The Sheth Model of Industrial Buyer Behaviour

Professor Jagdish N Sheth developed the Sheth model in 1973. This model, show in Fig.3.4, emphasizes the joint decision-making by two or more individuals, and the psychological aspects of the decision making individuals in the industrial buying behaviour.

The model includes three components and situational factors, which determine the choice a supplier or a brand in the buying decision making process in an organization. The differences among the individual buyers expectations (Component 1) are caused by the factors, such as (a) the background of individuals, (b) their information sources, (c) active search, (d) perceptual distortion, and (e) satisfaction with past purchases.

The background of individuals depend upon their education, role in the organization, and life style. The factor perceptual distortion means the extent to which each individual participant modifies information to make it consistent with his existing beliefs and previous experiences. It is difficult to measure perceptual distortion, although techniques such as factor analysis and perceptual mapping are available for this purpose.

In component (2), show in Fig 3.4, there are six variables which determine whether the buying decisions are autonomous (i.e.single individual) or joint (i.e.two or more individuals). According to the Sheth Model, larger the size of the organization and higher the degree of decentralization, more will be the possibilities of joint-decision making.

The component (3) in the model indicates the methods used for conflict resolution in joint-decision making process. Problem-solving and persuasion methods are used when there is an agreement about the organizational objectives. If there is no such agreement, bargaining takes place. Conflict about the style of decision making is resolved by politicking.

Situation factors can be varied like economic conditions, labour disputes, mergers ands acquisitions. The model does not explain their influence on the buying process.