Page 219 - Foundations of Marketing

186 Part 3 | Customer Behavior and E-Marketing

Figure 7.2 Business (Organizational) Buying Decision Process and Factors That May Influence It

Possible influences on the decision process
Environmental Organizational Interpersonal Individual
• Competitive factors • Objectives • Cooperation • Age
• Economic factors • Purchasing policies • Conflict • Education level
• Political forces • Resources • Power relationships • Personality
• Legal and • Buying center • Tenure
regulatory forces structure • Position in
• Technological changes organization
• Sociocultural issues

Business (organizational) buying decision process

Develop Search for Select Evaluate
product and evaluate product
Recognize specifications possible and supplier product and
problem supplier
to solve products and and order performance
problem suppliers product

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or deletion, in order to acquire the product in the most cost-effective way. Some vendors
may be deemed unacceptable because they are not large enough to supply needed quanti-
ties. Others may be excluded because of poor delivery and service records. Sometimes the
product is not available from any vendor and the buyer will work with an innovative sup-
plier to design and produce it. Buyers evaluate products to make sure they meet or exceed
product specifications developed in the second stage of the business buying decision pro-
cess. Usually suppliers are judged according to multiple criteria. A number of firms employ
vendor analysis , a formal, systematic evaluation of current and potential vendors, focusing
on such characteristics as price, product quality, delivery service, product availability, and
overall reliability.
The results of deliberations and assessments in the third stage are used during the fourth
stage of the process to select the product to be purchased and the supplier. In some cases,
the buyer selects and uses several suppliers, a process known as multiple sourcing . Firms
with federal government contracts are generally required to have several sources for an item
to ensure a steady supply. At times, only one supplier is selected, a situation called sole
sourcing . For organizations that outsource their payroll services, many of these companies
will use just one provider. The Intuit ad focuses on a problem that many firms have with
vendor analysis A formal, implementing and maintaining a smooth payroll process. The chewed pencil underscores what
systematic evaluation of current a headache payroll can be for many firms. The businesses that recognize that they have this
and potential vendors problem are encouraged to purchase Intuit’s payroll products to make the process easier and
multiple sourcing smoother because they cover all business payroll needs.
An organization’s decision to Sole sourcing has historically been discouraged except in the cases where a product is only
use several suppliers available from one company. While still not common, more organizations now choose sole
sole sourcing An organiza- sourcing, partly because the arrangement means better communications between buyer and
tion’s decision to use only one supplier, stability and higher profits for suppliers, and often lower prices for buyers. However,
supplier multiple sourcing remains preferable for most firms because it lessens the possibility of

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