Organisations as Customers Week 4 Lecture 3 Chapter 19

Key Points of Buyer Behaviour in Organisations What do organisations buy? Organisations are made up of individuals! Purchasing Situations DECISION MAKING PROCESS DECISION MAKING UNIT -Buying centre FIRMOGRAPHICS

Organizational Buyers Types – Industrial – Reseller – Government and non- profit organizations Purchase types – Straight rebuy – Limited decision making – Extended decision making Characteristics – Greater involvement – Bureaucracy – Long term relationships – Price is important but may not be the most important factor

Organisational Culture External(ised) Factors Firmographics – Demographics Size Scale... Activities – Organisational Goals Location Industry Structure / History Organisational composition Political Factors - Trains Bombardier

McKinsey 7 S’s framework for organisational culture Structure Staff Systems Strategy Skills Style Shared Values

Organisations are made up of individuals Organisations tend to recruit like minded people. And or train people in their ways and mores.. Importance of senior management in setting the tone.

Organisational Values – innovative organisation Risk taking – admired and rewarded. Competition is more important than co-operation Hard work comes before leisure Individual efforts take precedence over collective efforts Any problem can be solved Active decision making is important; passive decision makers will not survive Change is encouraged and actively sought Performance is more important than rank or status

Organisational Differences Ownership Shareholders Structure Hierarchical ? Flat? Communication Systems Responsibility Freedom to make mistakes.

Differences between Consumer and Organisational Buying Decisions – Quantity – Value – Risk – Process – DMU

Buying Situations Straight Rebuy Modified Rebuy New Buy

Buying Situations Straight Rebuy An organisational purchase situation where standard items are repurchased often under a contract; or items of a commodity type. Packaging – Ingredients - Components Purchase is routine often automatic - EPOS. Items often subject of annual negotiation

Buying Situations Modified Rebuy Product is modified Market situation may have changed. Significant supplier changes

Buying Situations - New Buy Also known as New Task. Organisation is purchasing for the first time goods or services or hybrid.. For the first time...Often of major significance, risk, impact.. New machinery – 3D printer? Phone system – tablets for all, new advertising media / promotional agency – website?

The Decision Making Unit Gatekeeper Decider User Influencer

Organisational Buying Situations - Real examples New Advertising Agency New Display Boxes