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Organizational
buying behavior
B2B Marketing
Mag. Maria Peer2
Organizational buying
behavior
 Consumer vs. Organizational buying
behavior
 Main types of buying situations in
B2B
 Stages of decision in B2B
 Roles in B2B procurement
 Influences on organizational behavior
 Buying centres in summary
Mag. Maria Peer3
Consumer vs. Organizational
buying behavior
 Decisions made by consumers are quite simple
 Organizational buying processes are more
complicated, there are several phases and steps
 Different buying behavior for different products and
target groups
 Simple consumer goods like food and beverages are
bought very spontaneously – influenced by advertising
and product presentation
 For premium consumer goods (expensive clothes,
computers) – buying behavior is getting more rational
– comparison
 Private investment goods – price bargaining
Mag. Maria Peer4
B2B products – organizational
procurement starts
 More than one person involved
 Buying process follows certain rules
 Price comparison, standardisation,
tenders = Ausschreibungen)
Mag. Maria Peer5
B2B systems
 involve more capabilities and greater
workloads
 From the buyer‘s and the supplier‘s
side decision has more extensive
consequences
Mag. Maria Peer6
B2B facilities
 Industrial plants
 Manufacturing installations
 Office buildings
Mag. Maria Peer7
Main types of buying
situations in B2B
 Straigtht rebuy – routine decision, repetitive process
(energy, office supplies, raw materials, wood,
cigarettes), component suppliers for the automotive
industry – little or no new information
 Modified rebuy – more complicated but less
sophisticated: cars, trucks, computers, consulting –
modified rebuys are often treated too uncautious
 New task – calls for thorough research – industrial
plant – highest level of uncertainty. Strategic new tasks
are of extreme strategic and financial importance
(aircrafts, military equipment, infrastructure) – re-
evaluation of alternatives and search for new
information and new alternatives
Mag. Maria Peer8
Buying phases
 Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order routine specification
 Performance review
Mag. Maria Peer9
Stages of decision in B2B
procurement
 Backhaus developed a widely usable model
to distinguish between 5 phases of
procurement
 Preliminary application (initiation phase)
 Tender proposal
 Negotiation
 Processing of order
 Warranty and services
Mag. Maria Peer10
Preliminary application
 Recognition of a problem (need) and
a general solution
 Released by top management =
operating department or external
consultants
 Result  request for an offer
addressed to a number of potential
suppliers
Mag. Maria Peer11
Tender preparation phase
 Determination of characteristics and
quantity of needed items
 Search for and qualification of potential
sources
 Supplier has to provide an offer
 Tries to be incomparable with his
competitors
 Customer tries to make the offer best
comparable
Mag. Maria Peer12
Negotiation phase
 = core selling process
 Comprises acquisition and analysis of
proposals, evaluation of proposals
and selection of suppliers
Mag. Maria Peer13
Processing phase/warranty/
service phase
 Contains selection of an order routine
 Realisation of the transaction along
with the fixation of after sales service
tasks
Mag. Maria Peer14
Roles in B2B procurement –
buying center concept
 Group of people involved in the
buying process – buying center
 Webster/Wind model shows 5
different roles – not institutionalised
 This causes probleme in identifying
and targeting the right people within
the decision process
Mag. Maria Peer15
Buying center
 Role keepers have different tasks –
not mandatory
 Buyer
 User
 Initiator
 Gatekeeper
 Influencer
Mag. Maria Peer16
Buyer
 Formal authority to sign contracts
 Member of purchasing department
 Influences the vendor selection
 Not in technical details
 Main criteria: price + terms and
conditions of the contract
Mag. Maria Peer17
User
 Person working with the product
 Interested in benefits and
unobstructed function of the product
to buy
 Large knowhow and preconceived
opinion
Mag. Maria Peer18
Influencer
 A person with high technical
knowledge and practical experience
 definition of minimum requirements
on technical or company standards
Mag. Maria Peer19
Gatekeeper
 Controls the flow of information within
the buying center
 Assistant of decision maker
 Influence by preparing the decision
and the relevant documents
(Scriptum p 33-34 + summary)
Mag. Maria Peer20
Decider
 Right to say yes or no
 Mightiest person
Mag. Maria Peer21
Initiator
 Person who brings new ideas and
solutions into the company
Mag. Maria Peer22
Specific marketing
considerations in the industrial
facilities business
 Long decision taking process
 High risk
 Complex buying center
 The specific competitive situation
Mag. Maria Peer23
Product policy
 Focuses on innovation
 Has to care for high flexibility in
research and development
 And manufacturing and assembling
Mag. Maria Peer24
Price
 Strict bid and tender rules
 High transparency
 Add value with service offering to
achieve a differentiating position
 Another aspect: financing and
sourcing models
Mag. Maria Peer25
Distribution policy
 Focus on negotiation phase
 Provide excellent people in the selling
center
 High technical knowledge
Mag. Maria Peer26
Communication
 Problem solver!
 Proving success with comparable
tasks
 Reference projects!

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Organizational buying-behavior

  • 2. Mag. Maria Peer2 Organizational buying behavior  Consumer vs. Organizational buying behavior  Main types of buying situations in B2B  Stages of decision in B2B  Roles in B2B procurement  Influences on organizational behavior  Buying centres in summary
  • 3. Mag. Maria Peer3 Consumer vs. Organizational buying behavior  Decisions made by consumers are quite simple  Organizational buying processes are more complicated, there are several phases and steps  Different buying behavior for different products and target groups  Simple consumer goods like food and beverages are bought very spontaneously – influenced by advertising and product presentation  For premium consumer goods (expensive clothes, computers) – buying behavior is getting more rational – comparison  Private investment goods – price bargaining
  • 4. Mag. Maria Peer4 B2B products – organizational procurement starts  More than one person involved  Buying process follows certain rules  Price comparison, standardisation, tenders = Ausschreibungen)
  • 5. Mag. Maria Peer5 B2B systems  involve more capabilities and greater workloads  From the buyer‘s and the supplier‘s side decision has more extensive consequences
  • 6. Mag. Maria Peer6 B2B facilities  Industrial plants  Manufacturing installations  Office buildings
  • 7. Mag. Maria Peer7 Main types of buying situations in B2B  Straigtht rebuy – routine decision, repetitive process (energy, office supplies, raw materials, wood, cigarettes), component suppliers for the automotive industry – little or no new information  Modified rebuy – more complicated but less sophisticated: cars, trucks, computers, consulting – modified rebuys are often treated too uncautious  New task – calls for thorough research – industrial plant – highest level of uncertainty. Strategic new tasks are of extreme strategic and financial importance (aircrafts, military equipment, infrastructure) – re- evaluation of alternatives and search for new information and new alternatives
  • 8. Mag. Maria Peer8 Buying phases  Problem recognition  General need description  Product specification  Supplier search  Proposal solicitation  Supplier selection  Order routine specification  Performance review
  • 9. Mag. Maria Peer9 Stages of decision in B2B procurement  Backhaus developed a widely usable model to distinguish between 5 phases of procurement  Preliminary application (initiation phase)  Tender proposal  Negotiation  Processing of order  Warranty and services
  • 10. Mag. Maria Peer10 Preliminary application  Recognition of a problem (need) and a general solution  Released by top management = operating department or external consultants  Result  request for an offer addressed to a number of potential suppliers
  • 11. Mag. Maria Peer11 Tender preparation phase  Determination of characteristics and quantity of needed items  Search for and qualification of potential sources  Supplier has to provide an offer  Tries to be incomparable with his competitors  Customer tries to make the offer best comparable
  • 12. Mag. Maria Peer12 Negotiation phase  = core selling process  Comprises acquisition and analysis of proposals, evaluation of proposals and selection of suppliers
  • 13. Mag. Maria Peer13 Processing phase/warranty/ service phase  Contains selection of an order routine  Realisation of the transaction along with the fixation of after sales service tasks
  • 14. Mag. Maria Peer14 Roles in B2B procurement – buying center concept  Group of people involved in the buying process – buying center  Webster/Wind model shows 5 different roles – not institutionalised  This causes probleme in identifying and targeting the right people within the decision process
  • 15. Mag. Maria Peer15 Buying center  Role keepers have different tasks – not mandatory  Buyer  User  Initiator  Gatekeeper  Influencer
  • 16. Mag. Maria Peer16 Buyer  Formal authority to sign contracts  Member of purchasing department  Influences the vendor selection  Not in technical details  Main criteria: price + terms and conditions of the contract
  • 17. Mag. Maria Peer17 User  Person working with the product  Interested in benefits and unobstructed function of the product to buy  Large knowhow and preconceived opinion
  • 18. Mag. Maria Peer18 Influencer  A person with high technical knowledge and practical experience  definition of minimum requirements on technical or company standards
  • 19. Mag. Maria Peer19 Gatekeeper  Controls the flow of information within the buying center  Assistant of decision maker  Influence by preparing the decision and the relevant documents (Scriptum p 33-34 + summary)
  • 20. Mag. Maria Peer20 Decider  Right to say yes or no  Mightiest person
  • 21. Mag. Maria Peer21 Initiator  Person who brings new ideas and solutions into the company
  • 22. Mag. Maria Peer22 Specific marketing considerations in the industrial facilities business  Long decision taking process  High risk  Complex buying center  The specific competitive situation
  • 23. Mag. Maria Peer23 Product policy  Focuses on innovation  Has to care for high flexibility in research and development  And manufacturing and assembling
  • 24. Mag. Maria Peer24 Price  Strict bid and tender rules  High transparency  Add value with service offering to achieve a differentiating position  Another aspect: financing and sourcing models
  • 25. Mag. Maria Peer25 Distribution policy  Focus on negotiation phase  Provide excellent people in the selling center  High technical knowledge
  • 26. Mag. Maria Peer26 Communication  Problem solver!  Proving success with comparable tasks  Reference projects!