Factors Affecting Industrial Goods Buying Decision Making in a Manufacturing Company

Headnote

ABSTRACT:

The main aim of this research is to determine the factors affecting industrial good buying decision-making in a manufacturing company. Specifically, this research is conducted to analyze the significant factors affecting the products purchased and supplier selection, the marketing strategies of the suppliers and the influencers involved in product buying decision-making. The study also intends to assess the satisfaction levels of the manufacturing company on their current products and suppliers. The analysis is carried out based on new task buying and modified re-buy situations. The respondents consist of engineers with vast experiences in industrial good buying. Data is collected based on a set of self-reporting questionnaire developed and analyzed using the Statistical Package for Social Sciences (SPSS) software. One sample T-Test was used to perform mean score analysis for each of the variables while the analysis of variance (ANOVA) was used to identify a significant difference within the variables. The results from the present study indicate that in product selection, the most significant item for both new task buying and modified re-buy situations are product performance, while product test run availability is the most significant item in supplier selection for both buying situations. The most significant marketing strategies in a new task buying situation on the other hand comprise of product demonstration and test run availability, while the ability of sales representative to convince engineers of the more value provided by a new product or service is the most significant marketing strategy in a modified re-buy situation. The engineering team is dominating the influencer's role both in product and supplier selection in the two buying situations. There appears to be a high satisfaction level among the respondents in terms of the current products purchased and towards their current suppliers. As such, there is a low intention to change the current products used and their suppliers.

Keywords:

Industrial goods, purchasing decision making, industrial buyers, supplier selection, industrial marketing strategies,

INTRODUCTION

There is no doubt that the industrial sector has been contributing significantly to the economic growth of Malaysia. This is evident from the Industrial Prod uction Index (IPI) of the country which rose from 136.3 in 2006 to 144.2 in 2007. As o f July 2008, the IPI rose 1.8% year-on-year, after a...