Question

What insights are needed about organizational buying behavior?

Answer 1

Organizational buying behavior is the decision making process wherein the organizations identify the need to purchase products and services. In the process, the organization needs to identify, evaluate and choose among the different brands. Organizational buying behavior is highly influenced by the demand of the customers or the market.

Three buying situations-

Organizations undergo three types of buying situations, namely-

1. New Task- The first time the buyer buys the product or service. More number of executives are involved in the process. The stages that the supplier of the products go through are awareness, interest, evaluation, selection and trial and final adoption.
2. Modified rebuy- The modification to the specifications of the product or specifications to delivery falls under this situation. The organization seeks new vendors or demands products from existing suppliers based on the modifications.
3. Straight rebuy- Only the purchasing department is involved in t his situation. The purchasing department gets orders from the inventory control department to reorder the items. They also seek quotations from suppliers in a specific approved list.

Factors influencing organizational buying behavior-

Environmental factors- that will have an effect are demand changes, shortage of items, technological changes in the product, etc.

Internal factors- Changes such as centralized purchasing vs decentralized purchasing, changes in purchase practices such as long-term vs short-term; relationship purchasing, vendor selection methods, vendor performance evaluation, etc have an impact on the organizational buying behavior.

Interpersonal factors- Changes in relationship between buyers and sales representatives of competitors affect the decision making process.

Individual factors- What factors are appreciated by the business and what are the things that are considered as not a good practice to business.

Organizational buying decision process-

The buying decision process involves 8 steps

1. Problem recognition
2. Product specification
3. Supplier search
4. Solicitation for proposals
5. Selection of suppliers
6. Final order routine to suppliers
7. Review of supplier’s performance
8. Corrective action if required.

Conclusion- Thus, a marketer needs to be aware of all these changes for selling to an organization. The organizational buying behavior greatly depends on the above factors and it is crucial that the organization is aware of the changing market trends to be effective in their buying behavior.