Relevance of Buying Center Analysis in Industrial Markets

Chapter 3, Buying types:
The procedure of the procurement process and the structure of the buying center are determined by specific buying type factors. The value of investments, the buying motive, the buy classes and the product technology are defined as the characteristics with the largest influence on purchasing decisions.
3.1 Value of investments:
A Spiegel Survey from 1982 shows that the amount of investment is the most influential factor in the decision-making process. This is clearly evident due to the fact that an investment of several millions Euro contains other risks for the purchasing company than an investment which is easily revisable. Furthermore, the survey shows that the amount of investment also influences the structure of the buying center. This is caused by a wider share of decision-making authority due to the consultation of experts from different departments. Moreover, the amount of investment not only influences the structure of the buying center and the length of the decision making process but also the number of considered suppliers.
3.2 Buying motive:
In respect of the buying motive a distinction is made between initial investment, replacement investment and expansion investment. The procurement organization has no experiences with the object in the course of initial investments, whereas they have concrete know-how concerning replacement investments and expansion investments. For that reason the perceived risk is higher in the case of initial investments than in replacement investments and expansion investments. Generally, in the case of replacement investments, solution approaches can be considered due to the fact that the original object has to be replaced. Whereas in expansion investments, interface problems arise due to the fact that the object to be procured has to be compatible with existing objects.
In order to reduce the higher risk, initial investments are distinguished by particularly intensive information behavior,

Markus Gaggl was born in 1987 in Linz / Austria. After an apprenticeship with one of the leading industrial companies of Austria, he finished the extra occupational higher technical school with the main focus on Mechanical Engineering and Construction at the Technical College Steyr. Afterwards, the author attended a bachelor degree programme with the main focus on international Marketing and Sales Management at the University of Applied Sciences Campus02 in Graz. At the moment, the author is in the final phase of his study which he will complete in June 2014 with the academic degree B.A. (Bachelor of Arts in Business).
Already during his study, the author collected comprehensive practical experiences in the industrial goods sector, in particular in the steel-producing and steel-processing industry. Fascinated by the exchange-process between companies and customers, the author decided to carry out a scientific investigation in this area. The investigation was published in form of the present scientific book.