Organizational Buying Behavior

• The organizational buying process is the decision-making process used by formal organizations to establish a need for purchased products and services, and to identify, evaluate, and choose among alternative brands and suppliers

Participants in the Organizational Buying Process

• Users are those who use the product or service
• Influencers directly influence the buying decision but do not make the final decision themselves
• Deciders select product requirements and suppliers
• Approvers authorize the proposed actions of deciders or buyers.
• Buyers have formal authority for selecting suppliers and arranging the terms of purchase
• Gatekeepers have the power to prevent sellers or information from reaching members of the buying center

Major Influencers on Organizational Buyers

• Environmental factors: organizational buyers are heavily influenced by the current and expected economic environment
• Organizational factors: each organization has specific objectives, policies, procedures, organizational structures, and system related to buying
• Interpersonal factors: the buying center usually includes several participants with differing levels of interest, authority, and persuasiveness
• Individual factors: each participant in the buying decision process has personal motivations, perceptions, and preferences

The Organizational Buying Decisions

• Problem recognition: the buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a good or a service
• General needs description: the buyer determines the requirements of the product
• Product specifications: once the general requirements have been determined, the specific requirements for the product are developed
• Supplier search: the buyer tries to identify the most appropriate suppliers
• Proposal solicitation: qualified suppliers are invited to submit proposals
• Supplier selection: once the meeting planner has drawn up a short list of suppliers, qualified hotels are invited to submit proposals
• Order-routine specification: the buyer writes the final order, listing the technical specifications
• Performance review: the buyer does a post-purchase evaluation of the product

The Group Business Markets

• Conventions are usually the annual meeting of an association and include general session, committee meetings, and special-interest sessions
• Association meetings sponsor many types of meetings, including regional, special-interest, educational, and board meetings
• Corporate meetings: a command performance for employees of a company
• Small Groups: meetings of fewer than fifty people are gaining the attention of hotels and hotel chains
• Incentive travel: a reward participants receive for achieving or exceeding a goal

SMERF Groups

• S: social
• M: military
• E: Educational
• R: Religious
• F: Fraternal
• Segmentation of group markets by purpose of meeting
• Restaurants as a meeting venue