What are the types of organizational buying decision?
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You can read the details below. By accepting, you agree to the updated privacy policy. Thank you! View updated privacy policy We've encountered a problem, please try again. The business buying decision process involves five distinct stages. At each stage, different decision makers may be involved, depending on the cost and strategic importance of the purchase. To navigate the buying decision process successfully, you need to provide the right type of information and ensure that your sales representatives are contacting the right decision makers. You can also strengthen your position by offering customers advice and guidance at each stage – a process known as consultative selling. TipThe five stages of the business buying-decision process are awareness, specification, requests for proposals, evaluation and, finally, placing the order. Awareness and RecognitionThe process begins when a company identifies a need for a purchase. It may want to replace an existing item, replenish stocks or buy a new product that is just available on the market. You can also stimulate a need that the company may not be aware of by advising them of issues and challenges that other companies in their industry face. The buying team next works with the requesting department to firm up on the requirement. Your sales team can provide advice and guidance at this stage by offering discussion papers or inviting decision makers to workshops or seminars on the topic. Specification and ResearchWhen the buying team has agreed requirements, it prepares a detailed specification that sets out quantities, performance and technical requirements for a product. Your sales team can support this stage by advising the buying team on best practice or collaborating with the buying team to develop the specification. Buying teams then use the specification to search for potential suppliers. They may search the internet to find products or companies that provide a match to their specification, so it is important that your website features keywords that match your customers’ product or service needs. Request for ProposalsWhen the buying team has identified potential suppliers, it asks for detailed proposals from the suppliers. The team may issue a formal document known as a request for proposal, or it may outline requirements and invite potential suppliers to make a presentation or submit a quotation. If the product or service has a precise specification, the buying team may simply ask for price quotations. If the product is more complex, it may ask for proposals on how a supplier would meet the need. Evaluation of ProposalsThe buying team evaluates suppliers’ proposals against criteria such as price, performance and value for money. As well as evaluating the product, they assess the supplier on factors such as corporate reputation, financial stability, technical reputation and reliability. You can influence decisions at this stage by providing company information, case studies and independent reports that review your company and products. Order and Review ProcessBefore the buying team places an order with the chosen supplier, they negotiate price, discount, finance arrangements and payment terms, as well as confirming delivery dates and any other contractual matters. When the order is complete and delivered, the buying team may add a further stage by reviewing the performance of the product and the supplier. This stage may include imposition of penalty charges if the product fails to meet the agreed specification. To read the full version of this content please select one of the options below:
Dubravka Sinčić Ćorić (Department of Marketing, Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia) Ivan-Damir Anić (Department for Innovation, Business Economics and Business Sectors, Institute of Economics, Zagreb, Croatia) Sunčana Piri Rajh (Department of Marketing, Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia) Edo Rajh (Department for Innovation, Business Economics and Business Sectors, Institute of Economics, Zagreb, Croatia) Nataša Kurnoga (Department of Statistics, Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia) This paper aims to explore buying decision factors and approaches of companies operating in manufacturing industry in Croatia. Design/methodology/approachThe data collected by company survey were analysed using exploratory and confirmatory factor analyses, cluster analysis and cross-tabulation analysis. FindingsResults show that manufacturers are influenced by six distinctive factors when making purchasing decisions. These are supplier’s flexibility, supplier’s reliability, interdepartmental communication, top management support, routine purchases and buyer’s price sensitivity. Manufacturers can be classified in four different groups according to their buying decision-making patterns. Practical implicationsThis paper provides a set of factors and approaches which might help selling companies and sales representatives understand the purchasing practices of buying company better, and develop adaptive selling approaches accordingly. Originality/valueBased on a literature review and field research, an instrument of organizational buying behaviour was developed and tested in the Croatian manufacturing industry. The factors of organizational buying behaviour patterns were identified, and the typology of buying decision approaches applicable for manufacturing industry was developed. Keywords
CitationSinčić Ćorić, D., Anić, I.-D., Piri Rajh, S., Rajh, E. and Kurnoga, N. (2017), "Organizational buying decision approaches in manufacturing industry: developing measures and typology", Journal of Business & Industrial Marketing, Vol. 32 No. 2, pp. 227-237. https://doi.org/10.1108/JBIM-10-2014-0214 Publisher:Emerald Publishing Limited Copyright © 2017, Emerald Publishing Limited Related articlesWhat is Organisational buying decision?Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.
What are the different types of buying decisions?Common types of buying behaviors include:. Habitual. When customers practice habitual buying, they typically put little thought or research into their purchases. ... . Complex. ... . Dissonance-reducing. ... . Variety seeking. ... . Limited decision-making. ... . Impulsive. ... . Spendthrift. ... . Average spending.. What are the 3 types of organizational buying decisions?There are mainly three types of organizational buying behavior or decision, they are:. Straight Repurchase Decision. ... . Modified Purchase Decision. ... . New Purchase Decision. ... . Recognizing a Need or a Problem. ... . Determining the Product & Buying Specification. ... . Listing and Identifying the Suppliers.. What are the four types of organizational buyers?There are four basic categories of business buyers: producers, resellers, governments, and institutions. Producers are companies that purchase goods and services that they transform into other products.
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