Chapter 4 – Business Buying Behaviour
- Explain what a buying center is.
- Explain who the members of buying centers are and describe their roles.
- Explain the how organizational culture affects the business buying process.
- Describe how the buying situation affects the business buying process.
Similar to the consumer buying process, there are three categories of actors that affect the business buying process. They include 1. the buying centre, 2. the organizational culture and 3. the buying situation. Let’s look at each of these areas in some detail.
The Buying Centre
The professors who form a committee at your school to choose textbooks are acting like a buying centre. Buying centres are groups of people within organizations who make purchasing decisions. Large organizations often have permanent departments that consist of the people who, in a sense, shop for a living. They are professional buyers, in other words. Their titles vary. In some companies, they are simply referred to as buyers. In other companies, they are referred to as purchasing agents, purchasing managers, or procurement officers. Retailers often refer to their buyers as merchandisers. Figure 4.5 “The Buying Centre” shows the most common types of players that make up the buying centre.
Buyers can have a large impact on the expenses, sales, and profits of a company. Pier 1’s purchasing agents literally comb the entire world looking for products the company’s customers want most. What happens if the products the purchasing agents pick don’t sell? Pier 1’s sales fall, and people may lose their jobs. This doesn’t happen in B2C markets. If you pick out the wrong comforter for your bed, you don’t lose your job. Your bedroom just looks crummy.
Consequently, professional buyers are shrewd. They have to be because their jobs depend on it. Their jobs depend on their choosing the best products at the best prices from the best vendors. Professional buyers are also well informed, and less likely to buy a product on a whim than consumers.
Increasingly, purchasing managers have become responsible for buying not only products but also functions their firms want to outsource. The functions aren’t limited to manufacturing. They also include product innovation and design services, customer service and order fulfillment services, and information technology and networking services to name a few. Purchasing agents responsible for finding offshore providers of goods and services often take trips abroad to inspect the facilities of the providers and get a better sense of their capabilities.
Purchasing agents don’t make all the buying decisions in their companies, though. As we explained, other people in the organization often have a say, as well they should. Purchasing agents frequently need the feedback and help of other players to buy the best products and choose the best vendors. The people who provide their firms’ purchasing agents with input generally fall into one or more of the following groups:
Initiators are the people within the organization who first see the need for the product. But they don’t stop there; whether they have the ability to make the final decision of what to buy or not, they get the ball rolling. Sometimes they initiate the purchase by simply notifying purchasing agents of what is needed; other times they have to lobby executives to consider making a change.
Users are the people and groups within the organization that actually use the product. Frequently, one or more users serve as an initiator in an effort to improve what they produce or how they produce it, and they certainly have the responsibility of implementing what is purchased. Users often have certain specifications in mind for products and how they want them to perform. An example of a user might be a professor at your school who wants to adopt an electronic book and integrate it into their online course.
Influencers are people who may or may not use the product, but have experience or expertise that can help improve the buying decision. For example, an engineer may prefer a certain vendor’s product platform, and try to persuade others that it is the best choice.
If you want to sell a product to a large company like Walmart, you can’t just walk in the door of its corporate headquarters and demand to see a purchasing agent. You will first have to get past of a number of gatekeepers, or people who will decide if and when you get access to members of the buying centre. These are people such as buying assistants, personal assistants, and other individuals who have some say about which sellers are able to get their foot in the door.
Gatekeepers often need to be courted as hard as prospective buyers do. They generally have a lot of information about what is going on behind the scenes and a certain amount of informal power. If they like you, you are in a good position as a seller. If they don’t, your job is going to be much harder. In the case of textbook sales, the gatekeepers are often departmental assistants. They know in advance which instructors will be teaching which courses and the types of books they will need. It is not uncommon for departmental assistants to screen the calls of textbook sales representatives.
The decider is the person who makes the final purchasing decision. The decider might or might not be the purchasing manager. Purchasing managers are generally solely responsible for making decisions on routine purchases and small purchases. However, the decision to purchase a large, expensive product that will have a major impact on a company is likely to be made by, or with the help of, other people in the organization, perhaps even the CEO. The decision may be made by a single decider, or there may be a few who reach consensus. Further, deciders may take into account the input of all of the other participants: the users, influencers, and so forth. Sellers, of course, pay special attention to what deciders want. “Who makes the buying decision?” is a key question B2B sales and marketing personnel are trained to find out about their potential customers.
Types of B2B Buying Situations
The stages an organization goes through, and the number of people involved, often depend on the buying situation. Figure 4.6 “Buying Situations” illustrates the different types of buying situations. Is this the first time the firm has purchased the product or the fiftieth? If it’s the fiftieth time, the buyer is likely to skip the search and other phases and simply make a purchase. A straight rebuy is a situation in which a purchaser buys the same product in the same quantity from the same vendor. In other words, nothing about their order changes. Postpurchase evaluations are often skipped, unless the buyer notices an unexpected change in the offering such as deterioration of its quality or delivery time.
Sellers like straight rebuys because the buyer doesn’t consider any alternative products or search for new suppliers. The result is a steady, reliable stream of revenue for the seller. Consequently, the seller doesn’t have to spend a lot of time on the account and can concentrate on capturing other business opportunities. Nonetheless, the seller cannot ignore the account. The seller still has to provide the buyer with a top-notch, reliable service or the straight-rebuy situation could be jeopardized.
If an account is especially large and important, the seller might go so far as to station personnel at the customer’s place of business ensure that the customer is happy and the straight-rebuy situation continues. IBM and the management consulting firm Accenture station employees all around the world at their customers’ offices and facilities.
By contrast, a new-buy situation occurs when a firm purchases a product for the first time. Generally speaking, all the buying stages we described in the last section occur. New buys are the most time consuming for both the purchasing firm and the selling firms. If the product is complex, many vendors and products will be considered, and many RFPs will be solicited.
New-to-an-organization buying situation is a rare occurrence. What is more likely is that a purchase is new to the people involved. For example, a school district owns buildings. But when a new high school needs to be built, there may not be anyone in management who has experience building a new school. That purchase situation is a new buy for those involved.
A modified rebuy occurs when a company wants to buy the same type of product it has in the past, but make some modifications to it. Maybe the buyer wants a different quantity, packaging, or delivery, or to customize the product slightly differently. For example, a manufacturer of leather handbags may have purchased rawhide leather in the past. They decide to make new handbags in a different colour or with a different texture. While they have purchased rawhide leather before, they now want to purchase it in a different colour or texture.
A modified rebuy doesn’t necessarily have to be made with the same seller, however. Your instructor may have taught this course before, using a different publisher’s book. High textbook costs, lack of customization, and other factors may have led to dissatisfaction. In this case, they might visit with some other textbook suppliers and see what these suppliers have to offer. Some buyers routinely solicit bids from other sellers when they want to modify their purchases in order to get sellers to compete for their business. Likewise, savvy sellers look for ways to turn straight rebuys into modified buys so that they can increase their business. They do so by regularly visiting their customers and seeing if these customers have unmet needs or problems that a modified buy might solve.
The buying situation—whether new-buy, modified rebuy, or straight rebuy—will determine the steps that tend to be taken in the decision process. Figure 4.7 “Buying Situations and Business Buying Decisions” shows which steps may or may not be completed in the buying decision process based on the buying situation.
The Buying Culture
The last category of factors that affect the buying decision process is the buying culture. Figure 4.8 “Organizational Buying Cultures” shows the different organizational buying cultures that affect business buying decisions.
Autocratic culture is one in which the buying centre has multiple participants but in the end only one person makes the decisions, typically the decider. In a consultative culture, the buying centre has one person who makes the decision, however, the decider consults with the rest of the buying centre members before making the decision. Unlike the autocratic or consultative buying culture, in a democratic buying culture, there isn’t a single decision-maker. A democratic culture involves a group decision, where the majority of the members of the buying centre decide. While a consensus culture also involves a group decision, instead of a majority of the buying centre deciding, all members must agree with the decision. Given the different styles, it is important for business to business marketers to understand these different types of buying cultures and the various type of decision-making styles in order to ensure they are influence the appropriate decision-maker(s) (Edge-Leadership Consulting, 2009). ‡
The Interpersonal and Personal Dynamics of B2B Marketing
We made it a point earlier in our discussion to explain how rational and calculating business buyers are. But would it surprise you to learn that sometimes the dynamics that surround B2B marketing don’t lead to the best purchasing decisions? This is because interpersonal factors among the people making the buying decision often have an impact on the products chosen, good or bad. (You can think of this phenomenon as “office politics.”) For example, one person in a buying unit might wield a lot of power and greatly influence the purchasing decision. However, other people in the unit might resent the power this person wields and insist on a different offering, even if doesn’t best meet the organization’s needs. Savvy B2B marketers are aware of these dynamics and try their best to influence the outcome.
Personal factors also play a part in the decision process. B2B buyers are overwhelmed with choices, features, benefits, information, data, and metrics. They often have to interview dozens of potential vendors, and ask them hundreds of questions. No matter how disciplined the buyers are in their procedures, they will often find a way to simplify their decision making either consciously or subconsciously (Miller, 2007). For example, a buyer deciding upon multiple vendors who rank similarly in their evaluation might decide simply to choose the vendor whose sales representative they like the most.
Factors such as these can be difficult for a company to control. However, branding—how successful a company is at marketing its brands—is a factor under the company’s control, says Kevin Randall of Movéo Integrated Branding, an Illinois-based marketing-consulting firm. Sellers can use their brands to their advantage to help business buyers come to the conclusion that their products are the best choice. IBM, for example, has long had a strong brand name when it comes to business products. The company’s reputation was so solid that for years, the catchphrase “Nobody ever got fired for buying IBM” was often repeated among purchasing agents—and of course, by the IBM salespeople! (Miller, 2007)
In short, B2B marketing is very strategic. Selling firms try to gather as much information about their customers as they can, and use that information to their advantage. Thinking strategically, you might try to find out everything you could about the person and then try to arrange a meeting. That way when you did meet the person, you would be better able to strike up a conversation and develop a relationship with them. B2B selling is similarly strategic. Little is left to chance.