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INDUSTRIAL BUYER

Individual in a business, government agency, or association who makes purchase decisions regarding services, raw materials, product components, or finished goods; also called organizational buyer. Industrial buyers are more, but not solely, motivated in their buying decisions by profit objectives than by personal objectives and require different marketing strategies than consumer buyers. 

Organizational Buying Process

1. Problem Recognition

2. General Description

of Need

3. ProductSpecifications

4. Supplier Search

5. Acquisitionand Analysisof Proposals

6. Supplier Selection

7. Selectionof

Order Routine

8. PerformanceReview

Three Buying Situations (slide 1 of 4)

1. New task2. Modified rebuy3. Straight rebuy

Three Buying Situations1. New Task (slide 2 of 4)

New task—the problem or need is totally different from previous experiences.

Significant amount of information is required.Buyers operate in the extensive problem solving stage.

Buyers lack well defined criteria.Lack strong predispositions toward a solution.

Three Buying Situations2. Modified Rebuy (slide 3 of 4)

Modified rebuy—decision makers feel there are benefits to be derived by reevaluating alternatives.

Most likely to occur when displeased with the performance of current supplier.Buyers operate in the limited problem solving stage.

Buyers have well defined criteria.

Three Buying Situations3. Straight rebuy (slide 4 of 4)

Straight rebuy—the problem or need is a recurring or continuing situation.

Buyers have experience in the area in question.Require little or no new information.Buyers operate in the routine problem solving stage.

Buying Decision Approaches

Causal purchases…involve no information search or analysis.

Routine low priority…decisions are more important and involve a moderate amount of analysis.

Forces Influencing Organizational Buying Behavior

EnvironmentalForces

OrganizationalForces

GroupForces

IndividualForces

OrganizationalBuying

Behavior

•Economic Outlook: Domestic & Global•Pace of Technological Change•Global Trade Relations

•Goals, Objectives, and Strategies•Organizational Position of Purchasing

•Roles, relative influence, and patterns of interaction of buyingdecision participants

•Job function, pastexperience, and buyingmotives of individualdecision participants

A projected change in business conditions can drastically alter buying plan.

Perceived Risk Components

1.Uncertainty about the outcomes of a decision.

2.The magnitude of consequences associated with making the wrong selection.