Dr. Dawne MartinBusiness MarketingSeptember 22, 2011

Learning Objectives Exam 1 – Thursday, September 28 To apply theories of organizational buying

behavior to buying situations to determine marketing strategy

To investigate the impact of the buying center roles on sales and marketing strategy.

Chapter 5 Anderson and Narus, “Customer Value

Propositions in Business”, HBS, March 2006 Part II of Project – Monday, October 3

Reward-Measurement TheoryPaul Anderson & Terry M. Chambers, “A Reward/Measurement Model of Organizational Buying Behavior, Journal of Marketing, Spring, 1985.

Motivation

Role Perceptions

Abilities & Traits

Causal Attributions

Purchasing Behavior

Purchasing Performance

Performance Measurement

System

Intrinsic Rewards

Extrinsic Rewards

Perceived Equitable Rewards

Satisfaction

Organizational Buying Behavior

Environmental Forces

Organizational Forces

Group Forces

Individual Forces

Forces Influencing Organizational Buying

Behavior

Adapted From: Frederick E. Webster, Jr. and Yoram Wind, A General Model for Understanding Organizational Buying Behavior, Journal of Marketing, April, 1972.

Environmental Forces

Economic Influences

Political & Legal Influences

Technological Influences

Environmental Uncertainty

Organizational Forces

Strategic Priorities Organizational

Structure & Climate Strategic Role of

Purchasing Departments &

Functional Areas Involved in Decisions

Individual Forces

Evaluative Criteria Reward &

Measurement Systems

Information Processing

Risk Reduction Strategies Uncertainty about

outcome Magnitude of the

consequences

Dimensions of the Buying Center Time Dimension

Time fragmentation: Members come and go Decision cycle time

Vertical and Horizontal Dimensions Vertical: number of layers of management Horizontal: number and types of

departments and outside consultants Formalization Dimension

How well are purchasing roles and tasks defined in purchasing policies and procedures?

Buying Center Roles Initiator: Starts the purchasing process by

recognizing the need Influencers: Affect decision-maker’s final

choice through recommendation Gatekeepers: Control information into and out

of the buying center Users: Those that use the product/service Purchasing Agent: Person that makes the

purchase or does the paperwork Decision-Maker: Person who makes final

decision, or chooses between alternatives

Sources of Information

Complex Reward Structure

Reward Raise Recognition (pat on the

back) by boss Peer’s appreciation Personal satisfaction Nomination for staff

award

Importance Very important Important

Very important Extremely

important Important

COULD THERE BE OTHER REWARDS?COULD THERE BE OTHER REWARDS?

SRI International Situation: Purchase of new scanners to meet

contract with large state government agency Players

Akshay Menon – SRI’s Dallas operations head Margier Cabellero – production manager George Whitaker – Chief Financial Officer Gloria Sigel – Human Resources Manager

Questions: Who plays which role in the buying center? What are the sources of risk for each? How would this information affect your marketing

of this product?