Decision Making Units (DMUs) in Industrial Marketing

It is essential to understand the roles of buying-center members or Decision Making Units (DMUs) before identifying the individuals and groups involved in the buying-decision process. It is helpful to the industrial marketers to develop an effective promotion strategy. The roles of buying center members are as follows:

  1. Initiators: The initiators might be any individuals in the buying firm. Often, the users of a product/service play the role of the initiators.
  2. Buyers: The major roles of buyers are obtaining quotations (or offers) from suppliers, supplier evaluation and selection, negotiation, processing purchase orders, speed up deliveries, and implementing purchasing policies of the organization. Generally, they are the purchase (or material) officers and executives.
  3. Users: The user is those individuals who use the product or service that is to be purchased. Generally, users play the role of the initiators. The influence of the users in purchasing decisions may vary from minor to major. They may define the specifications of the needed product. They may be shop-floor workers, maintenance engineers, or R&D engineers.
  4. Influencers: Those individuals who influence the buying decision are known as influencers. Generally, technical people such as designers, quality control engineers have a substantial influence on purchase decisions. Sometimes, individuals outside the organisation, who are experts or consultants, play the role of influencers by drawing specifications of products or services.
  5. Deciders: The deciders make the actual buying decisions. They may be one or more individuals involved in the buying decision. It is very significant to identify the deciders, although at times it may be difficult task. Generally, for routine purchases the buyer (or purchase executive) may be the decider. But, for high-value and technically complex products, senior executives are the deciders.
  6. Gatekeepers: The gatekeepers are those individuals who control (or filter) the flow of the information regarding products and services to the members of the buying center. Sometimes, the gatekeepers may control sales people’s meetings with the members of the buying center. Gatekeepers are often the assistants or junior persons attached to purchase (or materials) manager.

After understanding the roles of DMUs, industrial marketers must identify the individuals and groups who are the members of buying center. The DMUs are useful tools which answers the question-Who are involved in buying decision in an industrial organization? It is defined as a body of all the individuals or groups participating in the buying decision process and who have interdependent objectives and share common risks. The emphasis in the buying center is on the organizational groups i.e. the functional areas, which participate in the buying decision process.

The following discussion clarifies different key members or Decision Making Units (DMUs) in industrial buying decisions:

  1. Top Management: For purchases of high value capital equipment, the top management in most firms got involved in the supplier selection, as it may have a major impact on the firm’s operations. The top management in an industrial organisation consists of managing director, director, presidents, and vice-president of general manager. They are generally involved in purchase policy decisions such as diversification into a new product/project, approval of purchase or materials department annual budgets and objectives, and deciding the guidelines for purchase decisions.
  2. Technical Persons: The technical persons are designers, production manager, maintenance manager, quality control manager, R & D manager, and industrial engineers. Generally, they are involved in product specification or description, technical evaluation of offers received from suppliers, negotiations with suppliers, performance feedback on products supplied, and so on. They visit the factories of potential suppliers to achieve more information and assurance of manufacturing capability.
  3. Purchasers: Buyers are the individuals in the purchase or materials department. They may be senior executives or managers, and also, at junior levels, purchase officers or assistants. Generally, they are involved in most of the phases or steps of the purchase activities. They coordinate with technical persons, top management, accounts or finance persons within an organization, as well as, with suppliers or vendors externally. Buyer’s influence on selection of suppliers is considerable. They are conscious of keeping good relations with other decision-making members within the organization and also with the suppliers.
  4. Accounts/Finance Persons: The contribution of finance/accounts persons are seen while finalizing commercial terms such as modes of payment, issuance of bank guarantees, financial approval of capital purchases, issuing payments to suppliers, and so on.
  5. Marketing People: When a purchase decision has an impact on the marketability of a firm’s product, marketing people become influencers in the buying decision process. For example, a manufacturing firm market the electric motors had to change its packing due to damages caused to the product in transportation. It also affects the satisfaction level of the customers. The marketing manager insisted that suppliers should use good quality and thicker wood for packing the motors to minimize damage in transit.

One thought on “Decision Making Units (DMUs) in Industrial Marketing

Leave a Reply

Your email address will not be published. Required fields are marked *