The paper "Factors Influencing an Organizational Buying Centre Strategic Decision-Making" is an outstanding example of a marketing case study. The major characteristic of organization buying is the fact that it is a group activity. People from different departments of the organization and with different expertise contribute to the purchasing decision. Group of people with a stake in the buying decision are referred to as a buying center. The creation of a relationship with the buying center defines the collaboration success between corporate customers and marketers in general. This paper discusses the environmental and organizational factors that influence the strategic decision-making process of a buying center as a group in a business organization.
The paper will review the buying process of the group as a buying center in a business organization and discuss factors that affect this process. Organizational Decision-making unit/buying center Whereas the business to customer (B2C) buying process can be fairly complex over the purchase of goods such as a family car, business to business (B2B) organizational buying processes involve more people as compared to B2C purchases, in what is referred to as decision-making unit or ‘ buying center’ (Giglierano & Vitale, 2002).
Main members of this group include managers who are not directly linked in the use of the materials or goods purchased, but who possess a financial or a strategic perspective of the organization as a whole. More often than not, there are a large number of individuals involved in a business purchase decision, with the purchasing department involved performing a role that is less significant than one can look forward to (Anderson & Narus, 2004). There are different parties involved in the purchasing decision within an organization and could include initiators, buyers, influencers, decision-makers, users, and gatekeepers.
This group of people makes up the buying center that the business organization uses in case of a purchase decision. The composition of the group buying center will be discussed in the following paragraphs. Initiators are individuals who make the first request for the purchase of a service or a product. They are people who start the process of buying decisions. The initiator is normally assumed by one of the members of the buying center or Decision Making Unit (DMU).
Buyers are the actual people who have the formal authority of ordering the service or products from the suppliers. They are found in the specialist purchasing department in the customer organization. Depending on the attitude of the firm towards purchasing their role can range from merely administrative to senior management where major purchases are involved. Influences are known to affect the decision-making process through the provision of information and may be criteria for examining alternatives (Bill & O'Toole, 2002). They can either be external or internal to the organization.
This could be an engineer having specialist information with regard to competitive offers or an IT consultant who give advice on purchasing major computer systems. Decision-makers are the people with the authority in the organization to approve purchases. It can be senior managers in complex purchases but in a routine situation, the buyer can be the decision-maker. Since some of the decisions are not formalized it may be often difficult for B2B markets to identify such members of the decision-making unit or buying center in the organization.
Users are the particular individuals who consume the product or the service that has been purchased. The user offers feedback with regard to the performance of the product. After-sale support is provided by the selling firm where technical knowledge in installing and use of the product is usually needed (Webster & Wind, 1972). Gatekeepers have the mandate of controlling the flow of information to other managers in the organization. Industrial marketers try to build rapport with gatekeepers such as users and buyers so as to access the firm premise in a bid to sell their products.
Within the business organization, there are several types of buying.
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