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publishing as Prentice Hall 1

 Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post Purchase Behavior

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 The buying center—a collection of individuals with
a stake in the buying decision

 Members of the buying center determine, within

their own professional responsibilities, the
organization’s needs & methods the organization
uses to satisfy them

 Buying center complexity changes depending on the

complexity of need

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 External Factors Inde
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ne e stan pende
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om ing sett rd
st Internal Factors ing s-
Cu buy org
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and avior atio
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beh Technology Accounting
Management Marketing
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ove ies Finance Service Pub
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age

Stakeholders in each discipline within the buying organization contribute

expertise such that internal and external factors are accommodated.

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 Involves more Buyers - more decision makers or
contributors to portions of the decisions

 Stakeholders in Buying Center are driven by the

specific needs of their professional responsibilities

 Different types of decisions occur simultaneously

within the Buying Center

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1. Problem recognition NOTE: This is not a sequential
process, but a “list” of activities
2. General need description that can provide opportunities for
interaction with customers
3. Product Specification

4. Supplier/Source search

5. Proposal solicitation

6. Selection

7. Make the transaction routine

8. Evaluate performance

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LB1: Understand how individuals within organizations develop and satisfy the
requirements of their professional responsibilities as dictated by their
organizations and, within that framework, their own individual needs.

 Interaction is fluid and broad based

 Process is simultaneous, not sequential
 The “Track-Record” determines if supplier
is included in evoked set
 Relationships build loyalty

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 Organization Needs
o Benefits of the product or service
 Individual Needs
o Based on the individual’s role in the
Buying Center and the expected
professional activities/functions of the job
 Individual’s Personal Needs
o Career, quality of life, recognition

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LB2:See how the supplier/customer relationship is the principal
defining factor in the success of business-to-business marketing
efforts.

 Relationships, not price are the most significant

factors in business-to-business decision making

 While price is important, past experience with a

supplier & the extent of recognition of common
goals contribute to the selection & subsequent
success of the supplier decision
 

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NOTE: The traditional, or stepwise model of the decision process can be misleading in that it
defines activities as discrete steps & overlooks the value of relationships. The PFM attempts to
demonstrate the interaction & fluidity of what really happens in organizational buying decisions.

Process Flow Stages Buying Decision Process - Steps

Definition Stage  Problem recognition
•Problem definition
•Solution definition
 General need description
•Product specification  Product specification
Selection Stage  Supplier/Source Search
•Solution provider search  Proposal Solicitation
•Acquire solution provider(s)
 Contract for supplier(s)
Deliver Selection Stage
•Customize as needed
•Install/test/train
Make the transaction routine
End Game Stage
•Operate solution  Evaluate performance
•Reach end result
•Evaluate outcomes  Resell the job
•Determine next set of needs
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 The extent and seriousness of the “problem” or opportunity are
determined

 The first attempt at describing a solution

 The intricacy of the solution and the number of organizational units

to be involved (size of the buying center) is determined

 Successful suppliers are involved, often in the development of the

Product Specification

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 Selection may have occurred in the Definition Stage

 If a new buy, members of the buying center may have a

“favorite” supplier

 A modified or straight re-buy will likely include the existing

suppliers

 It may be appropriate at this point to emphasize that the

most appropriate total offering, rather than the lowest
price, usually wins (esp. in private sector )

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 Development activities customize the solution to
the specific technical needs (in addition to other
needs) of the customer – the Total Offering

 Meet the customer’s “way of buying” process –

integration of supply logistics with consumption
logistics

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 Reinforce customer decisions made in the
selection process

 Not the end of the process, but the beginning of

the next opportunity for the supplier to serve the
customer

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 Straight Re-Buy
› Buying situation that is routine
› Established solutions

 Modified Re-Buy
› Limit exposure from competitive forces

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 A need not yet faced by Organization
 New offering with new technology
 Requires many sources of information
and assistance
 Utilizes complete buying process to
investigate alternatives

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 Yes. Then next
New Task purchase

Definition No. Then next Re-Buy

purchase
Definition
Selection
Selection
Is the buyer
satisfied?
Solution Solution
Delivery Delivery

End Game
End Game

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Straight Re-Buy Modified Re-Buy

Definition
Definition Define changes
to process
Selection Satisfied, Selection
No differences
Dissatisfied
Solution
Small Solution
Delivery
Difference Delivery
yes no
End Game
Is the buyer How different is End Game
satisfied? the next situation?

Large To New
Difference Task

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