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Business to Business - Buying Behavior

Buying and Selling Centers

Bachelorarbeit 2012 56 Seiten

BWL - Offline-Marketing und Online-Marketing


I Table of Contents

I Table of Contents

II List of Figures

III List of Abbreviations

1 Introduction

2 Change of Buying and Selling Behavior

3 Basic Terms of Buying and Selling in B2B Markets
3.1 Buying and Selling Centers
3.2 The Nature of Buying Situations

4 Buying Behavior
4.1 The Members of the Buying Center
4.2 The Buying Decision Process
4.3 Determinants of Buying Behavior
4.3.1 External Influences on Buying Behavior
4.3.2 Internal Influences on Buying Behavior The Organizational Environment Interpersonal Influences on Buying Behavior The Individual’s Influence on the Buying Center
4.4 Practical Example: Interview with a Purchasing Agent
4.4.1 The Members of the Buying Center
4.4.2 The Buying Decision Process
4.4.3 Internal and External Influences on Buying Behavior
4.5 Critical Reflection and Implication for Research

5 Selling Behavior
5.1 The Members of the Selling Center
5.1.1 The Special Role of the Salesman and his Performance
5.2 The Selling Decision Process
I Table of Contents ii
5.3 Practical Example: Interview with a Selling Agent
5.3.1 The Members of the Selling Center
5.3.2 The Selling Decision Process
5.3.3 Internal and External Influences on Selling Behavior
5.4 Critical Reflection and Implication for Research

6 The Buyer-Seller-Interface

7 Conclusion

IV List of References

II List of Figures

Figure 1: The stages of the buying decision process

Figure 2: The buyer’s power and the technical complexity of the product

Figure 3: Adaptive selling

Figure 4: The selling process

Figure 5: The relationship of buying and selling centers

III List of Abbreviations

B2B Business to business

E.g. Exempli gratia

1 Introduction

Selling and buying behavior in business to business (B2B) markets has rapidly changed over the past decades as markets become more competitive, technology evolves fast and customer expectations have changed. This revolutionizes the way companies coordinate and organize their work to fulfill the newly formed buying and selling tasks. Thus, the focus changed from the buyer or seller to being the sole individual responsible for handling business relationships. Nowadays, everybody in a company who can provide an input to the selling and buying process is actively involved as the boundaries of different horizontal and vertical levels are fading which used to determine the scope of responsibility in the past. Therefore, the general terms of ‘Buying Center’ and ‘Selling Center’ have become important as they define the people being involved in a purchase in the buying and selling company.

The aim of this dissertation is to provide an overview of the significant determinants of a buying and a selling center, the roles the individuals play in a purchase and the influences on buying and selling behavior on different levels. Additionally, the buying and selling process and the collaboration of the respective centers in the process are being considered. This thesis is divided into seven chapters. The first chapter focuses on the major changes of selling and buying in the past decades. It considers the reasons for the changes, the company’s organization, the customers’ changed requirements and the way selling companies adapt to that. Chapter three provides the general definitions of B2B markets, the goods being purchased and the terms of buying and selling centers. In addition, the major characteristics that determine a buying situation are being described. In the subsequent chapters, buying and selling behavior is being analyzed separately. Hence, chapter four outlines the roles in a buying center and analyzes who is likely to occupy these roles. After that, a model of the buying decision process is established to illustrate who is involved at which stage. External and internal influences of buying behavior on the environmental, interpersonal and individual level are distinguished. With the purpose of surveying the preliminarily established assumptions of buying behavior, an interview with a buyer is conducted. The findings of this interview are analyzed in respective of the established theory. At the end of the fourth chapter, the findings are summarized and implications for further research are provided. The fifth chapter elaborates the selling side of a purchase. Implications from the fourth chapter are included as the roles of the selling center and the seller’s decision process are depicted. Subsequently, analogue to the previous chapter, theory is revised on the base of an interview with a selling agent who can provide insight of the selling process, the individuals being involved and his role in the selling center. In the sixth chapter the two sides of a purchase and their members are considered jointly.

Concluding, the key findings are outlined, implications for the management are evolved and recommendations for potential future research are made.

2 Change of Buying and Selling Behavior

In order to analyze buying and selling behavior today, it is consequential to look at the changes over the past decades regarding the organization of a company, the buyer’s expectations and how the seller tries to fulfill the new desires of their customers.

The reasons for the changed buying and selling behavior are multifaceted including the globalization of markets, the development of new technologies, the quick diffusion of information, the invention and proliferation of the internet, the grown mobility of workforce as well as the ease of communication (Churchill et al. 2011: 1). Due to global competition it became possible to produce goods more efficient at lower costs for the customer. Advances in telecommunication, transportation and information processing provide more variety of choice for customers and sellers. This is the case, because of the fact that the barrier of geographic distance almost does not exist anymore (Webster 1992: 4). Moreover, today’s business markets are paced fast and competition becomes more intense (Rackham & DeVincentis 1999: 2). Generally, products have shorter life cycles, are more complex and there is a greater amount of different products available to the customer (Rackham & DeVincentis 1999: ix). All in all, changing markets and rapid development of new technology results in quick establishment of new competitors in the market and lead to the fact that no company can be certain of their market position anymore (Bossidy 2002: xv). As a reaction to the changes of business markets, the structure and organization of companies changed towards more flexible organization forms (Webster 1992: 4). Nowadays, one of the managers’ challenges is to create companies with a more horizontal than vertical hierarchy to create a “corporation without boundaries” (Hirschhorn & Gilmore 1992: 104). There used to be clear role allocations stating the roles of managers and their employees in a company (Hirschhorn & Gilmore 1992: 105). Traditional boundaries such as those between the marketing and sales department do not exist as definite as they used to (Rackham & DeVincentis 1999: ix). The purpose of this changed organization is to respond quickly to the fast-paced market changes regarding technology and customer preferences (Webster 1992: 5).

Besides the changes in the organizational context customers’ expectancies as well as the way selling firms respond to it, have changed. Customers have changed regarding to what they expect and demand from a purchase as well as from a sales relationship (Rackham & DeVincentis 1999: 3). This includes a change in purchasing patterns. Customers favor value over technology, partnership over control and customer needs are more important than the vendor’s product (Blustain 1992: 67). Costumers today expect overall and tailored solutions to their problems instead of standardized products (Achrol 1997: 56). The procurement process of the product became as important as the product itself, with customers setting value on the vendor’s interaction approach and his service (Rackham & DeVincentis 1999: xxv). As a result of these changing ways of buying, not only the purchasing agent is responsible for a successful purchase but several people in the company. In the past decades, research started focusing on the entire buying process and their participants, instead of just focusing on the buyer (Mattson 1988: 205).

In addition to the changes regarding buying behavior, there has been a major change in the sales approach. For the seller today the question of how to add more value for the customer has become the major and crucial point in selling (Rackham & DeVincentis 1999: 7). Selling companies have to focus on how to satisfy the customers ’ needs rather than asking "who wants to buy what I’ve got?” (Blustain 1992: 68). The salesperson is challenged with providing all the information the customer needs and coordinating the sources of his own company to become the vendor of preference (Churchill et al. 2011: 1). His success depends on the ability to organize these sources effectively and to cope with different buying and selling influences and boundaries within the company successfully (Cespedes, Doyle & Freedman 1989: 45). Moreover, the sales role changed from product developers to relationship managers in which the salesperson has to coordinate both sides of the buyer- seller interface (Churchill et al. 2011: 1). The focus of the selling division is now to develop and improve the customer relationship (Webster 1992: 1) placing emphasis on the customer lifetime value and perpetuating customers of strategic importance (Jones et al. 2005: 181). Altogether, the selling company today is challenged with many new tasks. These include the creation of a customer-driven culture, the implementation of formal sales processes, the recruitment and selection of the right sales talents and the integration of other business functions with sales (Churchill et al. 2011: 2-3). In terms of what will be discussed in the next chapters, the major crossover from individualism to teamwork is important (Parker 1994: 3). Managers need to place more emphasis on the team approach (Buchholz, Roth & Hess 1987: xi) to bring together the needed skills from R&D, marketing, production and others to have the most effective results (Doyle 1995: 33). Hence, the departments of a company cooperate with each other more (Hirschhorn & Gilmore 1992: 105) and are less autonomous (Ashkenas et al. 2002: xvii). Therefore, the roles of buyers and sellers have changed as they yield tasks e.g. of technical support or product expertise to other people in the company (Churchill et al. 2011: 1).

Looking at these changes as a whole, selling and buying have become processes of high complexity. Different factors have to be understood, which the following chapters of this thesis give an overview and analysis to.

3 Basic Terms of Buying and Selling in B2B Markets

Before looking at buying and selling behavior and its determinants more closely, it is necessary to define the general terms. B2B marketing can be generally described as "[the] marketing activities of any kind of organization, public or private, which has exchange relationships with other organizations” (Turnbull & Leek 2003: 143). Products and services exchanged between organizations can be classified into two categories: direct and indirect goods. Direct goods are those which enter the final product, such as raw materials, manufactured product components and other product essentials. Indirect products are not part of the end-product such as machinery and operating supplies (Hill & Hillier 1977: 17-18).

3.1 Buying and Selling Centers

The parties involved in B2B purchasing are referred to as buying and selling centers. Generally speaking, they compose of the individuals involved in a purchase on the buying as well as the selling side. Therefore, the buying center can be defined as “consisting of those individuals who interact for the specific purpose of accomplishing the buying task” (Webster & Wind 1972: 35). Furthermore, a distinction can be made between core and extended buying and selling teams. The core buying center is a small number of people which are permanently responsible for the relationships with suppliers, buying strategies and buying transactions with regard to accomplishing the buying task. Depending on the specific purchasing task and its information requirements the core buying team might be extended. People from other departments who can provide necessary expertise are added to the buying center. Hence, the buying center is no formal and fixed group, but an informal concept whose specific formation depends on the purchasing situation. Analogue to the core buying center the core selling center can be defined as the people being constantly in charge of customer relationships, sales strategy and sales transactions with the purpose of achieving the set selling goals. To satisfy customer needs and their information requirements, people from different divisions are added to the team depending on the specific transaction (Deeter-Schmelz & Ramsey 1995: 49).

With the purpose of avoiding any ambiguity, in the next chapters the terms buying and selling centers refer to the extended teams.

3.2 The Nature of Buying Situations

Buying situations can be diverse as they depend on multisided factors. They determine the formation of buying and selling centers and the complexion of the decision process. Before looking at the specific roles in buying and selling centers the determinants of the buying situation need to be described. For the characterization of the buying situation there are several factors that need to be considered, three of them being: the novelty of the buying situation, customer or rather supplier importance and the technical complexity of the product.

The novelty of the buying situation can be classified into three buy classes which determine the firm’s experience with the product as well as the information requirements. These three distinct buying situations are: new task, modified rebuy as well as straight rebuy (Robinson, Faris & Wind 1967: 23). The new task buy involves extensive problem solving in terms of high information requirements, high task uncertainty as well as poorly defined decision rules. This situation primarily occurs when either a new product or product line is implemented or a company enters a new market segment (Hutt, Johnston & Ronchetto 1985: 36). The modified rebuy situation is characterized by limited problem solving. The company already has prior experience with the product (Turnbull & Leek 2003: 149) and therefore has a base of information to draw upon (Hutt, Johnston & Ronchetto 1984: 36). Although due to some degree of novelty, additional information needs to be collected. A modified rebuy situation may appear if specifications of a certain product change or the company switches to a different supplier (Turnbull & Leek 2003: 149). In the straight rebuy situation the same product is purchased, from the same supplier, in the same quantity. Hence, the problem solving is highly routinized and the information search will be mainly standardized (Hutt, Johnston & Ronchetto 1984: 37). The customer or supplier importance depends on whether a short-term or a long-term relationship is to be attained. The dollar volume and the strategic importance of the business partner determine the customer’s and supplier’s relevance (Mattson 1988: 209).

The following chapters elaborate how the nature of the buying situation defines the individual’s responsibility. It is a function of the person’s product- and customer-specific knowledge, the technical complexity of the product and the importance of the buying situation to the firm either regarding the dollar value or the relationship with the customer (Webster 1965: 372).

4 Buying Behavior

This chapter describes and analyzes the important determinants of buying behavior. The roles in the buying center are identified, the buying decision process is depicted and influences on different levels are analyzed. Subsequent, a practical example is illustrated to revise the outlined aspects.

4.1 The Members of the Buying Center

Although some major buying roles are persisting over all buying situations, the membership of a buying center is fluid and not fix (Mattson 1988: 205). Who is involved depends on the specific buying situation, the buy phase, the purchase types and categories (Johnston & Bonoma 1981: 143). Sometimes the buying agent may be the sole member depending on product and decision stage (Mattson 1988: 210). With the purpose of creating a general model for explaining buying behavior six general roles of the buying center can be identified: the initiator, the user, the influencer, the gatekeeper, the buyer and the decider. One individual can occupy more than a single role (Webster & Wind 1972: 36) depending on the buying situation and the information needed.

The first role that can be identified in a buying center is the initiator. This person first detects a problem or need, which may demand for purchasing a product or service that will meet the specific requirements of the problem. Hence, the buying process is initiated. This role can be maintained by different people in the company, whether it is the product user who detects an inefficiency concerning the product or the top management that desires to improve the production process. The second identified member of the buying center is the person who works with and utilizes the product or service, the user. He usually has a great influence on the decision making process because he is the person that knows the product best (Churchill et al. 2011: 52). The user is primarily concerned with the product performance as well as the product’s ease of use and successful operation (Rolfes 2007: 70; Turnbull & Leek 2003: 146). He can influence the buying decision in two ways: On the one hand, the user has an information power because he has the expertise regarding the product and its utilization (Rolfes 2007: 81). By recognizing the need of equipment or the need for improvement of a certain product or its components, he identifies certain product standards (Webster & Wind 1972: 78). On the other hand, the user has some power of influencing the decision process by refusing to work with the present materials and equipment (Webster & Wind 1972: 78). He could also not tap the full potential of the given products and equipment and therefore diminish the production output or the product quality (Rolfes 2007: 80). The third role identified to determine the composition of a buying center is the one of the influencer. The role of the influencer is occupied by everybody in the company that influences the buying decision, within or outside the company, directly or indirectly (Turnbull & Leek 2003: 146). The influencer usually does not have formal buying authority (Webster & Wind 1972: 35), but influences the buying decision through providing information regarding the evaluation of potential suppliers and their products (Churchill et al. 2011: 52). Thus, the influencers often have a major impact on the determination of specifications and criteria which are crucial in making the purchase decision (Churchill et al. 2011: 52). This might be somebody from the marketing department, from development or design engineering, manufacturing, research and development, general management or the purchasing agent himself (Robinson, Faris & Wind 1967: 135). The fourth role in the conceptual buying center is maintained by the gatekeeper. He manipulates the flow of information to other members of the buying center (Churchill et al. 2011: 52). There are two types of gatekeeping: First, the gatekeeper could influence the flow of information by screening. This could be a secretary who may not put certain phone calls through to the purchasing agent or executive (Churchill et al. 2011: 52) or a buyer who allows or forbids a salesman to call up people from the engineering department (Webster & Wind 1972: 79). Secondly, a gatekeeper could constrain the flow of information by filtering. In that case, he only lets certain information get through to the other members of the buying center. This could be the buyer who allocates different buying alternatives and then passes not all of the information along to the other individuals involved in the purchase (Churchill et al. 2011: 52). Therefore, the gatekeeper has a significant impact on the determination of how other members of the buying center assess certain products or potential suppliers (Turnbull & Leek 2003: 146). A major role of the buying center is occupied by the buyer. He is the person that is in contact with the selling organizations and negotiates the purchase (Churchill et al. 2011: 53)). He has formal authority for choosing the supplier, setting up the purchase conditions (Webster & Wind 1972: 78) and ordering the product or service (Turnbull & Leek 2003: 145). The power of the purchasing agent depends on the nature of the buying situation and is constraint by either more powerful people in the organization or by technical experts who set up the specifications (Webster & Wind 1972: 79). The last role defined as having a share in the buying process is the role of the decider. He has the final authority in the purchasing decision process (Churchill et al. 2011: 53). This role might be occupied by the buyer or by a higher executive in the organization (Churchill et al. 2011: 53), even though the true decider might be somebody else. For example an engineer, who determines the specifications in a way that only one supplier can be considered, might be the true decider in the buying organization (Webster & Wind 1972: 79).

4.2 The Buying Decision Process

To understand buying behavior it is necessary to pay attention to the process that leads to a final purchase. Generally, buying in B2B markets provides a sequence of activities with varying complexity. Therefore, buying can be defined as a dynamic "decisioning” process which involves different departments and hierarchical levels within the company (Robinson, Faris & Wind 1967: 12). How the individual buying decision process looks like and who is involved on which stage depends on the organization, its structure, as well as the buying situation and the product or service itself. To create an overview of what a general decision process looks like, seven different stages are defined, as depicted in figure 1.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: The stages of the buying decision process (Churchill et al. 2011: 55; Robinson, Faris & Wind 1967: 14)

The first stage of the buying process is the identification of a need or problem (Robinson, Faris & Wind 1967: 13). A purchasing company’s anticipation of a need may be the consequence of derived demand which indicates that the buying company’s need for purchasing is established by their costumer’s demand for the products or services they sell (Churchill et al. 2011: 54). The need recognition can either be automatically (Churchill et al.

2011: 55) through shelf inventory running low (Robinson, Faris & Wind 1967: 13) or it may be identified when somebody either inside or outside the organization discovers a better way of operating (Churchill et al. 2011: 55). The latter would for example be a potential supplier suggesting the purchase of a product or service (Robinson, Faris & Wind 1967: 13) or the head quarter of a company deciding to produce a new product line and therefore new materials and machines are needed (Churchill et al. 2011: 55). Hence, on the first stage the need or problem is identified and the company wants to find a solution to the problem by purchasing a certain good or service (Robinson, Faris & Wind 1967: 15). Therefore the buying process is initiated, which can be done by a variety of people including the users, engineers, the buyer and top managers (Churchill et al. 2011: 15).

The second stage of the defined decision making process is the determination of objectives and specifications. At this stage the decision makers must determine how the identified problem is to be solved (Robinson, Faris & Wind 1967: 15). Criteria and specifications must be defined concerning the quantity and type of the good or service to be purchased (Churchill et al. 2011: 56). These criteria depend on the characteristics of the buying company, the specific buying situation as well as the influences on the buying process (Robinson, Faris & Wind 1967: 16). The criteria must be defined technically exact, and because of possible excessive inventories or downtime, the quantity must be carefully considered (Churchill et al. 2011: 56). Therefore, users, technical experts and the buyer should be involved at this stage (Churchill et al. 2011: 56). For technically complex products the using department plays a major role at this stage of the decision process. In contrast to that, if the product’s complexity is low, the purchase of simple standardized products available in the market can solve the problem (Robinson, Faris & Wind 1967: 15).

The third stage of the decision process is the identification of alternatives, which includes the search for and qualification of potential suppliers (Churchill et al. 2011: 56). If the product or service to be purchased has a low complexity or if it is a straight rebuy situation the buyer might just pick a preferred supplier from a reference list. On the contrary, if the product or service is complex or it is a new-task buy the buying company might consider many different sources to make sure they select the best alternative available (Churchill et al. 2011: 56). The search for potential suppliers includes different information sources such as catalogues, trade journal advertising, company personnel, vendors’ salesman and industrial trade shows (Webster 1965: 373). Some of the factors taken into consideration when choosing potential suppliers might be: previous performance, quality of the products and the degree of technological innovation as well as conformity of the supplier’s products to standardization (Hill & Hillier 1977: 108).



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Christian-Albrechts-Universität Kiel
business buying behavior selling centers



Titel: Business to Business - Buying Behavior