Page 89 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes Discuss the factors affecting organisational buying behaviour
Summarize the organisational buying decision process
Classify the organisational buying roles

Introduction

In the previous unit you learnt about behaviour of individual consumer or retail consumers and
in this unit you are going to learn about behaviour of business/organisational buyer. Business
purchases are described as “rational” or “economic.” Whether for-profit or not-for-profit,
organisations are composed of individuals performing various activities, including making
purchase decisions and are influenced by marketing inputs, which appear not to be purely
rational or economic. Huge sums of money are spent on business-to-business marketing every
year and to spend this money wisely requires a clear understanding of organisational buyer
behaviour us needed. Understanding purchase behaviour in the context of organisations requires
many of the same concepts and skills necessary to understanding behaviours of individual
consumers or households. Organisations are larger and complex entities and develop preferences,
memories and behaviours through perceptions, information processing and experience. An
organisation develops its culture (called corporate culture) that determines relatively stable
patterns of behaviours over time and across situations.
Organisations make decisions ranging from routine replacement purchases for a frequently
purchased commodity product such as pencils or paper. On the other extreme, the decisions
might involve new, complex purchase decisions requiring careful problem definition, extensive
internal and external search for information, a detailed and often highly technical evaluation
process, a negotiated purchase and a long period of use and post-purchase evaluation.

4.1 Business-to-Business Market: Classification of Business
Customers

Organizational buyers come in several forms. Agricultural buyers include the farmers, farm
owners, warehouse owners, intermediaries etc. They purchase materials for producing, stocking,
preserving or distributing the agricultural products.

Example: Farmers need land, seeds, tractors, fertilizers, transportation etc.
Resellers involve either wholesalers or retailers that buy from one organization and resell to
some other entity.

Example: Large grocery chains sometimes buy products directly from the manufacturer
and resell them to end-consumers. Wholesalers may sell to retailers who in turn sell to consumers.
Producers also buy products from sub-manufacturers to create a finished product.

Example: Rather than manufacturing the parts themselves, computer manufacturers
often buy hard drives, motherboards, cases, monitors, keyboards, and other components from
manufacturers and put them together to create a finished product.
Governments buy a great deal of things.

Example: The military needs an incredible amount of supplies to feed and equip troops.
Services provide intangible goods like banking, education, airlines, healthcare and they also
need products like furniture, dresses, land, paper, computers, and printers.

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