Models of Organisational Buying Behaviour: Presented by

MODELS OF ORGANISATIONAL BUYING
BEHAVIOUR
Presented By:
Abhijith Tom, RNo:01
Athul Sekhar A, RNo:14
Gopika Krishnan, RNo:20
Preeti Pushpan, RNo:37
INTRODUCTION TO ORGANIZATIONAL BUYING
• Organizational buying means the activity of buying goods or services by

organizations.
• An organization may be any industry, which buys raw materials necessary for
production of finished goods, machines, machine parts, other supplies etc.
• Similarly government organizations such as ministry, departments, divisions

etc. buy goods or services for their use.
• Wholesalers, retailers, distributors , resellers etc. buy goods or services to

produce finished goods, resale, ultimate use etc.,
CHARACTERISTICS OF ORGANISATIONAL BUYING
 Derived Demand
 Geographical Concentration
 Few buyers and large Volume
 More Direct channel of Distribution
 Rational buying
 Professional buying
 Complexity
MODELS OF BUYING BEHAVIOUR
• Webster and Wind model
• Sheth model of Industrial buying behaviour
• Buy grid model

WEBSTER AND WIND MODEL
• In the early 1970s, Industrial marketing professors Frederick.E. Webster and

Yoram Wind proposed this model.
• They saw industrial buying not as single events, but as organizational

decision-making processes where multiple individuals decide on a purchase.
• They introduced the concept of buying centre which makes purchase

decisions as an informal group.
REPRESENTATION OF THE MODEL
Sheth model of Organizational Buying
 In 1973, Professor Jagdish N Sheth developed the Sheth model of

Organizational Buying.
 highlights the decision-making by two or more individuals jointly, and

the psychological aspects of the decision-making individuals in the
industrial buying behavior.
 It includes three components and situational factors, which determine the

choice of a supplier or a brand in the buying decision making process in an
organization.
SHETH MODEL INCLUDES
I. Components
 Component 1
 Component 2
 Component 3
II. Situational Factors

Component 1 Component 2 Component 3 Situational
factors
Variables that Methods used for

Differences among
determine conflict resolution in
individual buyers
autonomous or joint joint decision making
caused by factors:
buying decision: process :
1. Background of Supplier
(A)Product specific 1. Problem solving
individuals Or
factors: 2. Persuasion
2. Active search
1.Time pressure 3. Bargaining Brand choice
3. Perpectual
2.Perceived risk 4. Politicking
distortion
3.Type of purchase
4. Satisfaction with
(B) Company
past purchase
specific factors:
1.Company size
2.Company
orientation
3.Degree of
centralisation
Component 1
 The differences among the individual buyers expectations are caused by the certain factors.
 These factors include:

Background of individuals
 Information sources
 Active search
 Perceptual distortion
 Satisfaction with past purchases.
Component 2
 determine whether the buying decisions are autonomous or joint.
 There are six variables and these variables can be classified as:
Product specific factors

• Time pressure
• Perceived risk
• Type of purchase
Company specific factors

• Company size
• Company orientation
• Degree of centralisation
Component 3
 The methods used for conflict resolution in joint-decision making process

are indicated by the Component (3) in the model.
 It includes :
Problem solving
Persuasion
Bargaining
Politicking
II. Situational factors
 Situation factors can be varied like
Economic conditions
Labour disputes
Machine breakdowns
 Mergers and acquisitions.
SHETH MODEL OF CONSUMER BEHAVIOUR
BUY GRID MODEL
• In 1967, the Canadian, American and Israeli marketing

researchers, Robinson, Faris and Wind, introduced the buygrid.
• Their framework consists of a matrix of buyclasses and

buyphases.
• Seeks variety of information to the solutions of organisational
problem.
• The greater the cost or perceived risks related to the

purchase, the greater the need for information and the larger
the number of participants in the buying centre.
• The buyer wants to replace a product the organisation
uses.
• The decision making may involve plans to modify the
product specifications, prices, terms or suppliers
• when managers of the company believe that such a
change will enhance quality or reduce cost.
• In such circumstances, the buying centre proved to
require fewer participants and allow for a quicker decision
process than in a new task buyclass.
• The buyer routinely reorders a product with no modifications.
• The buyer retains the supplier as long as the level of

satisfaction with the delivery, quality and price is maintained.
• New suppliers are considered only when these conditions

change.
• The challenge for the new supplier is to offer better conditions

or draw the buyer's attention to greater benefits than in the
current offering.
REPRESENTATION OF THE MODEL

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MODELS OF ORGANISATIONAL BUYING

• Organizational buying means the activity of buying goods or services by

• Similarly government organizations such as ministry, departments, divisions

• Wholesalers, retailers, distributors , resellers etc. buy goods or services to

 Few buyers and large Volume

 More Direct channel of Distribution

• Webster and Wind model

• Sheth model of Industrial buying behaviour

• Buy grid model

• In the early 1970s, Industrial marketing professors Frederick.E. Webster and

• They saw industrial buying not as single events, but as organizational

• They introduced the concept of buying centre which makes purchase

 In 1973, Professor Jagdish N Sheth developed the Sheth model of

 highlights the decision-making by two or more individuals jointly, and

 It includes three components and situational factors, which determine the

II. Situational Factors

Variables that Methods used for

 These factors include:

Product specific factors

Company specific factors

 The methods used for conflict resolution in joint-decision making process

 Situation factors can be varied like

• In 1967, the Canadian, American and Israeli marketing

• Their framework consists of a matrix of buyclasses and

• The greater the cost or perceived risks related to the

• The buyer retains the supplier as long as the level of

• New suppliers are considered only when these conditions

• The challenge for the new supplier is to offer better conditions

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