Industrial buyer behavior : A study of the industrial buying behavior in Life Science organizations when faced with a radical innovation

A central part of the marketing process is to be aware of why a customer or buyer makes a purchase and without such an understanding, businesses find it hard to respond to the customer‟s needs and wants. A large part of the current literature concerned with industrial buyer behavior has tended to focus on modeling and mapping the industrial buyer behavior. However, little research has been found on how the industrial buyer behaves when faced with a radical product innovation. Therefore, the purpose of this thesis is to investigate the industrial buyer behavior of firms within the Life Science sector in Uppsala when faced with a radical product. We aim to study the process and identify possible differences from buying a non-radical product. This study will provide valuable information about industrial buyer behavior that might be useful to marketers. This thesis will be conducted by using a deductive and qualitative approach. A case study approach was used with the selected three organizations in the Life Science sector in Uppsala. Semi-structured interviews and a survey were used to gather primary data; secondary data was collected through web pages. Our findings from these three organizations show that the industrial buyer behavior is affected. Using the buy grid framework we see that the process, the steps, doesn‟t change but within the steps different actions are taken. Step 1, 4, 5 shows strong differences when confronted with a radical and a non-radical product. These differences depend on the complexity of the product and the amount of available information. This affects the level of willingness to take risks. As the complexity is seen as high in radical products and there is not sufficient information the risk of buying this type of product means taking high functional risk and high financial risk which the organizations wants to avoid. However, the decision center [decision group] becomes more complex and more individuals are involved in the decision process when faced with a radical product. The most notable factors influencing the decision center in this situation is the size of the organization, the complexity of the product, the functional and financial risk, the importance of the decision at hand, attitude, and personal experience. The supplier criterion goes from being price orientated in the case with a non-radical product towards being more supplier orientated when faced with a radical product. This study does not aim to investigate how companies should market their products and neither does it try to generalize conclusions about industrial buyer behavior. This limitation is due to the small sample used