The Decision-Making Unit (DMU)
An important point to understand in organizational buyingOpens in new window is that the buyer, or purchasing officer, is often not the only person that influences the decision, or actually has the authority to make the ultimate decision.
Rather, the decision is in the hands of a decision-making unit (DMU), or buying center as it is sometimes called. This is not necessarily a fixed entity.
A DMU is a group of individuals brought together for the purpose of making a purchasing decision. Marketers need to understand that the members of the DMU play a variety of roles in the purchase process.
Members of the DMU may change as the decision-making process progresses. Thus a managing director may be involved in the decision that new equipment should be purchased, but not in the decision as to which manufacturer to buy it from.
Six roles have been identified in the structure of the DMU, as follows.
- Initiators: those who begin the purchase process, e.g., maintenance contracts.
- Users: those who actually use the product, e.g. welders.
- Deciders: those who have authority to select the supplier/model, e.g. production managers.
- Influencers: those who provide information and add decision criteria throughout the process, e.g. accountants.
- Buyers: those who have authority to execute the contractual arrangements, e.g. purchasing.
- Gatekeepers: those who control the flow of information, e.g. secretaries who may allow or prevent access to a DMU member, or a buyer whose agreement must be sought before a supplier can contract other members of the DMU.
A key point to realize is that the DMU resides within the buying organization. External influences, such as the salespeople of supplying companies, are not therefore part of the DMU:
A DMU is customer not supplier based. Consequently a decision-making unit is defined as a group of people within a buying organization who are involved in the buying decision.
For very important decisions the structure of the DMU will be complex, involving numerous people within the buying organization.
The marketing task is to identify and reach the key members in order to convince them of the product’s worth. Often communicating only to the purchasing officer will be insufficient, as this person may be only a minor influence on supplier choice. Relationship management is a key importance in many organizational markets.
When the problem to be solved is highly technical, suppliers may work with engineers in the buying organization in order to solve problems and secure the order.
One example where this approach was highly successful involved a small company that won a large order from a major car company owing to its ability to work with the car company in solving the technical problems associated with the development of an exhaust gas recirculation valve. In this case, the small company’s policy was to work with the major company’s engineers and to keep the purchasing department out of the decision until the last possible moment, by which time it alone would be qualified to supply the part.
Often, organizational purchases are made in committees where the salesperson will not be present. The salesperson’s task is to identify a person from within the decision-making unit who is a positive advocate and champion of the supplier’s product. This person (or ‘coach’) should be given all the information needed to win the arguments that may take place within the decision-making unit. For example, even though the advocate may be a technical person, he or she should be given the financial information that may be necessary to justify buying the most technologically superior product.
Where DMU members are inaccessible to salespeople, advertising, the Internet or direct marketing tools may be used as alternatives.
The relatively low cost of direct mail or e-mail campaigns makes them tempting alternatives to personal visits or telephone calls. Setting up a website can also be relatively inexpensive once the initial set-up costs have been met. However, wrongly targeted direct mail, a poorly designed website or a badly executed e-mail campaign can cause customer annoyance and tarnish the image of the company and brand.
Business-to-business companies are turning to integrated marketing communications as a means of using the strengths of a variety of media to target business customers.
Integrated marketing communications is a concept that sees companies coordinate their marketing communications tools to deliver a clear, consistent, credible and competitive message about the organization and its products.