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Rural entrepreneurship in Wales
Rural entrepreneurship in Wales

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3.2 The purchasing pathway

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Figure 15 Purchasing pathway

This diagram shows the pathway purchasers travel when making a decision about what to buy.

When making a purchase there are competitive pressures that influence us all. They may be overt, like advertising or direct promotion, or less obvious, like comments from friends and family. A ‘need’ is thus perceived and grows until the customer is ready to consider a purchase more seriously. Information is collected before a choice can be made and eventually a purchase completed. The diagram shows that the process is not complete until feedback is processed as information that can affect future choice of purchase. This feedback loop will happen each time a purchase is made.

The pathway allows for all sorts of influences – like colleagues, friends, family, previous experience and so on. Some businesses may be more susceptible to the competitive pressures and social influences than others. All of these are external to the company selling the goods or services and illustrate the need for a good up-to-date environmental scan (see Environmental scan) so that you can understand which influences are likely to affect your customers.

Larger-value buying decisions follow the same path but typically more time is spent in researching the competition and gathering data than for a low-value purchase.

Selling to a large organisation

If you are selling your products or services to a large organisation, whether it be public sector or private sector, the customer will want information about the qualities of you and your company and the product or service you offer. This process can take quite a long time and involve a number of people, even if the final decision rests with just one person. You will need to establish who the influencers are, as well as who the decision-maker is.

Though time consuming, it may be worth the investment. For example, if you are a social enterprise working on reducing waste, a service level agreement with the local authority to deliver waste reduction advice or even divert waste from landfill is likely to provide more security than continual grant applications. Note, if you want to sell into the public sector then start by looking at the Sell2Wales [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] website.

The purchasing pathway diagram also shows that the process continues after the sale has been made, as the customer evaluates their purchase. This evaluation will influence the chances of repeat purchase either positively or negatively. Do not underestimate the importance of word-of-mouth recommendations as an important aspect of launching and building the business.