Download - Dmu & Dmp
The Purchasing Decision
The Purchasing Decision Unit (DMU) The Purchasing Decision Process (DMP)
Learning Objectives of this Session
• The Decision Making Unit (DMU)
• The Decision Making Process (DMP)
• Factors affecting the Purchasing Decision
• B2C and B2B Purchasing Decisions
1: The Decision Making Unit (DMU) Model
The elements of the DMU are:
The Gatekeeper
The Initiator
The Decider
The Buyer
The User
The Financier
Other Influencers
The Gatekeeper
• Controls access to the DMU
• Controls information input into DMU
• Could be an individual (Secretary / PA)
• Could be a department (Customer Service, Sales, Procurement)
The Gatekeeper
Concerns:
“You better have a good reason for disturbing my boss.”
“Let me prove what a good member of the team I am.”
The Initiator
• The person who recognises a problem / need to be addressed
• May or may not be part of ‘formal’ DMU
• Often associated with ‘The User’
The Initiator
Concerns:
“I’ve got a problem – Help me!”
“Make my job easier!”
The Decider
• The person with the authority to make the decision to buy
• May or may not be the person who makes the final choice
• Level of seniority depends on importance of purchase / budget / company culture
The Decider
Concerns:
“Why should I risk my job or reputation on you?”
“If this thing works, how will I get the credit?”
The Buyer
• The person tasked to make the actual purchase
• Degree of choice / power depends on organisation structure
• May be part of a formal ‘Buying Department’
The Buyer
Concerns:
“Don’t give me more problems – or any more work – than I have already.”
The User
• The person/s who actually use or consume the product / service
• Degree of influence on DMU depends on company culture
• Importance of feedback / satisfaction depends on company culture
The User
Concerns:
“I just want this to work – first time, every time.”
“I want this to do just what it said on the tin.”
The Financier
• The person or department which authorises expenditure
• Degree of influence / authority depends on company culture / budget involved
The Financier
Concerns:
“How much?”
“What R.O.I can I expect?”
Influencers
Anyone outside of the DMU which has an influence on its members:
• Formal ‘consultants’• Informal personal
contacts / WoM• Recognised ‘experts’,
role models, personalities and endorsees
Influencers
Concerns:
“If I’m going to be your advocate, don’t make a liar out of me.”
The Decision Making Unit:B2B B2C
• Roles tend to be more formal
• Roles tend to be by job title – but some multi-role play
• Degree of influence may still be affected by strength of personality
• Roles tend to be more informal
• Many roles played by one person
• DMU sometimes associated with members of Family
• Recognises influence of children / non wage earners
2: The Decision Making Process (DMP) Model
The stages of the DMP are:
Recognition of need
Developing product specification
Search for information / supplier
Evaluation of alternatives
Select product / supplier
Decision to buy / Determining terms of contract
Fulfilment of contract
Evaluation
1: Recognition of need
• Many purchases are made to meet a perceived problem
• Customers are interested in ‘benefits’ (solutions) rather than ‘features’
• Problems may be ‘real’ or ‘imagined’• High priority vs. low priority problem solving• New technology may create its own ‘need’
e.g. Walkman, GPS, iPhone
2: Product specification
• May be complex formal B2B process
• Also B2C – especially for major purchases
• Budget
3: Search for information
• Previous purchasing experience• Intensity of search depends on: New Buy / Re-
Buy / Modified Re-buy (Extended, Limited and Routine Problem Solving)
• Advertising and sales literature• Internet• Sales representatives• Store visits• Recommendation from friends and other users
4: Evaluating alternatives
Factors compared:
• Performance (Capable of meeting need)
• Availability
• Price
• Value for money
• Brand?
5: Selection of product / supplier
• Shortlisting
• Request for tenders
• Prioritising choices
6: Decision to buy / Terms of contract
• To buy or not to buy
• Buy now or buy later (re-evaluation of priorities)
• Negotiating terms– Price / Payment– ‘Added value’ benefits
7: Fulfilment of contract
• Delivery
• Fitting
• Schedules
• Specifications
8: Evaluation
Has need been met?Problem areas:• Was product / service misrepresented?• Were specifications correctly determined?• Were expectations raised unrealistically?
(overselling)• Customer ‘satisfaction’ or ‘delight’?• Post-purchase dissonance?• Repeat purchase?
Conclusions:
• Need to identify customers’ decision making processes
• Need to identify members of DMU and their relative influence on the DMP
• What are the customers’ buying criteria• Need to understand buyer behaviour at each
stage of the DMP• Need to adapt customer communications for
each of the above