A General Model for Understanding Organizational Buying Behavior - Research findings and theoretical discussion about consumer behavior often have little relevance for the industrial marketer - Buyer behavior model can help marketer to analyze available information about the market to identify the need for additional information - It can help to specify targets for marketing effort, the kind of information needed by various purchasing decision makers, and the criteria that they will use to make these decisions
- The literature of economics, purchasing, and to a limited degree, marketing has emphasized “rational,” economic factors - In these economic views, the objective of purchasing is to obtain the minimum price or the lowest total cost-in-use - Other traditional views of organizational buying err in the opposite direction, emphasizing variables such as emotion, personal goals and the internal politics that are involved in the buying decision process but not related to the goals of the buying task - This “nontask” emphasis is seen in models which emphasize the purchasing agent’s interest in obtaining personal favors, in enhancing his own ego, or in reducing perceived risk.
An Overview of a General Model
- The four classes of variables determining organizational buying behavior are individual, social, organization and environmental. - Within each class, there are two board categories of variable, take and nontask - The distinction between task and nontask variables applies to all of the classes of variables, and subclasses o Eg. Motives will inevitably have both dimensions – those relating directly to the buying problem to be solved and those primarily concerned with personal goals o These motives overlap in many important respects and need not conflict - Organizational buying behavior is a complex process and involves many persons, multiple goals and potentially conflicting decision criteria - Organizational buying behavior is a form of problem-solving, and a buying situation is create when someone in the organization perceives a problem - Organizational buying behavior includes all activities of organizational members as they define a buying situation and identify, evaluate, and choose among alternative brands and suppliers - The entire of organization is embedded in a set of environmental influences including economic, technological, physical, political, legal and cultural forces
- These influences are exerted through a variety of institutions including business firms (suppliers, competitors and customers), governments, trade unions, political parties, educational and medical institutions, trade associations, and professional groups - Environmental Influences have their impact in 4 distinct ways 1. Availability of goods and services
2. The general business conditions facing the buying organization including the rate of economic growth, the level of national income, interest rates, and unemployment 3. The values and norms guiding interorganizational and interpersonal relationships between buyers and sellers as well as among competitors and between buying organizations and other institutions 4. The information flow into the buying organization (most important is flow of marketing communications) - This kind of analysis is important in entering new markets - Environmental factors are important determinants of organizational buying behavior, but they can be so basic and pervasive that it is easy, and dangerous, to overlook them in analyzing the market
- According to Leavitt’s scheme, organization are multivariate systems composed of 4 sets of interacting variables 1. Task- the work to be performed in accomplishing the objects of the organization 2. Structure- subsystems of communication, authority, status, rewards and...
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