Copyright The McGraw-Hill Companies,

Inc. Permission required for

reproduction or display

SELLING BUSINESS TO BUSINESS SUCCESSFULLY.

UNDERSTANDING WHAT MAKES BUYERS BUY

THE THEORIES OF BUYER MOTIVATION

Organizational Buyer Behavior
• REWARD-MEASUREMENT THEORY
— THINK: BENEFITS
• BEHAVIOR CHOICE THEORY
— THINK: SITUATION
• ROLE THEORY
— THINK: NORMS / EXPECTATIONS

B2BM_04_SG ( S. Goswami) Slide No. 1 B2BM_04_SG ( S. Goswami) Slide No. 2

BEHAVIOR CHOICE MODEL

REWARD-MEASUREMENT THEORY
1.Identify Situation
Degree of Co. vs Self Orientation
Motivation
= 2 Evaluate Personal Relevance
(Intrinsic & Extrinsic
Rewards) Formal/ informal & social/ intrinsic reward systems

Valence Probability 3 Assess action alternatives and

requirements
(importance)
X
4 Choose Behavior Strategy
Defensive: process oriented, minimize threats
Self-Efficacy
Offensive: results-oriented, maximize gain

B2BM_04_SG ( S. Goswami) Slide No. 3 B2BM_04_SG ( S. Goswami) Slide No. 4

Copyright The McGraw-Hill Companies,
Inc. Permission required for
reproduction or display

ROLE THEORY BUYING CENTER ROLES

BUYING CENTER (DMU) vs. autonomous
PERSON ROLE

Roles:


SECRETARY Initiator-reports that fax keeps breaking down

Initiator
Controller-sets budget for purchase of new fax

VICE PRESIDENT

Influencer
Gatekeeper-gathers review from vendors.

OFFICE MANAGER
Influencers-view demonstrations narrow choices

Gatekeeper

SECRETARY & OFFICE MANAGER
Recommender-recommends a particular product to

Controller
decision maker

Decision Maker
OFFICE MANAGER
Decision Maker – Selects fax to purchase

Purchasing Agent
VICE PRESIDENT OF

OPERATIONS

B2BM_04_SG ( S. Goswami) Slide No. 5 B2BM_04_SG ( S. Goswami) Slide No. 6

TIME FRAGMENTATION INFLUENCES SELLER’S MARKETING EFFORTS

DIMENSIONS OF BUYING CENTERS

TIME DIMENSIONS INVOLVEMENT INFLUENCE
 TIME IS HIGHLY FRAGMENTED: Many participants for short time participation
 TIME IS NOT FRAGMENTED: Same people stay through entire process NUMBER OF DECISION MAKERS

VERTICAL DIMENSIONS HIGHLY MANY FEW MINIMALLY

FRAGMENTED A LITTLE A LOT FRAGMENTED
 How many layers of management are involved in decision-making
TIME SPENT ON DECISION STAGES

HORIZONTAL DIMENSIONS
 How many departments are involved in decision-making
DECISION CYCLE TIME INFLUENCE

SIZE OF BUYING CENTER

FORMALIZATION DIMENSION
 Purchasing tasks and roles are guided and enforced by written procedures and LONGER LARGE SMALL SHORTER
policies DECISION CYCLE A LITTLE A LOT DECISION CYCLE

EXPERIENCE OF DECISION MAKERS

Sales objective is to move to the right on the continuum

B2BM_04_SG ( S. Goswami) Slide No. 7 B2BM_04_SG ( S. Goswami) Slide No. 8

Copyright The McGraw-Hill Companies,
Inc. Permission required for
reproduction or display

OVERCOMING RISK
RECOGNIZING THE BUYER’S DILEMMA: RISK
THERE ARE THREE KINDS OF RISK TO OVERCOME
THREE OPTIONS BUYERS USE TO REDUCE RISK

FINANCIAL RISK • GATHER MORE INFORMATION FROM MORE

 POTENTIAL FOR LOST REVENUE WITH
SOURCES
FAULTY PRODUCT
• USING LOYALTY TO PRESENT SUPPLIERS—BUILD

PERFORMANCE RISK TRUST
 PRODUCT WON’T PERFORM AS INTENDED

• SPREAD THE RISK BY USING MORE DECISION

SOCIAL RISK
MAKERS OR GETTING MORE SUPPLIERS
 THE PURCHASE WILL NOT MEET APPROVAL OF A REFERENCE
GROUP

B2BM_04_SG ( S. Goswami) Slide No. 9 B2BM_04_SG ( S. Goswami) Slide No. 10

USING INFORMATION TO REDUCE RISK BUYING DETERMINANTS THEORY

Personal selling Sales literature

Trade shows Advertising Environmental factors

Commercial
Telemarketing Websites
Market factors
E-mail Direct mail
Organizational
Word of mouth from
factors
Noncommercial colleagues, consultants, Trade publications Individual
and co-workers
factors*

Personal Impersonal
* Risk; Selective Processes: exposure/ attention/ perception/ retention
B2BM_04_SG ( S. Goswami) Slide No. 11 B2BM_04_SG ( S. Goswami) Slide No. 12
Copyright The McGraw-Hill Companies,
Inc. Permission required for
reproduction or display

EXPANDED BUYING DETERMINANTS THEORY

Environmental factors
Market factors
Organizational Factors
Extrinsic reward systems Policies supporting
Role expectations vertical and
Corporate culture and horizontal
intrinsic rewards dimensions
Cross-functional
purchasing teams
Individual factors
Experience: new buy straight rebuy
Choice of reward-Role orientation
Valence of reward
Probability perceptions

B2BM_04_SG ( S. Goswami) Slide No. 13