Industrial buying behaviour: A study of non-routine purchase decision process in a public sector interprise

Abstract

Industrial buying behavior is a process through which industrial organizations obtain goods and services. Process refers to the set of activities that result in a commitment to action. Literature on Industrial buying behavior can be dichotomized as those examining the role and influence of the purchase activities along with the arrangement of these activities. There is a paucity of literature on Industrial buying behavior in the Indian context. Also, there is insufficient published literature relating the nature of purchase activities to the arrangement of activities. It can be expected that initial search would be with internal sources (own experience, specialists within the organization) and later search extending to external sources (suppliers, consultants). Search could also be performed in an incremental fashion, causing repetition in activity-sets of determining specifications, supplier search and evaluation choice. The arrangement of activity-sets is likely to be affected by extent of search, type of analysis carried out, and manner in which decision is taken. The effect of sponsor (indentor), checks and balances of the system and the organizational procedures on the activities as well as the structure of the process are also expected. The major objective of the study was to discern the structure of purchase process in an industrial buying situation. This entailed an examination of the nature of the purchase activities, the arrangement of activities and influences on these aspects. Based on literature survey, a conceptual framework was developed. A pilot study of two cases of non-routine purchase decisions was carried out to test the framework and refine the data collection methodology. The data for sixteen cases studied were collected from a public sector organization, for infrequently purchased items with a value above Rs.2 lakhs. The sources of data were office records and key participants in the purchase process. The data were collected using case study questions. Data for all the sixteen cases were organized in a chronological sequence. Analysis used plotting of activities to arrangement of activities and to identify the influences on these. The analysis used an ‘explanation building’ approach. This approach uses narrative from to test expectations or to account for the observations. Analysis of the sixteen purchase decision indicated certain influences that, without affecting search, caused repetition of activities. Certain similarities in activities for some of the purchase processes and differences with some others resulted in developing o typology for purchase process. What was assume to be single homogeneous type of purchase decision process was observed to comprise of four different process types. The commonalities and the differences among the four types of purchase process were studied. Finally, the implications of the study for theory and practice have been examined.