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Marketing Basics - Kotler Philip

What has a major impact on industrial buyers?

In the decision-making process, the buyer of industrial goods is subject to many influences . Some market players believe that the main ones are the influences of the economic order. In their opinion, buyers favor a supplier asking for the lowest price or offering the best product or the most comprehensive service. According to this point of view, sellers of industrial goods should focus on offering buyers explicit economic benefits.

According to other sellers, purchasing agents react vividly to personal motives, looking for assistance, attention or opportunities to reduce the risk. Here are the findings of a study of the behavior of purchasing agents of 10 large firms.

Even after entering the office, the manager remains a man. He responds to the “image”, makes purchases from companies that he considers “close”, favors suppliers who show respect for him and take into account his personal views; to suppliers who do something beyond the usual "just for him." The manager is “extremely keenly reacting” to actual or apparent manifestations of disrespect and is inclined to refuse the services of companies that do not respond to requests for proposals or delay these answers6.

According to this point of view, sellers of industrial goods should mainly focus on the human and social factors of the shopping situation.

Procurement agents usually respond to both economic and personal factors. With significant similarities in the suppliers' proposals, the suppliers do not have sufficient grounds for a rational choice. Since meeting the organization’s goals can be achieved with the help of any supplier, personal factors can come into play. On the other hand, if competing goods are significantly different from each other, purchasing agents are more responsible for their choice and pay more attention to economic factors.

Various circumstances affecting purchasing agents, such as environmental factors, organizational characteristics, interpersonal relationships, and individual personality characteristics, are listed in Fig. 41 and are described below 7.

ENVIRONMENTAL FACTORS. Buyers of industrial goods are strongly influenced by such factors of the current and expected economic conditions, the kick level of primary demand, the economic outlook and the cost of obtaining loans. As the level of economic uncertainty increases, purchasers of industrial goods stop investing in the purchase of machinery and equipment and seek to reduce cash inventories. An environmental factor such as an imminent shortage of basic raw materials is becoming increasingly important. Firms are increasingly willing to procure and maintain large stocks of scarce materials. Environmental factors such as the pace of scientific and technological progress, political events, and the activities of competitors also influence buyers of manufactured goods. The seller of industrial goods must also carefully monitor all of these factors, determine the nature of their influence on the buyer and strive to turn emerging problems into new opportunities.

FACTORS OF THE FEATURES OF THE ORGANIZATION . Any procurement organization has its own goals, policies, its own working methods, its own organizational structure and its own organizational systems, which the seller of industrial goods should study. In this regard, a number of questions arise. How many people are involved in the procurement decision? Who are these faces? What assessment criteria do they follow? What are the firm's policies regarding the activities of its purchasing agents and what restrictions does it impose on these activities?

The main factors influencing the behavior of buyers of industrial goods

Fig. 41. The main factors affecting the behavior of buyers of industrial goods

FACTORS OF INTERPERSONAL RELATIONS . The composition of the procurement center usually includes several people of different status, with different powers, different ability to put themselves in the place of another, different ability to convince. Sellers of industrial goods are unlikely to learn about the dynamics of their group behavior in the decision-making process on procurement, although any information that can be obtained about the members of the procurement center and the interpersonal relationships of these people will be useful.

FACTORS OF INDIVIDUAL CHARACTERISTICS OF PERSONALITY . Each procurement decision maker brings personal motivations, perceptions and preferences to the process. All this depends on the age of a particular person, his income, education, official position, type of his personality and willingness to take risks. Procurement agents take clearly different approaches to organizing their work. Some of the young highly educated suppliers are "obsessed" with computers and, before choosing a supplier, carry out a rigorous machine analysis of all competitive offers. Others - the "iron guys" of the old school - get their way by pushing suppliers with each other. Sellers of industrial goods should know their customers and tailor their tactics to specific environmental factors, organization characteristics, interpersonal relationships and individual personality characteristics that influence the purchase.