A buying center, also called decision-making unit (DMU),[1] brings together "all those members of an organization who become involved in the buying process for a particular product or service".[2] Show
The concept of a DMU was developed in 1967 by Robinson, Farris and Wind (1967).[3] A DMU consists of all the people of an organization, who are involved in the buying decision.[4] The decision to purchase involves those with purchasing and financial expertise; those with technical expertise and of course the top-management. McDonald, Rogers & Woodburn (2000) say that identifying and influencing all the people involved in the buying decision is a prerequisite in the process of sales. The concept of a buying center (as a focus of business-to-business marketing, and as a core fundamental in creating customer value and influence in organisational efficiency and effectiveness) formulates the understanding of purchasing decision-making in complex environments. Some of the key factors influencing a buying center or DMU's activities include:
In some cases the buying center is an informal ad hoc group, but in other cases, it is a formally sanctioned group with specific mandates, Decision-making process[edit]When the DMU wants to purchase a certain product or service the following steps are taken inside the buying center:
In this process of making decisions different roles can be given to certain members of the center of the unit depending on the importance of the part of the organization. Buying center size[edit]American research undertaken by McWilliams in 1992 found out that the mean size of these buying centers mainly consists of four people.[6] The range in this research was between three and five people. The type of purchase that has to be done and the stage of the buying process influence the size. More recent research found that the structure, including the size, of buying centers depends on the organizational structure, with centralization and formalization driving the development of large buying centers.[7] Conceptual and methodological issues in buying center research[edit]There are several issues concerning buying centers which need additional research.[8] These issues can be divided into various spheres: Buying center boundaries and buying center domain[edit]Distinguishing the buying center from its environment, also defining and delimiting the activities of a particular buying center. Buying center structure[edit]Understanding how organizational structure may differ from or may shape the structure of the buying center and examining how a particular buying strategy may serve to mediate the effects of environmental uncertainty on the structure of the buying center. Process considerations in buying center[edit]Power and conflict issues within the buying center. Decision making[edit]One stream of research focuses on the number of decision phases and their timing and the other emphasizes the type of decision-making model (or choice routine) utilized. Communications flow[edit]The informal interactions that emerge during the buying process. References[edit]
Why is the buying center important?The Buying Center is a powerful concept of customer insights. Understanding it can help you in marketing, product development, sales or as a management decision maker. It gives you information to select strategies around a stringent storyline and your brand's working channels.
Why buying decision process is important?The consumer decision-making process is important for businesses because it helps them understand why and how customers make purchase decisions. By understanding the steps involved in the decision-making process, companies can tailor their marketing efforts to match the needs and wants of their target market.
What is important for the customer to make a buying decision?The consumer decision-making process involves five basic steps. This is the process by which consumers evaluate making a purchasing decision. The 5 steps are problem recognition, information search, alternatives evaluation, purchase decision and post-purchase evaluation.
Why is it important to make wise decisions in purchasing products and services?Understanding customer decision making is crucial to profitable growth, and particularly so in driving product development or sales and marketing investment decisions. Many organizations spend significant resources to identify customer needs precisely and early to stay ahead of competition.
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