MODELS OF ORGANISATIONAL BUYING

BEHAVIOUR

Presented By:
Abhijith Tom, RNo:01
Athul Sekhar A, RNo:14
Gopika Krishnan, RNo:20
Preeti Pushpan, RNo:37
 INTRODUCTION TO ORGANIZATIONAL BUYING

• Organizational buying means the activity of buying goods or services by

organizations.
• An organization may be any industry, which buys raw materials necessary for
production of finished goods, machines, machine parts, other supplies etc.
• Similarly government organizations such as ministry, departments, divisions
etc. buy goods or services for their use.
•  Wholesalers, retailers, distributors , resellers etc. buy goods or services to
produce finished goods, resale, ultimate use etc.,
 CHARACTERISTICS OF ORGANISATIONAL BUYING

 Derived Demand
 Geographical Concentration
 Few buyers and large Volume

 More Direct channel of Distribution

 Rational buying
 Professional buying
 Complexity
 MODELS OF BUYING BEHAVIOUR

• Webster and Wind model

• Sheth model of Industrial buying behaviour

• Buy grid model

 WEBSTER AND WIND MODEL

• In the early 1970s, Industrial marketing professors Frederick.E. Webster and

Yoram Wind proposed this model.
• They saw industrial buying not as single events, but as organizational
decision-making processes where multiple individuals decide on a purchase.
• They introduced the concept of buying centre which makes purchase
decisions as an informal group.
REPRESENTATION OF THE MODEL
 Sheth model of Organizational Buying

 In 1973, Professor Jagdish N Sheth developed the Sheth model of

Organizational Buying.

  highlights the decision-making by two or more individuals jointly, and the

 psychological aspects of the decision-making individuals in the
industrial buying behavior. 

 It includes three components and situational factors, which determine the

choice of a supplier or a brand in the buying decision making process in an
organization.
 SHETH MODEL INCLUDES

I. Components
 Component 1
 Component 2
 Component 3

II. Situational Factors

 Component 1 Component 2 Component 3
Situational
factors

Variables that Methods used for

Differences among
determine conflict resolution in
individual buyers
autonomous or joint joint decision making
caused by factors:
buying decision: process :
1. Background of Supplier
(A)Product specific 1. Problem solving
individuals Or
factors: 2. Persuasion
2. Active search
1.Time pressure 3. Bargaining Brand choice
3. Perpectual
2.Perceived risk 4. Politicking
distortion
3.Type of purchase
4. Satisfaction with (B) Company
past purchase
specific factors:
1.Company size
2.Company
orientation
3.Degree of
centralisation
 Component 1
 The differences among the individual buyers expectations are caused by the certain factors.

 These factors include:

Background of individuals
 Information sources
 Active search
 Perceptual distortion
 Satisfaction with past purchases.
 Component 2
 determine whether the buying decisions are autonomous or joint.
 
 There are six variables and these variables can be classified as:

Product specific factors

• Time pressure
• Perceived risk
• Type of purchase

Company specific factors

• Company size
• Company orientation
• Degree of centralisation
 Component 3

 The methods used for conflict resolution in joint-decision making process

are indicated by the Component (3) in the model. 

 It includes :
Problem solving
Persuasion
Bargaining
Politicking
 II. Situational factors

 Situation factors can be varied like

Economic conditions
Labour disputes
Machine breakdowns
 Mergers and acquisitions.
SHETH MODEL OF CONSUMER BEHAVIOUR
 BUY GRID MODEL

• In 1967, the Canadian, American and Israeli marketing

researchers, Robinson, Faris and Wind, introduced the buygrid.
• Their framework consists of a matrix of buyclasses and
buyphases.
 1.NEW TASKS

• Seeks variety of information to the solutions of organisational

problem.
• The greater the cost or perceived risks related to the
purchase, the greater the need for information and the larger
the number of participants in the buying centre.
 2 . MODIFIED REBUY

• The buyer wants to replace a product the organisation

uses.
• The decision making may involve plans to modify the
product specifications, prices, terms or suppliers
• when managers of the company believe that such a
change will enhance quality or reduce cost.
• In such circumstances, the buying centre proved to
require fewer participants and allow for a quicker decision
process than in a new task buyclass.
 
 3. STRAIGHT REBUY

• The buyer routinely reorders a product with no modifications.

• The buyer retains the supplier as long as the level of
satisfaction with the delivery, quality and price is maintained.
• New suppliers are considered only when these conditions
change.
• The challenge for the new supplier is to offer better conditions
or draw the buyer's attention to greater benefits than in the
current offering.
REPRESENTATION OF THE MODEL