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The Organisation as Consumers Part 5 in Text book Basic Framework Motivation Perception Search Evaluation Choice Learning Characteristics of Business Markets • Fewer but larger buyers • Demand often derived from consumer demand - e.g. car industry buys steel because consumers buy cars • Buying unit differs - more rational approach, more people involved • Buying process usually more formalised Marketing Mix - key differences • Greater degree of negotiation • Bid pricing may be involved • Greater emphasis on personal selling • Increasing use of e-commerce, extranets, • Distributors and agents may be involved Decision Making Unit (DMU) • User -end user, may initiate request and help specify • Influencer –technical personnel or specialists, help specify, provide information • Buyer -formal authority holders, help specify, select vendors, negotiate • Decider -final approver (often also buyer) • Gatekeeper –control information flow to others, can prevent sales people gaining access Types of Buying Decisions • Straight Rebuy • Modified Rebuy • New Task • Straight re-buy - goods re-ordered without modification • Modified re-buy - opportunity for competitors to enter discussions, essential service quality is good • New buy - greater risk or cost, the fuller decision making unit involved Steps in the Organisational Buying Decision Process • • • • • • Problem Recognition Information Search Alternate evaluation Purchase Decision Product Usage Ongoing Evaluation Problem Recognition • New Task? SR MR • Remember a problem is not necessarily bad… Information Search More Structured than consumer but still uses similar sources… Trade / Industry sources – directories, Magazines, exhibitions……. Supplier salesmen Alternative Evaluation • Specification Brief = exact requirements • Tender Process Purchase Decision • Supplier Credentials Quality Systems Reputation • Terms and Conditions • Quality / Reliability / Support No one got fired for buying an IBM (computer) Product Usage • On going performance • Actual Product • Delivery – Contractual obligations met… Factors influencing industrial buying behaviour ENVIRONMENTAL • Levels of demand • Economic prospects • Interest rates • The pace of technological change • Political and legal structures • Competitive structures Factors influencing industrial buying behaviour ORGANISATIONAL • Objectives • Policies • Structures • Systems & degree of centralisation • Processes and procedures • Managerial attitudes to risk • Financial resource • Previous experiences Factors influencing industrial buying behaviour BUYING CENTRE • Roles in DMU • Group processes • Interpersonal interactions Factors influencing industrial buying behaviour INDIVIDUAL • Personal objectives • Job position • Attitude to risk • Previous experiences • Technical knowledge • Motivation Firmographics • A way of profiling like consumer analysis – segmentation • SIZE, ACTIVITIES, OBJECTIVES, OWNERSHIP, SEVEN S’s Organisational segmentation • • • • • • • • • • • • Macro-segmentation ! size of organisation ! location ! industry sector ! end use Micro-segmentation ! DMU structure ! decision process ! buy class ! type of purchasing organisation ! innovation level ! purchasing strategy Organisational Culture • Mckinsey 7 S’s • From yesterday…. The 7S Framework •Staff •Strategy •Systems •Structure •Superordinate Goals / Shared Values •Style •Skills • • • • • • • • • • • • • Strategy is the key • What is a strategy? • Strategy is a coherent set of actions aimed at gaining a sustainable advantage over the competition.. • Integrated plan for development of marketing orientation SYSTEMS/STRUCTURE • Formalised definitions of markets and mission -SHARED VISION/STYLE • Detailed specification of marketing objectives • Commitment to implementation SKILLS/STAFFING Shared values • The ideas of what is right and desirable - the mores of the organisation / individuals • Typified by catch phrases / sound bites – – – – – “We will become a fully customer driven organisation Customers come first Marketing expenditures are an investment Service is paramount” ?? Style • The way that management behaves... • Top management support - visible commitment to customer related activities • Open communications between all functional groups and marketing staff • Recognition/reward of customer /market oriented behaviour Structure • Clearly defined responsibilities and reporting lines • Key accounts - recognising important customers • Decentralised marketing staff to provide close and fast support to customers • Staff rotation of non-marketing staff through customer contact positions Systems • • • • • • Procedures and processes Information - flow Customer intelligence Competitor intelligence Marketing planning and control systems Providing information to customer facing staff • Process easy for both customers and staff. Skills/Staffing • People in the organisational rather than personal context • Recruitment of people with requisite skills / ability to acquire • Provision of adequate number of customer service staff • Marketing training -programmes and market • Analytical skills in segmentation China Southern • Buying new aircraft. • What is the buying decision process? HAUT • New IT System • What would be important in the buying decision? Mars Confectionery • New packaging for new product? • What would be important in the buying decision Zara • New supplier for garments • What would be important in the selection process? Appointment of a new Advertising Agency. • Decision • Importance • Needs of the firm.. Basic Framework Motivation Perception Search Evaluation Choice Learning
