Ch. 19: Organizational Decision Making OEMs (Original Equipment Manufacturers). End Users Resellers Government Institutions

Members of the Buying Center Unlike consumer decision, organizational buying often involve more than one person. These people comprise the buying center and may play one or more roles in the buying center:

Members of the Buying Center (cont.) The size and complexity of the buying center is determined by factors such as: complexity of the product importance of the purchase familiarity with the product offerings and vendors The buying center often changes from one purchase to the other.

Group Decision in Buying Center Group Polarization: after group discussion members become more extreme in the direction of initially favored alternative. Information sampling (are likely to discuss on shared information)

Steps in the Buying Process Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review What is the implication of this buying process?

Business Buying Situations New Task Buying New Task Buying Straight Rebuy Straight Rebuy Modified Rebuy Modified Rebuy Types of Business Buying Situations Types of Business Buying Situations

Characteristics of Different Buying Situations

Interdepartmental Interface Marketing Engineering Purchasing Finance

Interdepartmental Conflict Differences in value/ reward system lead to interdepartmental conflict. Such conflict is high in: uncertainty environments complex, new decision Qs: 1) How can we reduce interdepartmental conflict in organizational buying decisions?

Overall Model of Organizational Buyer Behavior EXTERNAL INFLUENCES Firmographics Culture Government Reference Groups Marketing Activities INTERNAL INFLUENCES Organization values Perception Learning Memory Motives Emotion SITUATIONS Problem recognition Information search Alternative evaluation and selection Outlet selection and purchase Postpurchase processes SITUATIONS ORGANIZATIONAL CULTURE NEEDS/DESIRES EXPERIENCES AND ACQUISITIONS