Buying Centers

A buying center is a group of people within an organization who make business purchase decisions.

Learning Objective

Describe the different functions and roles that comprise buying centers within B2B organizations

Key Points

In a business setting, major purchases typically require input from various parts of the organization, such as finance, accounting, purchasing, information technology management, and senior management.
The five main roles in a buying center are the users, influencers, buyers, deciders, and gatekeepers.
In a generic situation, one could also consider the roles of the initiator of the buying process (who is not always the user) and the end users of the item being purchased.

Term

Buying Center
A group of employees, family members, or members of any type of organization responsible for finalizing major purchase decisions.

Example

The stock market is an example of a buying center. A stock market is a public entity (a loose network of economic transactions, not a physical facility or discrete entity) for the trading of company stock (shares) and derivatives at an agreed price. Many people are involved in the daily transactions and the purchase decisions both on the buying side and the selling side. Stock markets allow businesses to be publicly traded, or raise additional financial capital for expansion by selling shares of ownership of the company in a public market. Major purchases of stock typically require input from various parts of the organization, such as finance, accounting, and senior management.

Full Text

Buying Centers

A buying center is a group of employees, family members, or members of any type of organization responsible for finalizing major purchase decisions. In a business setting, major purchases typically require input from various parts of the organization, such as finance, accounting, purchasing, information technology management, and senior management. Highly technical purchases, such as information systems or production equipment, also require the expertise of technical specialists. In some cases the buying center is an informal ad hoc group, but in other cases, it is a formally sanctioned group with specific mandates, criteria, and procedures. The employees that constitute the buying center will vary depending on the item being purchased.

In a generic sense, there are typically six roles within buying centers. These roles include:

Initiators who suggest purchasing a product or service
Influencers who try to affect the outcome decision with their opinions
Deciders who have the final decision
Buyers who are responsible for the contract
End users of the item being purchased
Gatekeepers who control the flow of information

Because of the specialized nature of computer and software purchases, many corporations use buying centers that are specialized for information technology acquisition. These specialized buying centers typically receive information about the technology from commercial sources, peers, publications, and experience. In this process, top management, the IT director, IT professionals, and other users collaborate to find a solution.

A better buying center for marketing might include:

Users - The users will be the ones to use the product, initiate the purchase process, generate purchase specs, and evaluate product performance after the purchase.
Influencers - The influencers are the tech personnel who help develop specs and evaluate alternate products. They are important when products involve new and advanced technology.
Deciders - Deciders choose the products.
Buyers - Buyers select suppliers and negotiate the terms of purchase.
Gatekeepers - Gatekeepers are typically secretaries and tech personnel. They control the flow of information to and among others within the buying center. Buyers who deal directly with a vendor are gatekeepers.

Chairman of Hong Kong Stock Exchange

The chairman of the Hong Kong Stock Exchange is an example of a member in an organization responsible for finalizing major purchase decisions.

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