Mechanisms to influence industrial buyer behavior

Abstract

Industrial buying behavior is the essence of the how organizations choose suppliers. This area needs special attention for understanding how a supplier can gain a foothold into the customers share of purchases. The successful management requires good knowledge of the enterprise's clients and their value perceptions, which is achieved by organizing continual and systematic research of customer behaviors. Focus is on understanding whatthe value is for clients and how to make inter-functional coordination in order to create superior value. Considerable research has already been accomplished in the area of industrial buyer behavior. Among these, the model for industrial buying proposed by Jagadish Sheth explains an integrated model of the industrial buying behavior. This was similar to the Howard-Sheth model, which was more oriented towards consumer buying. Webster and Wind and Faris and Wind also explain industrial buying on organizational, psychological, interpersonal and individual factors. Robinson has analyzed industrial buying in perspective of buying situations. In the research that has been done so far, we found that little has been explained about the perceived risk of the buyer and seller that impacts the buying decision. We explain through a game theoretic approach that risk-taking ability of the buyer impacts the buying process and we choose to enhance the model to include this perspective to the buyerbehavior. In further substantiating the model, we plan to explore one question How does an Indian SME in the Indian IT industry get its first big break into a foreign MNC customer?" and see how the risk taking ability impacted the buying situation in this case. We will try to put together a framework and a survey that can describe the Industrial Buyer Behavior. Using this we will try to estimate the buyer s perceived risk for a given set of strategies of the seller. The buyer seller game is analyzed to see if the seller can affect the perceived risk of the buyer and increase the payoff for the seller in due course.