MODELS OF ORGANISATIONAL BUYING
BEHAVIOUR
Presented By:
Abhijith Tom, RNo:01
Athul Sekhar A, RNo:14
Gopika Krishnan, RNo:20
Preeti Pushpan, RNo:37
INTRODUCTION TO ORGANIZATIONAL BUYING
• Organizational buying means the activity of buying goods or services by
organizations.
• An organization may be any industry, which buys raw materials necessary for
production of finished goods, machines, machine parts, other supplies etc.
• Similarly government organizations such as ministry, departments, divisions
etc. buy goods or services for their use.
• Wholesalers, retailers, distributors , resellers etc. buy goods or services to
produce finished goods, resale, ultimate use etc.,
CHARACTERISTICS OF ORGANISATIONAL BUYING
Derived Demand
Geographical Concentration
Few buyers and large Volume
More Direct channel of Distribution
Rational buying
Professional buying
Complexity
MODELS OF BUYING BEHAVIOUR
• Webster and Wind model
• Sheth model of Industrial buying behaviour
• Buy grid model
WEBSTER AND WIND MODEL
• In the early 1970s, Industrial marketing professors Frederick.E. Webster and
Yoram Wind proposed this model.
• They saw industrial buying not as single events, but as organizational
decision-making processes where multiple individuals decide on a purchase.
• They introduced the concept of buying centre which makes purchase
decisions as an informal group.
REPRESENTATION OF THE MODEL
Sheth model of Organizational Buying
In 1973, Professor Jagdish N Sheth developed the Sheth model of
Organizational Buying.
highlights the decision-making by two or more individuals jointly, and
the psychological aspects of the decision-making individuals in the
industrial buying behavior.
It includes three components and situational factors, which determine the
choice of a supplier or a brand in the buying decision making process in an
organization.
SHETH MODEL INCLUDES
I. Components
Component 1
Component 2
Component 3
II. Situational Factors
Component 1 Component 2 Component 3 Situational
factors
Variables that Methods used for
Differences among
determine conflict resolution in
individual buyers
autonomous or joint joint decision making
caused by factors:
buying decision: process :
1. Background of Supplier
(A)Product specific 1. Problem solving
individuals Or
factors: 2. Persuasion
2. Active search
[Link] pressure 3. Bargaining Brand choice
3. Perpectual
[Link] risk 4. Politicking
distortion
[Link] of purchase
4. Satisfaction with
(B) Company
past purchase
specific factors:
[Link] size
[Link]
orientation
[Link] of
centralisation
Component 1
The differences among the individual buyers expectations are caused by the certain factors.
These factors include:
Background of individuals
Information sources
Active search
Perceptual distortion
Satisfaction with past purchases.
Component 2
determine whether the buying decisions are autonomous or joint.
There are six variables and these variables can be classified as:
Product specific factors
• Time pressure
• Perceived risk
• Type of purchase
Company specific factors
• Company size
• Company orientation
• Degree of centralisation
Component 3
The methods used for conflict resolution in joint-decision making process
are indicated by the Component (3) in the model.
It includes :
Problem solving
Persuasion
Bargaining
Politicking
II. Situational factors
Situation factors can be varied like
Economic conditions
Labour disputes
Machine breakdowns
Mergers and acquisitions.
SHETH MODEL OF CONSUMER BEHAVIOUR
BUY GRID MODEL
• In 1967, the Canadian, American and Israeli marketing
researchers, Robinson, Faris and Wind, introduced the buygrid.
• Their framework consists of a matrix of buyclasses and
buyphases.
• Seeks variety of information to the solutions of organisational
problem.
• The greater the cost or perceived risks related to the
purchase, the greater the need for information and the larger
the number of participants in the buying centre.
• The buyer wants to replace a product the organisation
uses.
• The decision making may involve plans to modify the
product specifications, prices, terms or suppliers
• when managers of the company believe that such a
change will enhance quality or reduce cost.
• In such circumstances, the buying centre proved to
require fewer participants and allow for a quicker decision
process than in a new task buyclass.
• The buyer routinely reorders a product with no modifications.
• The buyer retains the supplier as long as the level of
satisfaction with the delivery, quality and price is maintained.
• New suppliers are considered only when these conditions
change.
• The challenge for the new supplier is to offer better conditions
or draw the buyer's attention to greater benefits than in the
current offering.
REPRESENTATION OF THE MODEL
