Chapter Three
Organizational Buying & Buyer Behavior
Authors’ Comments
This chapter presents the concept of the buying center and the buying decision
process that one would normally expect in a chapter on organizational buying
behavior. We present the traditional 8-step buying decision process and as a process
with four stages, rather than the numerous steps often depicted. We did this because
the step-wise progression of the process varies from instance to instance, whereas the
stages can usually be identified, even in straight rebuy situations.
The second concept concerns the role of emotion in the buying process. The initial
inspiration for this book owes much to Paul Sherlock’s book, Rethinking Business-to–
Business Marketing (New York: Free Press, 1991). Sherlock noted that buyers often
make their decision very early in the process based on a visceral reaction to the
supplier’s initial value image. The rest of the process is an objective rationalization of
that initial decision. We have tried to capture this idea in this chapter and examine
some of the consequences.
Opening Vignette
Covisint: Illustrating the Importance of Adapting to
Customers’ Buying Behavior
Covisint was the ill-fated attempt by the auto industry to join forces and use the
Internet to lower costs. It is a classic example of what not to do in an industry where
relationships are important and complex and customers and suppliers are intensely
Chapter 3: Organizational Buying & Buyer Behavior 2
competitive.
suppliers and, in fact, Ford and Chrysler had continued to invest in their own systems.
By 2004, Covisint had been through four CEOs, fought issues of technology
compatibility between technology suppliers and been sold to Compuware for $7 million
(that’s right−million!).
Pundits who initially heralded the project blamed the industry for not getting past their
rivalries. While there may be some truth to that, most had ignored the fact that
Learning Objective
Develop an understanding of the difference between quantifiable
organizational needs and the often qualitative process used to fulfill
those needs.
The intricacy of business-to-business purchasing decisions is often not fully
understood. Organizations have complex sets of needs. A Buying Center
member−a professional in a department of the customer’s
PowerPoint 3.2: Consumer Decision Process
The emphasis shown in the slide is that, in reality, this is not a sequential
process, although students will “memorize” it as such.
Consider a discussion of the informal sources of information (and logistics
events) most consumers use for the majority of purchases. Have students
Chapter 3: Organizational Buying & Buyer Behavior 3
Learning Objective
Understand how organizations develop and satisfy the requirements
for selecting and maintaining relationships with suppliers.
The Buying Center Exhibit 3-1 (summarized in PowerPoint 3.3)
The buying center—a collection of individuals with a stake in the buying
decision. Members of the buying center determine, within their own
Major Differences, Organization Buying vs. Consumer Buying
(PowerPoint 3.4)
Learning Objective
Gain an appreciation for the different levels of complexity of decisions
made in the buying process and how the business-to-business
marketer can influence the process.
This learning objective is central to the theme of this chapter.
“Traditional” Business–to-Business Buying Decision Process (Exhibit 3-2 and
Learning Objective
Chapter 3: Organizational Buying & Buyer Behavior 4
Understand how individuals within organizations develop and satisfy
the requirements of their professional responsibilities as dictated by
their organizations and, within that framework, their own individual
needs.
Consider a discussion of each of the following points (PowerPoint 3.6) that
contribute to the intricacy of the process:
• Interaction is fluid, broad based
Buying Center members try to meet three kinds of needs in the decision
process. (PowerPoint 3.7)
• Organization’s Needs
Benefits of the product or service to the organization.
Learning Objective
See how the supplier/customer relationship is the principal defining
factor in the success of business-to-business marketing efforts.
Students are often suspicious when told that relationships and not price are the
most significant factors in business-to-business decision making. While price is
important, past experience with a supplier and the extent of recognition of
common goals contribute to the selection and subsequent success of the
supplier decision.
Process Flow Model (PFM) of the Organizational Buyers Decision Process
Chapter 3: Organizational Buying & Buyer Behavior 5
relate to the traditional process. Subsequent PowerPoint slides 3.9 through
3.12 elaborate on each stage.
PFM Stage 1: Definition
The extent and seriousness of the “problem” or opportunity are
determined.
The first attempt at describing a solution is prepared. The intricacy of the
solution and the number of organizational units to be involved (size of
the buying center) is determined.
New task, modified rebuy, or straight rebuy is determined.
Consider a discussion of supplier involvement at this point. This is the
stage where most successful suppliers will get involved. If the task is a
Exhibit 3-3: Stages in the Process Flow Model of the Buying Decision Process
(PowerPoint 3.8)
Process Flow Stages
Buying Decision Process – Steps
Definition Stage (PowerPoint 3.9)
• Problem definition
• Solution definition
• Problem recognition
• General need description
• Product specification
• Determine next set of needs
Chapter 3: Organizational Buying & Buyer Behavior 6
The meaning of a Specification
Marketers should be weary of specifications unless their
PFM Stage 2: Selection
Discussion of RFQ/RFP practices may be appropriate. However, if there
has been a favorite supplier candidate through the process, the selection
may be a foregone conclusion−even if the customer is unwilling or
PFM Stage 3: Solution Delivery
This stage has significant supply chain implications.
This may be a good time to discuss many of the issues that led to the
demise of Covisint.
PFM Stage 4: End Game
This is not the end of the process, but the beginning of the next
opportunity for the supplier to serve the customer.
Chapter 3: Organizational Buying & Buyer Behavior 7
the mutual effort is now in continuous review.
• The supplier should use every opportunity to reinforce the validity of
the buying center decision. The relationships are ongoing, and
contribute to “being in the right place” for the next opportunity.
Learning Objective
Gain an initial sense of the concepts of trust and commitment in
effective relationship development.
An Examination of the Human Factors–the Variability of Rational Decisions
• Objective means may be used to narrow choices, but cultural,
Mutual Dependence and Customer Loyalty
• Value Image (PowerPoint 3.17)
A thorough discussion of value image may be appropriate, as the
concept is used throughout the book.
Value Image: the total of all impressions that a customer has of
Rationalization: The text describes two different outcomes to the same
business problem (buying new office computers) depending on personal
Chapter 3: Organizational Buying & Buyer Behavior 8
Key Terms
buying center
internal brand
modified rebuy
Answers to Questions for Review and Discussion
1. Contrast the consumer buying decision process with the organizational buying
process.
The consumer buying decision process generally satisfies the needs of the individual in his or
2. What is a buying center?
Not a place! A buying center in organizational purchasing is a collection of people with a stake
3. What organizations or departments are usually considered to be in a buying
center?
Short answer–any entity with a stake in the decision.
Chapter 3: Organizational Buying & Buyer Behavior 9
4. How does the buying center change for different types of purchases (straight
rebuy, modified rebuy, new task)?
Straight rebuys require a simpler ordering/delivery process typically from existing vendors while
5. Relate the value chain discussed in Chapter 2 with the buying center. How can
they be intertwined to provide value for the customer?
Different elements of the supplier value network contribute specific pieces of the offering.
These pieces are perceived by different members of the customer buying center as having
6. Discuss how an internal culture within a buying center could work against
rational, quantifiable decision making but results in satisfying decision
outcomes.
An internal culture (“cultural code”) sets the tone and rules of the interactions within the buying
7. Compare two or three internal cultures that you have read about (or
experienced) and their impact in consumer decision making and business
decision making.
Chapter 3: Organizational Buying & Buyer Behavior 10
Students may have several approaches to this question. “Cultural codes” in consumer decision
8. Why is it difficult to generalize the process of business buying behavior?
Buying situations differ in many ways, both small and large. The variation in the individuals
9. Relate the buying process model to organizational and individual needs. How do
they change throughout the process?
Throughout the buying decision process, the organization’s needs are for efficiency and
10. Under what type of purchase decision is an existing supplier at the greatest
risk–new task; modified rebuy; or routine purchase?
Existing/defending suppliers are at the greatest risk in a modified rebuy.
11. What types of purchases are likely to experience extensive activity occurring in
the following portions of the buying decision Process Model?
a. definition stage
b. selection stage
c. solution delivery stage
d. end game stage
a.
Definition: Generally, new task purchases−situations where available alternatives are not
12. What types of purchases and purchase decisions lend themselves to the
Internet or other Web-based decision strategies?
The Internet or other web-based strategies can be most effective in rebuying, analyzing
13. An influential member of the buying center has confided in a supplier’s
representative that she is anxious to “show her stuff” and move up in her
organization. Into what part of the individual needs description does the
statement seem to fit? When is such a request likely to occur?
A “request” in a buying organization from someone wanting to be a “hero” or “show her stuff”
represents a need based on an individual’s desire to be recognized within the buying center as
14. Your company has been a reliable and trusted supplier of somewhat generic,
frequently purchased hardware items. One of your largest regular customers
has announced that all purchases of hardware and supplies will be subject to
an online bidding service. Your company has a choice of either submitting to
the bidding system or lowering your current prices by 5 percent (thus avoiding
exposure to the online process). How would you respond?
Responding to a policy change instituted by a buying organization has a great many
Chapter 3: Organizational Buying & Buyer Behavior 12