Factors influencing Organisational Buying Behaviour

The factors influencing buyer’s purchase decisions can be conveniently divided into following categories:

  1. Economics Environment: Environmental factors constitute an important determinant of organizational purchasing. This includes economic situation, government policy, competitive development in the industry, technological development and their introduction. For example, if the organizational buyer feels that the government is going to increase tax on industrial buying is likely to increase in the near future, his buying of material will increase as buying will become costly in future due to tax burden. An organization buyer may update his technology if machinery is available at fair rates and interest charges are low. Purchases will be made at lower level, if the recession trends are clearly visible in the economy. An industrial purchaser will be cautions and careful in his buying decisions so that decision will prove appropriate and will not bring loss to the organization. An industrial purchaser will collect information about economic situation in the country and will take appropriate decisions after analyzing such economic information. He has to give special attention to economic environment while taking purchase decision.

Factors influencing Organisational Buying Behaviour

  1. Organizational Factors: Organizational factors are internal factor affecting buying decision. Every purchasing organization has certain objectives and goals, well accepted producer and system for purchasing, and an appropriate organizational structure. These factors directly and indirectly influence its purchase decision. These characteristic provide clues for determining buying decision. The objectives of an organization influence the types of products it needs and the criteria by which it evaluates supplies. Companies frames their procedures/policies for making purchase decision. Government organization normally use bidding while making a purchase. Products specifications are well established and suppliers have to submit bids as per the general notice. In the case of other industrial purchasers may have different procedures for purchasing. Suppliers have to note the procedural differences among the organizations as regards purchases procedures and adjust their quotations,according structure assigns authority and responsibilities for decision making to job positions across a company. Some companies assign authority for purchase decisions to purchase managers while others do not. Informal relations among people (with the organization) in different positions in a purchase organization can affect buying decisions. In many small family owned frims, centralized structures are used. Purchase decisions require the family’s consent. This delays the purchase decisions. In decentralized structure, quick decision are possible at the departmental level. Policies like inventory holding and procedures such as payments or bidding also influence purchase decisions of organizational buyers.
  2. Inter-personal factors: Industrial buying decisions are normally collective and also as per the procedures decided. The buying center involves several individuals with different formal authority, status and persuasiveness. Buying center consists of individuals of the organization concerned with purchase decision process. They share the risk arising out of it. They also have a common goal. There is interaction among the members of a buying center as regards purchases to be made. There is also a possibility of conflict among the members (of a buying centre) in marketing buying decision. The suppliers need to know about such conflicts in order to resolve them so that the marketing/purchasing program can be adjusted accordingly. Conflicts among buying center participants need to be solved promptly so that buying will be done promptly i.e. as per the production schedule prepared. A knowledge of group dynamics helps the marketer to settle conflicts and early release of purchase order.
  3. Individual buyers characteristics/individual factors: In the final analysis, individual factors play an important role in buying decision. The other factors (environmental, organizational, etc.) are important but individuals concerned with purchase decision are equally important. A supplier needs to have complete details of all individuals involved in the purchase decision process. Personal factors/ characteristics include age, education, job position, maturity, etc. as these factors affect individual perception, preference and motivation. Final decision are based on such factors even when their importance is limited in the decision-making. In the final analysis, individual/officer are responsible for taking buying decision far the organization. The make-up of these individual is a major factor influencing buying decision. The supplier has to consider this factor and adjust his sales personnel's accordingly. The industrial buyer may be assertive or may have co-operative attitude. The supplier’s representative has to adjust with all types/ categories of industrial buyers in order to finalize purchase deal.

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Consumer Behaviour Topics