Business Purchase Decision Steps 1 and 2

1. Need Recognition

In a business environment needs arise from just about anywhere within the organization.  The Buying Center concept shows that Initiators are the first organizational members to recognize a need.  In most situations the Initiator is also the User or Buyer.  Users are inclined to identify the need for new solutions (i.e., new products) while Buyers are more likely to identify the need to re-purchase products.  But marketers should also understand that more companies are replacing human involvement in re-purchase decisions with automated methods, thus making it more challenging for competitors to replace currently purchased products.  In straight re-purchase situations, whether there is human intervention or not, the purchasing process often jumps from Need Recognition to Purchase and little search activity is performed.

As part of this step, a specifications document may be generated that lays out the requirements of the product or service to be purchased.  Several members of the Buying Center may be involved in creation of the specifications.  For the marketer, establishing close contact with those who draw up the specifications may help position the marketer’s product for inclusion in the search phase.

2. Search

The search for alternatives to consider as potential solutions to recognized needs is one of the most significant differences between consumer and business purchasing.  Much of this has to do with an organization’s motive to reduce costs.  While a consumer will probably not search hard to save two cents a gallon on gas, a company that has a large fleet of cars or trucks certainly will.  In fact, this step in the purchase process is where professional buyers make their mark.  The primary intention of their search efforts is to identify multiple suppliers who meet product specifications and then, through a screening process, offer a selected group the opportunity to present their products to members of the Buying Center.  Although in some industries, such as chemicals, online marketplaces and auction sites offer buyers another option for selecting suppliers that may not include supplier presentations.

For suppliers, the key to this step of the purchase process is to make sure they are included within the search activities of the Buyer or others in the Buying Center.  In some instances this may require that a supplier work to be included within an approved suppliers list.  In the case of online marketplaces and auction sites, suppliers should work to be included within relevant sites.

How Businesses Buy
Business Purchase Decision Steps 3, 4 and 5