Business-to-Business Marketing:

Relationships, Networks & Strategies

Nick Ellis

Chapter Two
Organizational Buying Behaviour
 Learning Objectives

• Recognize some key characteristics of

organizational markets and customers
• Compare and contrast consumer and
organizational buyer behaviour (OBB)
• Appreciate the many influences on industrial
purchasing decisions
• Understand processes of organizational
decision making
Fig 2.1 – Types of organizational
customer

Commercial Institutional Governmental

• Distributors • Government- • Health

• OEMs related • Education
• User (hospitals, • Military
universities)
organizations • Transportation
• Retailers • NFP
• Civil service
organizations
(charities,
churches)

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Fig 2.2 - B2C and B2B marketing as seen by IMP and CCT researchers
Source: Adapted with permission from Cova and Salle (2008, p8)

Criteria IMP view of B2C IMP view of B2B CCT view of B2C

Time perspective Transaction:

Relation:
Sales/purchases as isolated
Episodes with ongoing
events
buyer/supplier relationships
Relation:
Lived experiences within a
brand/consumer relationship

Active: Active:
Passive:
Role of customer Active customer in Customizing customer using
Active supplier & passive
interaction with elements of supplier’s
consumer
active supplier offering

Concentrated: Concentrated:
Atomised:
A few independent and Several consumers
Many independent
Market structure interconnected gathered into tribes or
suppliers & consumers
suppliers & customers communities

Dyadic and embedded: Embedded:

One sided:
Interaction between The consumer in their
Either the consumer
customer & supplier inside experiential, social & cultural
or the supplier
network of connected actors context
Unit of analysis

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Fig 2.3 – Broad differences between B2C and B2B buying
behaviours

Behaviours & Consumer Organizational

characteristics
Commercial buying
Institutional buying
Governmental

• Distributors • Government- • Health

Number of buyers Normally large Normally small
• OEMs related • Education
• User
Size of orders (universities,
Small • Large
Military
hospitals)
organizations
Value of orders Normally low • Transportation
Normally high
• Retailers • NFP (charities,
• Civil service
Evaluating criteria churches)
Social, ego & utility Price, value & utility

Purchase initiation Normally self Normally others

Level of risk Low to medium Medium to high

Complexity of decision Low to medium Medium to high

Information search Normally short Normally long

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Fig 2.4 – Influences on organizational purchasing
decisions

External Internal Individual Relational

• Socio • Nature of • Perception of • Relational
economic firm’s business consequences approaches to
changes • Structure of • Extent of inter-firm
• Globalisation purchasing personal relationships
of business • Purchasing influence • Transactional
• Customer policy • Social approaches to
power • Purchasing relationships inter-firm
• Market ethics relationships
stagnation • Systems
• Process • Technology
mentality

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Fig 2.5 – Potential members of the buying
centre/DMU

Buyers
Initiators
(Purchasers)

Decision
Influencers
makers

Users Gatekeepers

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 Fig 2.6 - Typical organizational buying classifications
Source: Adapted with permission from Enis (1980)

Straight rebuy Modified rebuy New task

Bridges,
Some utilities Consulting dams
(electricity, services
water, gas)
New Custom-built
trucks offices
Complete
Pure negotiation
routine

Bulk Electrical Installations

chemicals components (machinery)

Office PC Weapon
supplies terminals systems

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Fig 2.7 – Potential stages in the organizational buying process

1. Problem recognition

2. General need description

3. Specification

4. Supplier search

5. Proposals submission

6. Supplier selection

7. Order process specification

8. Performance review

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 Fig 2.8 – Single vs. multiple sourcing
Source: Adapted with permission from Wilson (1999, p50)

Multiple sourcing advantages Single sourcing advantages

Avoids supplier dependence

One relationship to manage
Bargaining leverage
Greater commitment
(to maintain low prices)
Clearer responsibilities
Insurance against disrupted
supply
More leverage over supplier
Not limited to capacity of
Simplified monitoring
single supplier
Easier supplier training
Access to more supplier data
Cheaper tooling costs
Stimulus to competition
Simplified scheduling
Greater prompt to innovation

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