Decision Making Unit (DMU)
Business decisions are usually taken collectively. A number of people may be involved in the decision-making process and not necessarily, everyone will have the same power. Someone is the most influential, whereas someone is the least. This piece of information is very useful from a supplier’s point of view.
Kotler & Armstrong (2009), call the decision making unit of a buying organisation its buying centre. In fact, Webster and Wind (1972) were first to use the terms ‘buying centre’ (Kotler & Armstrong, 2009). It includes all the individuals and units that play a role in the business purchase decision-making process. These individuals and units play any of the following five roles in the purchase decision process:
These are the people in the organisation who actually use the product and get organisational benefits from it. According to Kotler & Armstrong (2009), the users initiate the buying proposal in many cases.
These are the people who can influence the buying decision for a number of reasons. For example, a software engineer may influence an organisation’s decision to buy a new software and where to buy it from.
These are the people who have formal authority to negotiate with suppliers. They negotiate and arrange terms of purchase with the suppliers. As negotiation is a specialist area, high level employees usually play the roles of buyers.
These are the people who have the final say in the buying decision. They have the power and authority to select the final suppliers to move on with the buying process. For example, the finance manager in a company may decide which supplier to work with on the basis of how much money the supplier is asking for a particular product/service.
These are the people who control the flow of information to others. For example, a personal secretary may not allow the sales people from a supplier to have access to deciders or users. Likewise, a receptionist may play the role of a gatekeeper as he/she usually maintains telephone, email, and postal communications.
Finally, the buying centre is not fixed (Kotler & Armstrong, 2009). An organisation does not need five different people to play five different roles. One person may play more than one role. In fact, different products/services, and different buying situations will decide how big a buying centre should be.
We hope the article has helped you explore the concept of the decision making unit. You may also like reading The decision making unit for more examples and importance of the decision making unit. If you liked this article, please share it by clicking on the icons below.
The article publication date: 26 November 2016
Kotler, P., Armstrong, G., (2009) Principles of Marketing: Global Edition, 13th Edition, USA: Pearson Education
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Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.