An organization’s purchase decisions are likely to be more complex because of the number of individuals and groups involved in the purchase decision and the possibility of the actual product/service being more expensive and sophisticated. All the individuals that participate in the decision-making process will have interdependent goal sand share common risks although they may face different systems of reward. What emerges is a decision-making unit (DMU) made up of all these individuals and groups. Individuals in the DMU will play one of six main roles:
Acronyms developed from lifestyle groupings
Political pressures also build up in the DMU because individuals look for different attributes from a particular product.This is partly based on the operational needs of their department. Individuals also pursue their own self-interest and are motivated by the formal rewards available to them. Individuals in different areas of the company may be given incentives in different ways. Buyers may be evaluated and/or given incentives to save the organization money.
Production managers may be given quality and output targets. This can lead to strange effects. Bonoma (1982) talks of an organization that reduced its list price to well under its competitors’, but gave only small discounts off this list price. All the competitors charged higher prices but gave larger discounts. Even though the company had lower prices organizations favored the competitors. The main reason for this turned out to be that the buyers were evaluated and given incentives based on the price concessions they were able to obtain during negotiations rather than on the end price paid.
Figure below shows how each unit may have its own set of rewards. These disparate incentives can also lead to conflict within the DMU. Buyers may feel they cannot save money because the production engineers are setting technical specifications on a product that are too high . Alternatively, production engineers may not be able to reach their output targets because the buyer has bought a cheaper product from a supplier who has less dependable delivery times. This demonstrates that organizational buying decisions are more complex than general consumer buyer behavior. Framework shave been developed to give a more comprehensive view of the complex factors involved. These also act as a foundation for developing meaningful segmentation criteria in organizational markets. The Webster– Wind and the Seth frameworks both try to develop logical models of this process.
Rewards/incentives as a source of conflict in organizational decisionmaking units
Marketing Strategy Related Interview Questions
|Marketing Research Interview Questions||Strategic Management Interview Questions|
|Strategic Brand Management Interview Questions||Brand Management Interview Questions|
|Public Relations Interview Questions||Digital Marketing Interview Questions|
|Personal branding Interview Questions||Market Research Analyst Interview Questions|
Marketing Strategy Tutorial
The Strategic Perspective
Developing A Future Orientation
Targeting, Positioning And Brand Strategy
Product Development And Innovation
Alliances And Relationships
The Strategic Marketing Plan
All rights reserved © 2018 Wisdom IT Services India Pvt. Ltd
Wisdomjobs.com is one of the best job search sites in India.