Influences on Industrial Buyers’ Choice of Products: Effects of Product Application, Product Type, and Buying Environment

INTRODUCTION During the past 25 or so years a number of attempts have been made to determine and describe industrial (or organizational) buying processes. These have included a number of macromodels of the entire process.|1^ A number of studies have also examined various particular aspects of that process.|2^ The product selection subprocesses within the overall buying process have also received some attention, but mostly directed at specific products or markets (high-tech markets, for example|3^). Although some efforts have been aimed at the product selection part of the process, for the most part these have considered particular buyer-related elements, such as the buying situation, buyer experience, or the buying process,|4^ as opposed to product-related factors. This article addresses the question of whether there are some general factors related to products themselves and to their application or use that affect how buyers evaluate them when considering prospective buys. This question is addressed by examining the relative importance of various product attributes to buyers of products of different types and applications. The potential effects of the buying environment are also considered. Specifically, these various product and environmental factors are defined as follows. 1. Product application means one of three general product use categories: (a) "capital equipment" or other capital items, (b) items used in the "production process" as either product components or process-related, and (c) "administrative" products. 2. Product type means one of two general types of products: (a) those generally termed "commodities," which are fungible or interchangeable with other like-specified products, and (b) those generally termed "differentiated," which means in this context to be somewhat unique, particularly between manufacturers of the same class of product.(*) 3. Buying environment includes various influences and conditions within and outside the buying center, such as type of buying organization (e.g., centralized or decentralized), size of firm, financial condition of firm, the relative size of a particular buy, and the role or position of persons involved in the selection process.(**) To conduct the study, a representative product was selected for each of the six product categories that make up the combinations of the three product applications and two product types. The products selected are shown in Table I. Table I PRODUCTS SELECTED, BY PRODUCT APPLICATION AND TYPE; NUMBER OF RESPONDENTS BY PRODUCT Product Type Product Application Differentiated Commodity Administrative Office Consumable Workstation Office Furniture Supplies (29 Respondents) (30 Respondents) Capital Personal Line Pipe Computers (45 Respondents) (36 Respondents) Production Specialty Commodity Process Chemical Chemicals (36 Respondents) (37 Respondents) * The term "branded" is not used because there exist both commodity and differentiated branded products. ** It has long been accepted that industrial buying usually involves multiple persons who are collectively referred to as a "buying center."|5^ APPROACH Product attributes affect the utility of products to buyers. Because utility affects buyer preference and choice, the importance of attributes to the buyer therefore affects buyer preference and choice. This article explores the impact of product application, type, and buying environment on the importance of product attributes, and the resulting implications for the product selection process. Product attributes, as used here, is defined as broadly inclusive--encompassing not only physical product features such as size and shape, but also price, and in some cases such nonphysical attributes as availability, manufacturer/seller image, country of manufacture, and availability of supplier engineering assistance. …