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Decision Making Unit: this article explains Decision Making Unit (DMU), developed by Philip Kotler in a practical way. After reading you will understand the basics of this powerful marketing and stakeholder management tool. IntroductionIn a business-to business context (purchase) decisions are made collectively. Suppliers find it important to know who the most influential person in this process is. In literature the whole team of decision makers is known as the Decision Making Unit (DMU) or Buying Center. Marketing guru Philip Kotler has frequently described the Decision Making Unit (DMU) in his marketing books. Do you want unlimited ad-free access and templates? What is a Decision Making Unit (DMU)?Philip Kotler defines the decision making unit or DMU as “all individuals and groups that take part in the decision-making process relating to the negotiation of products /services”. The DMU consists of a group of people who take collective decisions about the purchasing of goods and/or services. Philip Kotler has defined six roles and he has indicated that it is possible for one person to have several roles:
1. UsersThese are the people who are actually going to work with the purchased goods or services and they exert influence on the specifications. Both customers and employees may take on this role. 2. InfluencersThey can exert influence on the purchasing process by setting preconditions. They can be found at all levels of the organization. 3. BuyersThe buyer is the actual negotiator with the supplier. The buyer negotiates about contract terms and eventually places the order. The buyer takes up one of the most important roles within the decision making unit. 4. InitiatorsThe initiator is the player who recognizes a problem and tries to find a solution for this problem. This is the most important person in the decision making unit or DMU. 5. DecidersThe Decider is the player who is ultimately responsible for choosing the supplier and as a result takes up an important position within the decision making unit or DMU. 6. GatekeepersThe Gatekeeper is responsible for the information provision within the decision making unit or DMU. The Gatekeeper determines the type of information that will be delivered to a certain player and as a consequence they can influence the decision making process strongly. Decision Making Unit (DMU): Three types of buying situationsNot every decision requires the involvement of all the roles. Simple decisions, such as the purchasing of stationery, require fewer roles in the decision making process than the purchase of production machinery or a new IT system. In addition three types of buying situations can be distinguished: 1. Straight rebuyThis involves a routine repurchase. The goods and/or services have been bought before from an established supplier. 2. Modified rebuyOne or two components are new in this purchase process; a new product and/or service or a new supplier. If the complexity is low, there will no new decision making unit is required. A new decision making unit or DMU may be created when the rebuy is more complex. 3. New buyBoth the products/services and the supplier are new. This will automatically require a new decision making unit. Decision Making Unit (DMU) is changing all the timeA DMU is rarely stable and it often changes. The DMU may change as a result of the addition of another person. Conflicts of interest may also play a major role as a consequence of which
the outcome of the decision making process becomes unpredictable. It is advisable to look at the influence, perception, roles and risks from a distance. Try us for free and get unlimited access to 1.000+ articles! It’s Your TurnWhat do you think? How do you manage your Decision Making Units? Do you recognize the practical explanation or do you have more suggestions? What are your success factors for the good stakeholder management? Share your experience and knowledge in the comments box below. More information
How to cite this article: Published on: 02/08/2011 | Last update: 02/05/2022 Add a link to this page on
your website: Which one is not a process of decisionHence, we conclude that changing the desired outcome is NOT one of the steps involved in the decision-making process.
Which of the following is a stage in the Organisational decision process?8 Important Phases of Organisational Purchasing Decision Process are as follows: 1. Phase 1: Recognition of a Problem 2. Phase 2: Description of the need 3. Phase 3: Product Specification 4.
Why is the decision making unit important?The Decision-making unit is important in B2B because it helps businesses focus on the needs of their target market, gather information about their customers, make better decisions, and save time and money. Use DMU to your advantage in order to improve your business-to-business dealings.
Which of the following is not a characteristic of business markets Mcq?The option which is not the characteristic of the Business market is option D: The high level of promotion. The business market is where items or services are sold to other businesses so that they can be used in the final product.
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