1. The Organisation as Consumers Part 5 in Text book

2. Basic Framework Motivation Perception Search Evaluation Choice
Learning

3. Characteristics of Business Markets
Fewer but larger buyers
Demand often derived from consumer
demand - e.g. car industry buys steel
because consumers buy cars
Buying unit differs - more rational
approach, more people involved
Buying process usually more
formalised

4. Marketing Mix - key differences
Greater degree of negotiation
Bid pricing may be involved
Greater emphasis on personal selling
Increasing use of e-commerce,
extranets,
Distributors and agents may be
involved

5. Decision Making Unit (DMU)
User -end user, may initiate request and help specify
Influencer –technical personnel or specialists, help specify, provide information
Buyer -formal authority holders, help specify, select vendors, negotiate
Decider -final approver (often also buyer)
Gatekeeper –control information flow to others, can prevent sales people gaining access

6. Types of Buying Decisions
Straight Rebuy
Modified Rebuy
New Task

7. Straight re-buy - goods re-ordered without modification
Modified re-buy - opportunity for competitors to enter discussions, essential service quality is good
New buy - greater risk or cost, the fuller decision making unit involved

8. Steps in the Organisational Buying Decision Process
Problem Recognition
Information Search
Alternate evaluation
Purchase Decision
Product Usage
Ongoing Evaluation

9. Problem Recognition New Task? SR MR
Remember a problem is not necessarily bad…

10. Information Search
More Structured than consumer but still uses similar sources…
Trade / Industry sources – directories, Magazines, exhibitions…….
Supplier salesmen

11. Alternative Evaluation
Specification Brief = exact requirements
Tender Process

12. No one got fired for buying an IBM (computer)
Purchase Decision
Supplier Credentials
Quality Systems
Reputation
Terms and Conditions
Quality / Reliability / Support
No one got fired for buying an IBM (computer)

13. Product Usage On going performance Actual Product Delivery
Contractual obligations met…

14. Factors influencing industrial buying behaviour
ENVIRONMENTAL
Levels of demand
Economic prospects
Interest rates
The pace of technological change
Political and legal structures
Competitive structures

15. Factors influencing industrial buying behaviour
ORGANISATIONAL
Objectives
Policies
Structures
Systems & degree of centralisation
Processes and procedures
Managerial attitudes to risk
Financial resource
Previous experiences

16. Factors influencing industrial buying behaviour
BUYING CENTRE
Roles in DMU
Group processes
Interpersonal interactions

17. Factors influencing industrial buying behaviour
INDIVIDUAL
Personal objectives
Job position
Attitude to risk
Previous experiences
Technical knowledge
Motivation

18. Firmographics A way of profiling like consumer analysis – segmentation
SIZE, ACTIVITIES, OBJECTIVES, OWNERSHIP, SEVEN S’s

19. Organisational segmentation
Macro-segmentation
! size of organisation
! location
! industry sector
! end use
Micro-segmentation
! DMU structure
! decision process
! buy class
! type of purchasing organisation
! innovation level
! purchasing strategy

20. Organisational Culture
Mckinsey 7 S’s
From yesterday….

21. The 7S Framework Staff Strategy Systems Structure
Strategy
Systems
Structure
Superordinate Goals / Shared Values
Style
Skills
   

22. Strategy is the key What is a strategy?
Strategy is a coherent set of actions aimed at gaining a sustainable advantage over the competition..
Integrated plan for development of marketing orientation SYSTEMS/STRUCTURE
Formalised definitions of markets and mission -SHARED VISION/STYLE
Detailed specification of marketing objectives
Commitment to implementation SKILLS/STAFFING

23. Shared values
The ideas of what is right and desirable - the mores of the organisation / individuals
Typified by catch phrases / sound bites
“We will become a fully customer driven organisation
Customers come first
Marketing expenditures are an investment
Service is paramount” ??

24. Style The way that management behaves...
Top management support - visible commitment to customer related activities
Open communications between all functional groups and marketing staff
Recognition/reward of customer /market oriented behaviour

25. Structure Clearly defined responsibilities and reporting lines
Key accounts - recognising important customers
Decentralised marketing staff to provide close and fast support to customers
Staff rotation of non-marketing staff through customer contact positions

26. Systems Procedures and processes Information - flow
Customer intelligence
Competitor intelligence
Marketing planning and control systems
Providing information to customer facing staff
Process easy for both customers and staff.

27. Skills/Staffing
People in the organisational rather than personal context
Recruitment of people with requisite skills / ability to acquire
Provision of adequate number of customer service staff
Marketing training -programmes and market
Analytical skills in segmentation

28. China Southern Buying new aircraft.
What is the buying decision process?

29. HAUT
New IT System
What would be important in the buying decision?

30. Mars Confectionery New packaging for new product?
What would be important in the buying decision

31. Zara New supplier for garments
What would be important in the selection process?

32. Appointment of a new Advertising Agency.
Decision
Importance
Needs of the firm..

33. Basic Framework Motivation Perception Search Evaluation Choice
Learning