Business-to-business marketing: organizational buying behaviour, relationships and networks 143
from outside and within the organization.
Understanding these factors and their inter-
relationships is critical to the competitive pos-
itioning of the business, to the development of
appropriate market and product development
plans, and to the management of the whole
marketing task of the business.
Increasingly, companies are recognizing the
significant impact which professional procure-
ment can have on profitability, and British
manufacturing industry is increasingly buying
in components and subassemblies, rather than
manufacturing in-house. For example, some
telecommunications equipment manufacturers
now buy in items accounting for up to 80 per
cent of total cost. Thus, even a 2 per cent
procurement saving can have a marked effect on
profitability or give the company a significant
price advantage in the marketplace. Addition-
ally, professional purchasing also helps secure
long-term and improved sources of supply.
This growing importance and recognition
of purchasing makes it imperative for business-
to-business marketers to also increase their
professionalism. A crucial element of such
professionalism is, as consumer product mar-
keters have so long recognized, the under-
standing of buying behaviour. However, in
business-to-business markets this is more diffi-
cult than in consumer markets and requires an
understanding of various academic disciplines,
which underlie the polyglot area we term
organizational buying behaviour. To be effect-
ive, marketers must address a number of key
questions:
How is buying behaviour different in business
markets?
Who are the key participants in purchasing?
What process and procedures are followed in
choosing and evaluating competitive offerings?
What criteria are used in making buying
decisions?
What sources of information and influence are
used?
What organizational rules and policies are
important?
What key relationships exist with other
suppliers and buyers?These and other questions must be considered
and answered if the business-to-business mar-
keter is to be truly professional.
This chapter attempts to provide a frame-
work of understanding by which these ques-
tions can be addressed. The most important
theoretical and research contributions of the
last two decades are briefly reviewed to give a
comprehensive picture of the current state of
the art in the study of organizational buyer
behaviour.
Organizations buy a diverse and often
highly complex and interrelated range of goods
and services as factor inputs to their own
product and service portfolio, as indicated in
the following list: Raw materials.
Buildings, machinery and other capital
equipment.
Components.
Consumable materials.
Professional services.
Energy.
Finance.
Labour.Clearly the nature and importance of the type
of product/service being purchased will have
significant consequences to the purchasing
structures, process and criteria.
However, it is important to recognize that
no company exists in isolation from other
players in the industrial milieu. Success, and
failure, depends upon the company’s ability to
co-operate with its suppliers and customers.
The actions of competitors, regulators, govern-
ments and many others also have important
impacts upon the individual firm.
During the past 20 years, a considerable
body of knowledge has developed about the
structure, dynamics and processes of business
relationships and their management. These
relationships are at the heart of the reality of