Buying Behavior in
Business-to-Business Marketing
Organizational Buying Behavior
It includes all activities of organizational members as they define a
buying situation and identify, evaluate, and choose among
alternative brands and suppliers.
Source: Webster and Wind (1972)
Major Stages of Organizational Buying Process
1. Problem Recognition
2. General Description of Need
3. Product Specifications
4. Supplier Search
5. Acquisition and Analysis of Proposal
6. Supplier Selection
7. Selection of Order Routine
8. Performance Review
Source: Hutt, Sharma, and Speh, 11e.
3
Buying Center
It includes all members of the organization who are involved in the buying process
Initiator Those who initiate the buying process
Those who control/prevent information and
Gatekeeper
individuals
Those who evaluate different options keeping in view
Influencers
technical specifications
Irrespective of their formal authority on buying,
Deciders
they take the final call
Buyers Those who have formal authorities to buy
Users Those who use the product in question
Source: Hutt, Sharma, and Speh, 11e. 4
Buying Situation
❑ New Task
❑ Totally different/new problem than previous experiences
❑ Judgmental New Task
❑ Strategic New Task
❑ Straight Rebuy
❑ Recurring or a continuing requirement
❑ Modified Rebuy
❑ Reevaluating alternatives
❑ Simple Modified Rebuy
❑ Complex Modified Rebuy
Source: Hutt, Sharma, and Speh, 11e.
5
New Task
• Judgemental new task
• Technically complex product
• Difficult evaluation of alternative vendors
• Uncertainty about product or service
• It is suitable? Are we paying appropriate price?
• Strategic new task
• Purchasing decisions of extreme importance to firm strategically and
financially
• Decision based on long-range planning
• Abbott dropped INR 33000 Crore to purchase drug making arm of Solvay
Source: Hutt, Sharma, and Speh, 11e.
Factors Affecting Industrial Buying Behavior
❑ Environmental Factors
❑ Organizational Factors
❑ Group Factors
❑ Individuals’ Behavioural Factors
Source: Hutt, Sharma, and Speh, 11e.
7
Factors Affecting Industrial Buying Behavior
❑ Environmental Factors:
▪ Economic environment
▪ Companies that operate on global scale
▪ Industry-wise impact may differ
▪ Physical environment
▪ Climate
▪ Geography
▪ Political environment
▪ Legal environment
▪ Cultural environment
▪ Technological environment
Source: Hutt, Sharma, and Speh, 11e.
Source: Corey (1989) 8
Factors Affecting Industrial Buying Behavior
❑ Environmental Factors:
▪ Technological environment
▪ Digitalization/e-commerce
▪ Post pandemic scenario (McKinsey, 2020)
▪ B2B companies have shifted from traditional to digital, heavy reliance on video and
online chat
▪ Preference of video call over phone with different stakeholders
Source: Hutt, Sharma, and Speh, 11e.
9
Source: Corey (1989)
Factors Affecting Industrial Buying Behavior
❑ Organizational Factors:
▪ Various departments that are part of a purchasing process
▪ Different responsibilities, requirements, and strategy of departments
▪ Organizational purchasing (Centralized or Decentralized)
▪ When centralized? – Standard requirement, Cost saving, Less customer
involvement, Nature of industry (oligopolistic)
▪ Organizational buying process (pricing)
▪ Buying situation
▪ New task, Straight rebuy, Modified rebuy
▪ Preserving multiple sources of supply
▪ Proximity
Source: Hutt, Sharma, and Speh, 11e.
Source: Corey (1989) 10
Factors Affecting Industrial Buying Behavior
Group Factors:
▪ Who is more influential?
▪ New task/complex modified task versus straight rebuy
▪ Buying center members and their role
▪ Interaction among the buying center members
▪ Clues to identify the most powerful buying center:
▪ High personal stake, information flow, experts -- probing questions,
link with top management
▪ Group dynamics
▪ Support mechanism from other groups (technical – purchase)
▪ Relative influence of each group member
Source: Hutt, Sharma, and Speh, 11e.
11
Source: Corey (1989)
Factors Affecting Industrial Buying Behavior
❑ Individuals’ Behavioural Factors:
Task and Non-Task Motives
▪ First rationality (Task) then personal choice (Non-Task)
▪ Non-task motives are of two types:
Achievement motives
o Personal advancement
o Recognition
Risk-reduction motives
o Uncertainty avoidance
Source: Hutt, Sharma, and Speh, 11e.
Source: Corey (1989) 12
Total Cost of Ownership
“TCO considers the full range of costs associated with the purchase
and use of a product or service over its complete life cycle” (p.45).
❑ Acquisition Costs
❑ Selling price, transportation costs, admin costs
❑ Possession Costs
❑ Financing, Insurance, Taxes, Inspection, Storage
❑ Usage Costs
❑ Installation, Employee Training, Labour, Repair, Replacement, Disposal
Source: Hutt, Sharma, and Speh, 11e.
13