Page 220 - Foundations of Marketing

Business Markets and Buying Behavior | Chapter 7 187

disruption caused by strikes, shortages, or bankruptcies. The
actual product is ordered in this fourth stage, and specific
details regarding terms, credit arrangements, delivery dates
and methods, and technical assistance are finalized.
During the fifth stage, the product’s performance is evalu-
ated by comparing it with specifications. Sometimes the
product meets the specifications but its performance fails to
adequately solve the problem or satisfy the need recognized
in the first stage. In that case, product specifications must be
adjusted. The supplier’s performance is also evaluated during
this stage. If supplier performance is inadequate, the business
purchaser seeks corrective action from the supplier or searches
for a new one. Results of the evaluation become useful feed-
back in future business purchase decisions.
The business buying decision process is used in its entirety
primarily for new-task purchases. Several stages, but not nec-
essarily all, are used for modified rebuy and straight rebuy
situations.

Influences on the Business

Buying Decision Process
Figure 7.2 also lists the four major factors that influence
business buying decisions: environmental, organizational,
interpersonal, and individual. Environmental factors include
competitive and economic factors, political forces, legal and Courtesy of Intuit, Inc.
regulatory forces, technological changes, and sociocultural
issues. These factors can generate considerable uncertainty for
an organization, including in buying decisions. Changes in one
Sole Sourcing
or more environmental forces, such as new government regu- This advertisement for Intuit points to the problem some firms have
lations or increased competition, can create opportunities and with implementing and maintaining a smooth and efficient payroll
threats that affect purchasing decisions. process. Businesses that outsource payroll processing are likely to
Organizational factors that influence the buying decision use just one vendor.
process include the company’s objectives, purchasing policies,
resources, and the size and composition of its buying center. An organization may also have
certain buying policies to which buying center participants must conform that limit buying
decisions. For instance, a firm’s policies may mandate contract lengths that are undesirable to
many sellers. An organization’s financial resources might require special credit arrangements,
also affecting purchase decisions.
Interpersonal factors are the relationships among people in the buying center. Trust is crucial
in collaborative partnerships. This is especially true when customized products are involved—the
buyer may not see the product until it is finished and must trust that the producer is creating it to
specifications. Trust and clear communication ensure that all parties are satisfied with the outcome;
however, interpersonal dynamics and varying communication abilities within the buying center
may complicate processes.
Individual factors are the personal characteristics of participants in the buying center, such
as age, education level, personality, and tenure and position in the organization. Consider a
55 -year-old manager who has been in the organization for 25 years. This manager is likely to
have a greater influence and power over buying center decisions than a 30 -year-old employed
at the firm only two years. The influence of various factors, such as age and tenure, on the
buying decision process depends on the buying situation, the type of product, and the type of
purchase (new-task, modified rebuy, or straight rebuy). Employee’s negotiating styles will
vary as well. To be effective, marketers must know customers well enough to be aware of these
individual factors and their potential effects on purchase decisions.

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