Module 7 Organizational Buying Behaviour By: Dr Shahinaz Abdellatif Objectives of the Session To distinguish between consumer versus organisational markets and their buying behaviour To understand organisational markets and their buying behaviour Differences Between Organizational and Consumer Markets Demand characteristics The demand for industrial goods and services is 1. Derived from the demand for consumer goods and services. 2. Relatively inelastic—price changes in the short run are not likely to affect demand drastically. 3. More erratic because small increases or decreases in consumer demand can, over time, strongly affect the demand for manufacturing plants and equipment. 4. More cyclical. Differences Between Organizational and Consumer Markets Market demographics Organizational buyers, when compared with buyers of consumer goods, are: 1. Few in number 2. Larger 3. Geographically concentrated Differences Between Organizational and Consumer Markets Buyer-seller relationships Organizational markets are characterized by: 1. Use of professional buying specialists following prescribed procedures 2. Closer buyer—seller relationships (RM) 3. Presence of multiple buying influences 4. More apt to buy on specifications Organizational Centre For routine purchases a single buyer or purchasing manager may make the purchase decision. For most high-value organisational purchases, several people from different departments participate in the decision process. The individuals in this group, called a buying centre, share knowledge and information relevant to the purchase of a particular product. Different members of the buying centre may participate and exert different amounts of influence – at different stages in the decision process. Participants in the Organisational Purchasing Process 1. 2. 3. Users: The people in the organisation who must use or work with the product or service often have some influence on the purchase decision. Infl