Factors Influencing Organisational Buying Decisions in the Manufacturing Industry: Are Products and Services Procurement Different?

Abstract

Abstract The paper explores factors influencing services procurement decision-making of manufacturing companies, and compares it to factors influencing products procurement decision-making. Data were gathered by survey among manufacturing companies and analysed by using exploratory factor analysis. The comparison between factors influencing services procurement and factors influencing products procurement is made by content analysis. Results prove that six distinct factors influence manufacturing companies when making services procurement decisions: interdepartmental communication, trust in service provider, service provider flexibility, buyer’s price sensitivity, top management support, and service provider competence. When compared to products procurement situation, it can be observed that some of the factors are influential in both purchasing situations, whereas other factors are not similarly important in both purchasing situations. The paper offers an insight to factors influencing buying decisions of manufacturing companies, that can help selling companies to better understand the differences in procurement processes of manufacturing companies in two buying situations: products procurement vs. services procurement.