Industrial Buyer Behaviour
Industrial buyer behaviour
Types of organizational markets The government are a major purchaser of health, defence, social security, transport, communications and education the government use a complex buying procedure using bids the EU law states that government is not allowed to protect its own industries by favouring domestic bids but must be seen to accept the lowest bid.
Institutional markets are organizations with non business goals like education centres and charities organizations selling goods to these kind of markets will have sales staff dedicated to that organization for example computer sales to education centres.
Producer markets include buyers of raw materials, semi finishes and finished items, demand for industrial products is derived from that for consumer products,
Reseller markets are the subsidiaries in the supply chain between the manufacturer and the consumer the main ones are wholesalers and retailers but wholesalers numbers have dropped whilst the purchasing power has moved to ever-growing retailers.
Organisational buying centre
High value purchases involve many different people all playing different roles in the purchasing decision.
Users- people that use the product should be involved an important role
Influencers- product experts, provide information about the product
Gatekeepers- control the flow of information
Buyers- negotiate the purchase transaction and carryout the administration
Deciders- have the authority to make final decision ( senior management)
Business to business buying process
Early models
Need recognition - Determination of product specifications – supplier selection – commitment.
Evaluation of model
Decision process is seen as a logical sequence
Conflicts may arise between different parties in the buying centre.
Views business to business buying as completely specified and nothing left to chance.
Difference between business to business and consumer buyer behaviour.
Price is less elastic
Types of organizational markets The government are a major purchaser of health, defence, social security, transport, communications and education the government use a complex buying procedure using bids the EU law states that government is not allowed to protect its own industries by favouring domestic bids but must be seen to accept the lowest bid.
Institutional markets are organizations with non business goals like education centres and charities organizations selling goods to these kind of markets will have sales staff dedicated to that organization for example computer sales to education centres.
Producer markets include buyers of raw materials, semi finishes and finished items, demand for industrial products is derived from that for consumer products,
Reseller markets are the subsidiaries in the supply chain between the manufacturer and the consumer the main ones are wholesalers and retailers but wholesalers numbers have dropped whilst the purchasing power has moved to ever-growing retailers.
Organisational buying centre
High value purchases involve many different people all playing different roles in the purchasing decision.
Users- people that use the product should be involved an important role
Influencers- product experts, provide information about the product
Gatekeepers- control the flow of information
Buyers- negotiate the purchase transaction and carryout the administration
Deciders- have the authority to make final decision ( senior management)
Business to business buying process
Early models
Need recognition - Determination of product specifications – supplier selection – commitment.
Evaluation of model
Decision process is seen as a logical sequence
Conflicts may arise between different parties in the buying centre.
Views business to business buying as completely specified and nothing left to chance.
Difference between business to business and consumer buyer behaviour.
Price is less elastic