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Study questions

  1. What are the differences between organizational buying behaviour and consumer buying behaviour?

  2. Choose a recent purchase that included not only yourself but also other people in making the decision. What role(s) did you play in the buying centre? What roles did these other people play and how did they influence your choice?

  1. Review your decision to choose the educational establishment you are attending in terms of need recognition, information search, evaluation of alternatives and post- selection evaluation.

  2. Review the choice criteria influencing some recent purchases such as a hairstyle, a meal, etc.

  3. Why is relationship management important in many supplier - customer interactions? How can suppliers build up close relationships with organizational customers?

Key terms

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buying centre

a group which is involved in the buying decision; also known as a decision-making unit (DMU) in industrial buying situations

decision-making process

the stages that organizations and people pass through when purchasing a physical product or service

information search

the identification of alternative ways of problem solving

awareness set

the set of brands that the consumer is aware may provide a solution to a problem

evoked set

the set of brands that the consumer seriously evaluates before making a purchase

beliefs

descriptive thoughts that a person holds about something

attitude

the degree to which a customer or prospect likes or dislikes a brand

perception

the process by which people select, organize and interpret sensory stimulation into a meaningful picture of the world

selective attention

the process by which people screen out those stimuli that are neither meaningful to them nor consistent with their experiences and beliefs

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selective distortion

the distortion of information received by people according to their existing beliefs and attitudes

selective retention

the process by which people only retain a selection of messages in memory

information framing

the way in which infor­mation is presented to people

cognitive dissonance

post-purchase concerns of a consumer arising from uncertainty as to whether a decision to purchase was the correct one

information processing

the process by which a stimulus is received, interpreted, stored in memory and later retrieved

classical conditioning

the process of using an established relationship between a stimulus and a response to cause the learning of the same response to a different stimulus

operant conditioning

the use of rewards to generate reinforcement of response

cognitive learning

the learning of knowledge, and development of beliefs and attitudes without direct reinforcement

rote learning

the learning of two or more concepts without conditioning

vicarious learning

learning from others without direct experience or reward

reasoning

a more complex form of cognitive learning where conclusions are reached by connected thought

motivation

the process involving needs that set drives in motion to accomplish goals

choice criteria

the various attributes (and benefits) people use when evaluating products and services

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personality

the inner psychological character­istics of individuals that lead to consistent responses to their environment

lifestyle

the pattern of living as expressed in a person's activities, interests and opinions

culture

the traditions, taboos, values and basic attitudes of the whole society in which an individual lives

reference group

a group of people, which influences an individual's attitude or behaviour

new task

refers to the first-time purchase of a product or input by an organization

straight rebuy

refers to a purchase by an organization from a previously approved supplier of a previously purchased item

modified rebuy

where a regular requirement for the type of product exists and the buying alternatives are known but sufficient (e.g. a delivery problem has occurred) to require some alteration to the normal supply procedure

just-in-time (JIT)

the JIT concept aims to minimize stocks by organizing a supply system that provides materials and components as they are required

vertical electronic marketplaces

online procurement sites that are dedicated to sourcing supplies for producers in one particular industry

horizontal electronic marketplaces

online procurement sites that cross several industries and are typically used to source low-cost supplies such as MRO items

reverse marketing

the process whereby the buyer attempts to persuade the supplier to provide exactly what the organization wants

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relationship marketing

the process of creating, maintaining and enhancing strong relationships with customers and other stakeholders