CHAPTER 3
BUYING BEHAVIOR AND THE BUYING PROCESS
Outline of Chapter
I. Types of Customers
A. Producers
B. OEM Purchasers
C. End Users
D. Resellers
E. Government Agency
F. Institutions
G. Consumers
II. Organizational Buying and Selling
A. Complexity of the Buying Process
B. Derived versus Direct Demand
III. How Do Organizations Make Buying Decisions?
A. Steps in the Buying Process
1. Recognizing a Need or Problem (Step 1)
2. Defining the Type of Product Needed (Step 2)
3. Developing Product Specifications (Step 3)
4. Searching for Qualified Suppliers (Step 4)
5. Acquiring and Analyzing Proposals (Step 5)
6. Evaluating Proposals and Selecting a Supplier (Step 6)
7. Placing an Order and Receiving the Product (Step 7)
8. Evaluating Product Performance (Step 8)
B. Creeping Commitment
IV. Types of Buying Decisions
A. New Tasks
B. Straight Rebuys
C. Modified Rebuys
V. Who Makes the Buying Decision?
A. Users
B. Initiators
C. Influencers
D. Gatekeepers
E. Deciders
VI. Supplier Evaluation and Choice
A. Organizational Needs and Criteria
1. Economic Criteria
2. Quality Criteria
3. Service Criteria
B. Individual Needs of Buying Center Members
1. Types of Needs
2. Risk Reduction
VII. Professional Purchasing’s Growing Importance
A. Supply Chain Management
B. Supply Relationship Management
C. The Internet and Business-to-Business Selling
VIII. Selling Yourself
APPENDIX: Multi-Attribute Model of Product Evaluation and Choice
A. Performance Evaluation on Characteristics
B. Importance Weights
C. Overall Evaluation
D. Value Offered
E. Supplier Selection
F. Implications for Salespeople
Teaching Suggestions
1. Ask students to read through the opening profile of Taylor Dixon of 3M. What is her sales strategy? Why
do customers buy from her? This kind of discussion gets at the issue of value and you can talk about the
differences between what retail buyers want and what a company’s purchasing agent might want. Then,
have them read the Building Partnerships box, and discuss Camille Sandler’s customers for dermatological
surgery products. Have students discuss the goals surgeons and hospitals might have for her product and
how their goals may differ, as well as the goals of a patient. This discussion will help you move toward the
other types of buyers. Create a chart on the board that describes the differences between these customers in
terms of how they buy and how you would sell them. Ask students how they differ in terms of the needs
they have, the importance of price versus product performance, the importance of the purchasing agent
versus other buying center members, the number of people typically in the buying center, and their
tendency to develop long-term relationships with suppliers?
1. Next, discuss the difference between the way organizations buy and the way consumers buy. Talk about
how the buying process differs with respect to geographic concentration. Also discuss how the buying
process used by consumers can also vary in terms of complexity. Ask students to describe a complex
buying decision that they were involved in (such as buying a car) and a simple decision (buying a soda).
Have them describe these decisions and then contrast the descriptions in terms of the number of people
involved in the decision, the length of time needed to make the decision, and the number of alternatives
considered. You can also walk them through the Multi-Attribute Matrix by comparing several students’ car
purchases. Alternatively, you can break them into groups and have them build a matrix for a purchase
within the group, then compare the matrices in class. Exercise 3.1 (later in this IM) can be useful for this
exercise and you can use it to create your own car-buying matrix to compare with students’.
Points to be discussed using this matrix.
a. The overall scores are the value of the benefits delivered by each product to the student. Typically the
student will have bought the product with the highest score because it provides the highest value.
b. How would a salesperson selling the lowest valued alternative convince a student to buy that
alternative? What numbers in the table would the salesperson try to change?
Possibilities are:
1. increase the performance of evaluation of the low-score product.
2. decrease the performance value of the high-score product.
3. increasing the importance weight of a characteristic on which the low-score product has superior
performance.
4. decreasing the importance weight of a characteristic on which the high-score product has superior
performance.
c. Ask students which of these approaches is the easiest to accomplish? And why?
Ask your students if any of them use this model to make their decision to buy something
important like a car. Many times they will say that they don’t. Yet, if you ask them why they
bought what they bought, they can rattle off a few features that they preferred over another brand
or model. Push a little more and they realize that there were other considerations (attributes) that
they used.
Then point out that buying centers make decisions in organizations, and many times the multi-attribute
model is formalized. For example, many organizations use a list of criteria to evaluate suppliers. They
don’t use these as yes/no questions; rather, they use these to arrive at a score. Similarly, Rockwell
International scores vendors on things such as on-time delivery, accurate delivery, and the like. They then
make decisions about which vendors to retain based on these scores, and they gather similar data from
potential vendors when assessing whether to do business with them. This discussion can lead directly into
the next point
2. This discussion leads nicely into a discussion of the different types of buying decisions. Now have students
describe a buying decision they made that was a straight rebuy such as buying a loaf of bread, a new task
(renting an apartment or buying a car for the first time), and a modified rebuy (finding a new apartment
when their lease expires, buying a new brand of soda on sale, etc.). Have students describe a situation
when they switched from a straight rebuy to a modified rebuy. Ask them why they switched? Also ask
what a salesperson can do to get a customer to switch?
Ask students to provide an example of when they engaged in a new task. Did they evaluate several
alternatives? Why did they evaluate several alternatives? Ask students for examples of financial, physical,
and social risks.
4. This is now a good time to analyze the decision-making process by breaking it down into a series of logical
steps. Relate these steps in the buying process to the process that students go through when buying a loaf
of bread, renting an apartment, and buying a car. Ask students to describe how the buying process differs
for a new task, a modified rebuy, and a straight rebuy. Which steps are the most important for a salesperson
to be involved for each type of buying decision?
5. Describe the functions and relative importance of the user, the influencer, the gatekeeper, and the decider,
especially as they relate to the various steps in the buying process. The controller determines the budget.
Users can be initiators, but also passive influencers.
One way to incorporate the Miller-Heiman perspective is to ask students to compare and contrast that view
with the buying center – are these competing views of the buying unit or complementary?
6. Start to wrap-up by discussing the trends in organizational buying. For each of these trends, ask students
what the effect will be on salespeople. Ask them what will salespeople have to do to deal effectively with
these changes? How will the changes affect the relationship between the salesperson and his or her
customers and their companies? Some of the trends include technology and the economy, but ask them to
think about what it will be like to sell to their parents’ peers. Trends that reflect generational differences are
important because our students do sell to their parents’ peers!
7. Conclude this session with a comparison of the selling and buying processes. Show how the subsequent
chapters on the selling process match the steps in the buying and adoption process outlined in this chapter.
Suggested Answers to Ethics Problems
1. You sell services to city and county governments that help lower their costs in billing for
services like water, trash collection, and the like. Your company is owned by two African
American sisters. The mayor of a major city in your territory has publicly stated that the city
has reached its goal of buying 15 percent of its services from women and minority-owned
businesses, yet you’ve heard it said that the city is buying only about 5 percent from women
and minority-owned business. To make matters worse, you can’t get an appointment with the
head of utilities but you know for a fact that your company could reduce operating costs by
almost 20 percent. What do you do?
This scenario is based on a real situation in which a minority-owned business failed to be
considered and the owner threatened to take his case to the media. It was only after the city
promised to audit its purchasing that he backed down. So threatening to blow the whistle in
leverage the cost advantage, then use a satisfied customer to get an introduction.
2. You are talking about this class to your parents, when they say, “What are they doing? Teaching
you how to manipulate people by using their buying style against them?” How do you
respond?
We discussed in Chapter 2 the difference between persuasion and manipulation but there are
some concepts in this chapter that require some review. For example, understanding buying
centers and using that information to persuade simply means giving people the information they
Suggested Answers to Questions and Problems
1. Assume that the federal government is going to make reducing childhood obesity a national
priority. The process they have adopted includes reducing sugar content in children’s cereals,
making vegetables more palatable, and reducing fat in the overall diet. Identify three product
categories (not including vegetables) for which derived demand would influence manufacturers
and producers of consumer packaged goods (foods sold to be cooked and/or eaten at home).
Include at least one product affected positively and one affected negatively.
This could be answered any number of ways, but some product categories would be artificial
2. Re-read Building Partnerships 3.1. Camille Sandler described four types of buyers based on
whether they were willing to consider a new innovation. What are some other ways she could
classify buyers? How can she work with a contracting department run by someone who is not
willing to innovate?
3. Assume you are a salesperson selling to OEMs. How would the purchasing decision process
differ in the following situations? Which situation is a new task? A modified rebuy? A straight
rebuy? How likely is the buyer to get other people in the organization involved? Which types of
people are likely to get involved in each decision? Whom would you call on first? Which
situation is likely to produce the slowest decision?
a.The organization is purchasing a custom-designed machine to be used in the manufacturing of metal
racks that house multiple monitoring systems.
This is a complex decision that is a new buy. Each step in the process outlined in Exhibit 4.1
4. Review each of the purchases in Question 3. What information would you need to conduct a value
analysis for each? Note, you will need some different and some similar information in each
situation.
In general, the information needed involves the benefits derived, the needs being met, the prices
being offered, and the effort required to make the purchase. Specific to a), needs would vary
5. A chain of restaurants wants to purchase a new order entry computer system tied into an
accounting system that manages food inventory and automatically replenishes food items. Which
criteria for evaluating supplier proposals might be used by (a) the purchasing agent, (b) the
information systems department, (c) a store manager, and (d) the head of the legal department?
How would this purchase differ from a purchase of the same products by a company that resells
store fixtures and equipment to small restaurants?
Criteria used by different members of the buying center might be:
purchasing agent Information systems department
cost technical performance
delivery time use of state-of-the art technology
endorsements by other companies
that have used the register
reliability
6. Fastenal sells maintenance, repair, and operations supplies. One of its
strategies is to put vending machines on customers’ sites, particularly for
small tools, so that Fastenal carries the cost of inventory and the customer
pays for it only when the product is actually needed. You have an account
with the potential to be your largest, but it is under contract to a vendor that
doesn’t provide that service. The contract expires in six months. What do you
7. When is vendor loyalty important to the buyer? Find at least one example in the chapter (there are several)
where vendor loyalty would prove to be important and discuss why it was important in that particular
instance. What can buyers do to improve vendor loyalty? When might vendor loyalty be inefficient or
wasteful? Does it matter whether the loyalty that the buyer tries to curry is with the salesperson or the
company?
Loyalty can be very efficient because it minimizes the time and effort needed to make a buying decision.
When a firm is loyal to a supplier, there is no need to involve a number of people in each decision and go
through all the stages in the buying process illustrated in Exhibit 4-1. In the Smithfield example, loyalty by
a store to Smithfield can result in having more influence in new product development or promotional plans,
as well as first choice in promotions.
8. Create a matrix of types of needs and types of customers. Which customer types share the same
types of needs or express needs in the same way? Which ones differ? Why? Relate your chart to
the multi-attribute matrix. How would your chart help you prepare to sell?
This question could be interpreted to mean role in the buying center. An initiator might more closely
resemble (or be) a user, and probably an influencer; the controller would weight financial aspects more
9. Mitchell’s Metal Shop is considering the purchase of a new press, a machine that bends sheet
metal. The cost is $10,000, which is about 25 percent of the firm’s profit for the quarter. Ford
Motor Company is also considering buying about 30 new presses. Discuss how risk is different
for Frank Mitchell, owner of Mitchell’s Metal Shop, and Ford.
The risk is far greater for Frank, and could be considered catastrophic, meaning if he makes a
10. How would your multi-attribute matrix for a new car differ from your parents? How is it you might have
some of the same desires (for example, high gas mileage) yet consider completely different cars?
If dad is having a mid-life crisis, maybe there wouldn’t be much difference! Style, though, is the one