend to increase with the cost and risks associated with the transaction .
This situation represents the best opportunity for the marketer.
Stages in Organizational Buying
The organizational buying process contains eight stages, or key phrases, which are listed
in Figure 4.3. Although these stages parallel those of the consumer buying process, there
are
differences that have a direct bearing on the marketing strategy. The com-
plete process occurs
in the case of a new task. Even in this situation, however, the process
is far more formal for the industrial buying process than for the consumer buying process.
Most of the information an industrial buyer receives is delivered through direct con-
tacts such as sales representatives or information packets. It is unlikely that an industrial
buyer would use information provided through a trade ad as the sole basis for making a
decision.
1. Problem recognition. The process begins when someone in the organization rec-
ognizes a problem or need that can be met by acquiring a good or service. Prob-
lem recognition can occur as a result of internal or external stimuli. External stimuli
can be a presentation by a salesperson, an ad, or information picked up at a trade
show.
2. General need description. Having recognized that a need exists, the buyers must
add further refinement to its description . Working with engineers, users, purchasing
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