Analyzing Industrial Buying Behavior focuses on the purchase decisions made by businesses, governments, and institutions for products or services used in production, operation, resale, or maintenance.
The industrial buying process is more complex and formalized than consumer buying, involving multiple stages and participants (buying centers).
Understanding the Industrial Buying Behavior
Industrial buying behavior in the pharmaceutical industry is characterized by:
1. Complex Decision-Making Units:
Purchases involve a group of individuals with different roles and responsibilities, including procurement officers, healthcare professionals, finance teams, and regulatory compliance officers.
2. Technical Specifications:
Products are often purchased based on their technical specifications and their ability to meet specific health care needs.
3. Regulatory Compliance:
All purchases must comply with strict regulatory standards, which can vary significantly from one country to another.
4. Long-Term Relationships:
Due to the complexity and sensitivity of the products, buyers tend to establish long-term relationships with suppliers they trust.
Factors influencing industrial buying behavior include:
1. Organizational Factors:
These involve the company’s objectives, policies, procedures, structures, and systems.
The nature and goals of the organization significantly influence its purchasing decisions.
2. Interpersonal Factors:
Buying decisions in organizations often involve a group of individuals with different roles, expertise, and interests.
The dynamics among these individuals can greatly affect the outcome.
3. Individual Factors:
The personal motivations, perceptions, and preferences of the individuals within the buying center also play a critical role.
4. External Factors:
These can include economic conditions, supply conditions, technology changes, regulatory changes, and competitive developments.
The Industrial Buying Process in Pharma
Problem Recognition: Identifying a need for new medication, equipment update, or raw materials.
General Need Description: Defining characteristics and quantity of needed items.
Product Specification: Developing detailed specs with the help of healthcare professionals.
Supplier Search: Identifying suppliers through research and professional networks.
Proposal Solicitation: Inviting proposals to review suppliers' capabilities and compliance.
Supplier Selection: Evaluating proposals based on product quality, cost, and reliability.
Order-Routine Specification: Specifying order details like delivery schedules and payment terms.
Performance Review: Assessing supplier performance post-delivery to inform future decisions.
The industrial buying process involves more stages than consumer buying, including problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification, and performance review.