Organisational buying behaviour consists of:
1 the psychological aspect
2 the aspect relating to the conditions which precipitate joint decisions and
3 the aspect relating to the process of joint decision making with inevitable conflict among the decision-makers.
Many industrial buying decisions are made by people working in the purchasing, quality control and manufacturing departments. Their decisions are influenced by their expectations of suppliers and brands.
These expectations, on the other hand, are influenced by the back- ground of the individuals involved, the sources from which they get information, active search, perceptual distortion and satisfaction with past purchases.
Various studies reinforce the point that individual’s perceptions and experiences vary and these perceptions and experiences influence decision making process.
‘Not all industrial buying decisions are made jointly by the various individuals involved in the purchasing process.’ In some cases such decisions are delegated and it is important for the supplier to find out where and to whom the decisions are delegated.
‘There are six primary factors which determine whether a specific buying decision will be joint or autonomous. Of the six factors three relate to product-specific factors and the other three relate to company-specific factors.’
Sheth then goes on to explore the ways joint decisions are made and the conflict involved in making industrial buying decisions.
‘Finally, it is important to realize that not all industrial decisions are the outcome of a systematic decision-making process. There are some industrial buying decisions which are based strictly on the set of situational factors for which theorizing or model-build- ing will not be relevant or useful. What is needed in these cases is a check-list of empirical observations of the ad hoc events which vitiate the neat relationship between the theory or the model and a specific buying decision.’
Theories to explain the consumer behaviour process began in the mid-1960s. Jagdish Sheth together with John Howard was the first among leading theorists. Since 1960s there have been numerous researches on the marketing implications of the process. Also since Sheth’s attempt to provide a comprehensive model of organisational buying behaviour, the emphasis has shifted to much more detailed analysis of how actual buying decisions are made and the precise nature of the factors affecting such decision-making.
Jagdish Sheth has been involved in making various contributions in the field of marketing for more than four decades now. He has contributed significantly in the field of telecom marketing and devel- oping breakthrough relationships.
The following extracts come from: Jagdish Sheth and Andrew Sobel (2000). ‘Clients For Life: How Great Professionals Develop Breakthrough Relationships’. Simon & Schuster.
This book is aimed at professionals who want to develop long-term client relationships. The book develops what the authors call the ‘devel- opmental journey – from expert for hire to trusted adviser’:
• Clients today are very discriminating and highly sophisticated and educated individuals.
• Some professionals are treated like vendors.
• Most professionals would like to be extraordinary consult- ants and provide value to their clients.
• The professionals are categorised into:
1 service professions like lawyers, accountants, management consultants,
2 sales executives – business consultants and 3 staff and functional managers.
• Clients want their advisers to be good listeners, empathetic, have conviction, have good bedside manners, and people who can see the big picture.
• They highlight these three barriers to developing breakthrough relationships:
1 Specialisation.
2 Expertise is becoming automated and reduced to a commodity.
3 Many professionals are held back by stereotypes about what clients want them to be and how they should behave.
• To create value for clients they present the following formula:
Insight x Collaborative Relationships = Client value.
• The attributes that represent insight are: selfless independ- ence, empathy, conviction, integrity, ability to think and reason, ability to synthesise, and judgement. These attributes contribute significantly to the professional’s effectiveness.
‘These are the qualities that foster the development and the insights and relationships that lead to consistent value creation for clients, and they are the characteristics that great advisers themselves have intuitively developed. If you want, in short, to become an extraor- dinary professional who commands unwavering client loyalty, you need especially to develop and strengthen these attributes.’
The content of this book and the subject matter reflects the agility of mind of Professor Sheth. He and his co-author have focused on clients as opposed to customers. They write:
‘The distinction between a client and a customer is more than semantic. Customers, for example, buy a product or service with well-defined characteristics that match their needs, with little or no negotiation and discussion between buyer and seller; the profes- sional’s relationship with a client, in contrast, has a consultative aspect to it – there is a give-and-take to clarify needs, identify prob- lems, and recommend solutions. While there doesn’t have to be a personal relationship between a customer and the seller of the product or service, with a client there is typically a close, personal relationship with a high degree of trust. Finally a professional offers a client an authoritative body of knowledge and expertise...’
This book is very valuable in addressing the needs of clients – yet another dimension of present day marketing.
In his recent interview with Management First, he was asked about the impact of globalisation on marketing practice. His response included the point that globalisation was creating diverse commu- nities and he said:
‘There is no need to go out and test anything. There is sufficient cultural diversity in the USA to do a market test there. This devel- opment changes the whole nature of the way we do business.’
He also makes the point on segmentation in a diversified global market.
‘take teenagers: all over the world they are the same so, if you sell MTV or if you sell rock ‘n’ roll music there are no difference between a Chinese teenager and a French, Indian or American teenager.
You can, therefore, organise targeting by either local or global markets…’
‘The other way to do it would take the opposite approach, ignor- ing consumer profiles because of the expense of targeting micro- segments. The solution here might be to adopt the approach of public policymakers, standardising the market and shaping market expectations.’