Online Buying Behavior of Packaging Buyers in 2016

ONLINE BUYING BEHAVIOR OF PACKAGING BUYERS IN 2016

Sept. 2016

2nd annual survey of qualified packaging buyers

Online Buying Behavior of Packaging Buyers in 2016

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ACKNOWLEDGEMENTS Our current research program and this report would not be possible without the support of the Marketing and Management faculty of Fontys University of Applied Sciences in Eindhoven, Netherlands. Anthony Murphy the International Business & Management Studies team leader provided encouragement, scheduling support and funding for the research. Once again, Ms. Eveline van Zeeland-van der Holst was instrumental in improving the research methodology providing useful advice for the survey.

I’d like to thank the generous support from Ms. Lisa Pierce, Executive Editor of Packaging Digest, for her continued support, advice and feedback, which has made this research possible. Packaging Digest publishes synopsis article about this extensive report. In addition, several other publications and packaging associations also promoted the research survey, including Nerida Kelton, Executive Officer of the Australian Institute of Packaging, Helen Crowe, Manager Information Services at the Netherlands Packaging Centre, and Philip Chadwick, Editor of Packaging News (U.K.).

George Szanto

September 2016 Eindhoven, Netherlands Contact details: Email: [email protected] Telephone: (+31) 8850 86322 LinkedIn: nl.linkedin.com/in/georgeszanto Copyright © 2016 Fontys University of Applied Sciences. All Rights Reserved.

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Table of Contents

ACKNOWLEDGEMENTS .......................................................................... I

LIST OF TABLES AND FIGURES ........................................................... IV

EXECUTIVE SUMMARY ......................................................................... 1

1.0 INTRODUCTION – MOTIVATIONS, GOALS, AMBITIONS .................................................................................. 2

2.0 RESEARCH METHODS SYNOPSIS .................................................. 4

3.0 SAMPLE FRAME, SIZE AND VALIDITY ........................................... 5

4.0 CHARACTERIZING THE NATURE OF THE PURCHASE - DEMOGRAPHICS ....................................................... 8

4.1 Buyer Roles ................................................................................. 11

5.0 FINDINGS: THE EVOLUTION OF BUYERS’ BEHAVIOR .................................................................................. 13

5.1 Extending the reach of buyers ........................................................ 13 5.2 Internet usage vs buying stage ...................................................... 14 5.3 Common types of online information sought .................................... 17 5.4 Perceived impact, intent, effort, reputation, of information sources ..... 19 5.5 How online information is shared .................................................... 27 5.6 Perceived benefits of social buying ................................................. 28 5.7 Smoothness of purchase process vs online and offline factors ............ 32

6.0 DISCUSSION .............................................................................. 36

7.0 MANAGERIAL IMPLICATIONS ..................................................... 39

8.0 BIBLIOGRAPHY .......................................................................... 41

APPENDICES ...................................................................................... 43 Appendix 1: Location Map of Survey Participants ................................... 43 Appendix 2: Histogram of Length of Buying Process ............................... 44


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List of Tables and Figures

Table 1 Most Common Reasons for Not Using the Internet to Help Make a Packaging Purchase 6

Table 2 Distance Searched vs Respondent Counts ..................................... 13

Figure 1 Sample Size and Qualified Participants ......................................... 6 Figure 2 Type of Product, Service or Solutions Sought by buyers .................. 8 Figure 3 Number of People Involved in Purchase Decision ............................ 9 Figure 4 Frequency of the Purchase ......................................................... 10 Figure 5 Budget for the Purchase or Service ............................................. 11 Figure 6 Breakdown of Buyers’ Roles in Purchase Process ........................... 12 Figure 7 Distance Searched for Solutions .................................................. 13 Figure 8 Distance Searched vs Budget ..................................................... 14 Figure 9 Internet Usage During Buying Process ......................................... 15 Figure 10 Mapping of Information Source Usage vs Buying Stages ............... 16 Figure 11 Type of Information Sought by Online Buyers ............................. 18 Figure 12 Mapping of Information Content Types vs 4 Main Buyer

Roles ..................................................................................... 19 Figure 13 Summary of Combined Ratings of All Information

Sources ................................................................................. 21 Figure 14 Reputation of Online Resources vs Buyer Role ............................ 22 Figure 15 Intent Ratings vs Buyer Roles for All Types of

Information Sought Online ....................................................... 22 Figure 16 Effort Ratings of Information Sources vs Buyer Role .................... 23 Figure 17 Effort and Intent Ratings of Online Pricing Information ................. 24 Figure 18 Mapping Effort to Get Pricing Information vs Total

Spend Budget for the Purchase ................................................. 25 Figure 19 Reasons Why Buyers Found it Difficult to Find the

Needed Information Online ....................................................... 27 Figure 20 Ranking the Top 3 Methods for Sharing Online

Information ............................................................................ 28 Figure 21 Perceived Benefits of Social Media Usage for Purchasing .............. 30 Figure 22 Comparison of Social Media Benefits vs Specific Channel

Use ....................................................................................... 31 Figure 23 Rating the Smoothness of the Purchase Process .......................... 33 Figure 24 Smoothness of Buying Process vs Buying Role ............................ 34 Figure 25 Smoothness of Purchase Process vs Distance Searched ................ 35


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Table 3 Difference Between 2016 and 2015 Online Resources Used vs Buying Stages ...................................................................... 17

Table 4 Statistics for Albee Indicators for All Information Sources Combined . 20

Table 5 Ranking 7 Reasons Why it is Difficult to Find Info Online ................. 26

Table 6 Respondents Reporting No Benefits of Social Media Compared to Frequency of Buy and Distance Searched ................................. 32

Table 7 Smoothness of Buying Process vs Frequency of Buy ....................... 35

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EXECUTIVE SUMMARY

We present the results of our 2nd annual survey of the online buying behavior of packaging buyers in 2016. More than 450 people from all over the world shared their experiences about how they use (or not use) the internet to facilitate a qualified purchase in the past 12 months.

The research asked 227 qualified buyers 20 questions about the purchase that they made. Questions ranged from demographics of the buyer to ratings and rankings of information channels and published content information. This year’s key findings were:

• Forty-four percent of the buyers were using the internet to buy a packaging solution for the first time, or one that they buy infrequently (less than 1 time per year). The average purchase cycle lasted 3.9 months with a majority of purchases worth between (U.S.)$12,000 – $1.24 million.

• Most buyers still search for regional solutions within their country (49.4%), with about 35% looking internationally or globally. These numbers did not change significantly from 2015.

• When budgets exceed $125,000, a majority of buyers search internationally and globally for their solutions.

• More than 50% of the buyers use the internet to validate a supplier’s products or solutions, thereby coming up with a short-list of qualified vendors. More than 30% use the internet to make their final vendor/supplier selection.

• The utility of 15 different online information sources shows that the majority social media channels (Twitter, Facebook, Google+) are not used by buyers during their customer journeys. LinkedIn is used by 50% of the buyers.

• The most common types of information sought were product/service information, pricing, industry/competitive information, and technology primers. The demand for these sources increased by 5%, to 23%, in 2016. Peer reviews or opinions, and best practices articles or video demand decreased by 17% and 13% respectively.

• The effort it takes to locate useful information still remains high at 5.32 on a scale of 10.0. Pricing information is even harder to get, with a rating of 6.5. Lots of information remains gated. Gating information was ranked the number 1 nuisance.

• This year 63% of the buyers told us that they did not gain any benefits from using social media to help make their purchase. This is an increase over 57.7% in 2015.

• The smoothness of the overall purchasing process, including the use of the internet was rated at 6.5, on a scale of 10 (which equals extremely smooth). But more than 33% still rated the process less than 6.0


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Online Buying Behavior of Packaging Buyers in 2016 2 N D A N N U A L S U R V E Y O F Q U A L I F I E D P A C K A G I N G B U Y E R S

1.0 INTRODUCTION – MOTIVATIONS, GOALS, AMBITIONS

This is the second annual report about the online buying behavior of packaging buyers. In 2015, we initiated the research and reported the results in a similar report (Szanto 2015) and a summary publication in Packaging Digest. After positive feedback in 2015, our intentions are to turn the research into a yearly activity to service the entire packaging community (both buyers and sellers). In this report, we present our exploratory research results for our 2016 survey along with some comparisons to the results from 2015.

As far as we know, this research is unique in the world, as no other academic research focuses on this topic in such detail to the benefit of the packaging communities worldwide. Despite the role and impact of the internet, digital information technologies, and social media, on business-to-business (B2B) marketing strategies, structures, and tactics, little scholarly attention has been paid to how B2B buyers are affected by these changes (Grewal et. al, 2015), (Lilien 2016).

In 2011, the Corporate Executive Board reported that B2B buying teams now frequently delay their first interactions with sales people until they complete about 60% of their purchase process (Corporate Executive Board, 2011). Last year’s research indeed found that many buyers used the internet not only to education themselves about needs, issues, new offerings, but also to find and partially qualify short lists of potential vendors.

Nevertheless, for most higher value, non-routine purchases, the necessity and value of sales people has not disappeared in the packaging marketplace. What is changing are the expectations of buyer interactions with suppliers. Smart vendors are adapting their sales and marketing methods to changing buyer behavior, but not forcing or expecting buyers to consummate their purchases entirely online without human help or interaction. A good overview of such strategies can be found in research done by Frank Cespedes (2015). There are a multitude of applied and some academic research reports about these new vendor strategies and tactics (Schwartz, 2011); (BaseOne, 2012); (Brinkmann, 2012); (DemandGen, 2013); (Giunipero, 2013). However, there needs to


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be more research carried out about B2B buying behavior especially from the perspective and using inputs from real B2B buyers themselves (Lilien 2016).

Last year we hypothesized that one of the problems buyers faced was too much information on the internet—information overload. This year we specifically asked if this was a problem. This year we put more emphasis on the effort it takes to find, gather, process, and appreciate information found online. Our goal is to compare these new results with an earlier study we carried out that characterized how 456 packaging vendor’s information can be found and accessed online line (Szanto 2015).

The end result of this exploratory research effort should enable vendors to better service the packaging buyer’s needs, desires, and buying journey, resulting in time and effort savings by both parties. In addition vendors should be able to better manage and justify their online content production and distribution efforts and resources. This is especially important for vendors with limited resources as the number of online channels continues to grow each year.

Key Research Objectives We strived to better understand the how people use online information sources individually and as groups to make purchase decisions. Significant efforts focused on the use of social media and digital/online sharing of information for such tasks.

Our key objectives for this study were:

• To show how results should enable buying teams to benchmark their own online behaviors against similar industry practices and other competitive buying teams;

• To determine during which phases of the buying cycle are people using online sources;

• To determine what kinds of online resources are commonly used;

• To determine if there are significant differences of online behavior and social media usage by six different types of buying team members;

• To show how the results should deliver objective data reported by actual purchasers using online sources reported by themselves directly;

• To compare and contrast any differences or new behavioral patterns from the 2015 survey compared to this 2016 survey;

• To enable vendors to better optimize their online content production and distribution tactics, thereby saving themselves money and resources and improving the buying process for their valuable customers;


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• To identify additional key needs or insights about online purchasing behavior of capital goods/services in the packaging industries that act as seeds for follow-up studies in 2017.

2.0 RESEARCH METHODS SYNOPSIS The survey ran from mid-February 2016 through the end of June 2016. The survey consisted of two qualifying questions, and an additional 20 questions about the respondent’s demographic background and his/her use of the internet to facilitate a recent packaging-related purchase.

Prospective participants were recruited using methods explained below in Section 3.0. The survey was presented online as a serious of web pages. Participants could move forward and backward through the survey questions. The following types of questions were used to collect information:

• Open text answers (including comments) • Multiple choice (single answer from a group of options) • Multiple answer (from a group of options) • Ranking (ordering) • Numerical ranking (forced assignment of a 100 point scale) • Ratings (assigning values from 1.0 – 10.0)

Some questions required answers to continue, while others did not. The survey questions were formulated by the authors with input from the sponsors and academic colleagues. Initial draft questions were tested on 10 volunteers recruited within the industry. The entire survey was estimated to take about 15 to 20 minutes to fill out. The survey was only offered in the English language. Since we sought and got input from around the world (see Appendix 1), there could be some bias in the results due to language difficulties. Once the survey was closed in July 2015, data processing began using built-in functions in the survey tool, IBMS SPSS Statistics1, Tableau Desktop and Microsoft Excel.

1 Statistical Package for the Social Sciences


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3.0 SAMPLE FRAME, SIZE AND VALIDITY The sample frame for the survey consists of all people working in the packaging industries worldwide who could be reached via digital means. However, the survey target population focused on people who actually bought some kind of packaging product, service or solution in the past 12 months (with the 12 month time frame relative to the day the survey was filled in). In addition, the purchase process needed to include the internet in some way or means.

The packaging industry is characterized by four different types of members:

• Influencers: external parties such as press or trade associations • Suppliers of services or materials • Packaging Process Owners (Manufacturers of Goods or Contract Packagers) • End consumers of packaged goods (B2C and B2B)

There are many names, terms, and definitions possible for the multitude of people who are involved with the entire packaging process. The target population for the study focused on people who work for a manufacturer of goods or a contract manufacturer. However, it is entirely possible that a few respondents came from the suppliers part of the ecosystem. The reason that there could be respondents from the suppliers part of the ecosystem stems from the fact that many times designers, engineers, process experts also look in the packaging industry for components, subassemblies, expertise, inspiration or other companies to partner with to provide a packaging solution.

The Frame Population for the study consisted of all of the potential buyers we could reach via one of these three methods:

• Direct personal emails sent to subscribers of our sponsors (+250K) • Promotional webpage postings and newsletter postings by collaborators • Personal promotion via targeted LinkedIn groups and certain key Twitter

Association accounts and key influencers in the industry.

Thus, any person who received the promotional email, saw the articles or banners advertising the survey, or received notice indirectly via LinkedIn or Twitter was a potential candidate for the survey.

The Sample was not actively selected from the frame population, as participation was voluntary. Figure 1 recaps the sample size and actual final number of Qualified Respondents. In total, 500 people started the survey. We determined the locations of 493 of these participants. They came from 21 different countries with the USA representing 417 of the participants (84.6%) and 76 from the other 20 countries (15.4%). See Appendix 1 for a map of all of the countries. These 500 people were asked two qualifying questions.


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1. Were you involved in the purchase of a business-to-business (B2B) packaging solution, product, or service the past 12 months?

2. During the purchase process in the past 12 months, did you use any online internet information sources or online services (such as Google search, LinkedIn, or social media) to help you with the purchase?

Four hundred fifty four people answered question 1. From this population, 188 were not involved in a purchase the past 12 months and thus were disqualified. This left 265 people who were asked question 2. Of this group, 263 answered question 2 with 39 people saying they did not use the internet to support their purchase or they did not answer the question. Thus, in total, 227 (188+39) of the 453 people who answered the qualifying questions were disqualified.

This year, we asked the 227 disqualified respondents to tell us why they did not use the internet to help them make a packaging solutions purchase. Forty five people answered one or more of the eight possible reasons we offered, as shown in Table 1. The most common reasons were repeat purchases where they buyer contacted the vendor directly, or that personal networks were used to find the packaging solutions or information desired.

Reason Internet Was Not Used to Support Purchase (N=45) (more than 1 answer was possible) Count It was a rebuy (repeated purchase) and I directly contacted the supplier to make the purchase 9 I used my own personal network to find the information or suppliers I needed 8 I was part of a buying team but not responsible for information collection - thus other people gave me all of the information 7 I collected all of my purchasing information from printed resources, trade shows, and visits by vendor sales people 7 It was a "rebuy" (repeated purchase) thus I had all of the information I needed to make the purchase 6 I used an internal company database to find the necessary information or supplier(s) 5 Other - Write In 2 I don't trust information found online, thus I only work via telephone or face to face with suppliers 1

TABLE 1 MOST COMMON REASONS FOR NOT USING THE INTERNET TO HELP MAKE A PACKAGING PURCHASE

FIGURE 2 SAMPLE SIZE AND QUALIFIED PARTICIPANTS

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FIGURE 1 DROP-OFFS OF SURVEY PARTICIPANTS


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This year we had 265 people who bought a packaging solution within the past 12 months. Of this total, 39 (14%) told us that they didn’t use the internet during the purchasing process. This is a lot lower than the 2015 survey when 116 (43.4%) of the 267 participants didn’t use the internet. So it appears that this year’s respondents were more active online.

This year, our qualified sample size grew to 227 participants, with 157 people finishing the entire survey and 70 people who did not finish the entire survey. This represents a growth in participants of about 45% over 2015.

Validity:

Checking the validity of the year’s data is difficult. To help improve response rates and reduce surveys with partial answers, we made the 2016 survey three questions shorter. We eliminated three demographic questions that could have been used to measure our population against a qualified reader database from Packaging Digest. Thus, we don’t have any indirect proofs that the respondents to the 2016 survey are truly representative of the packaging buyers in the industry. We can only conclude that our sample was recruited from qualified, and semi-qualified sources. Cheating on the survey (such as taking it more than once) was limited by IP locking and other online means to eliminate duplicate responses.


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4.0 CHARACTERIZING THE NATURE OF THE PURCHASE - DEMOGRAPHICS

The survey asked six demographic questions to help characterize the population and the nature of the purchase. These characteristics are used in Section 5 of the report to explore how demographic variables may moderate buying behavior.

The first demographic variable asked what kind of product or service or packaging solutions did the buyer(s) seek. There were six choices, as shown in Figure 2. Respondents were allowed to pick more than one answer; thus, the 217 respondents indicated 398 different choices in the figure. A majority were looking for packaging materials (147), and many sought packaging equipment or machines (90). The write-in “other” category included answers like design services (3) and testing equipment (3). The only significant differences in 2016 versus 2015 were less people bought materials/containers/supplies (-5%) and more people sought equipment/machinery (+7%). The average length of the buying process was 3.9 months, with a standard deviation of 3.5. The histogram of the length of the purchase process for 152 buyers can be found in Appendix 2.

FIGURE 2 TYPE OF PRODUCT, SERVICE OR SOLUTIONS SOUGHT BY BUYERS

Next, we consider the effect of the number of persons involved in the purchasing decision. There were five possible answers as shown in Figure 3, ranging from only the respondent to more than 12 other people. Of the 213 people answering this question, most of the buys (113) involved two to five other people. Compared to 2015, the only significant change was the “2-5 other people” group declined by 8.4% in 2016 (53.1% versus 61.4%), with small increases in the other four categories.

147

90

55

51

48

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0 20 40 60 80 100 120 140 160

Packaging materials / containers / supplies

Packaging equipment / machinery

Automation / controls / related components

Contracted (external) packaging services / solutionsprovider (out sourcing)

Packaging consulting services (includingengineering, packaging design)

Other - Write In (Required)

Number of Responses (more than 1 answer / respondent possible)

Type of Product or Solutions Sought (N=217)

Count


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FIGURE 3 NUMBER OF PEOPLE INVOLVED IN PURCHASE DECISION

The need and propensity of using online resources may be influenced by how often the product or solution is sought. Perhaps people may behave different if they are buying something for the first time, or infrequently versus something they buy more routinely. We defined four frequency periods as shown in Figure 4: first time; less than once a year; 1–2 times a year; and repeat buy numerous times per year. The number of first time buyers was small (17), but the number of buyers purchasing infrequently (51) or 1-2 times per year (56) made up the majority of our sample populations. The demographic is significantly different in 2016 versus 2015, when in the latter year almost 45% of the buyers were making frequent rebuys.

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FIGURE 4 FREQUENCY OF THE PURCHASE

We also explored the influence of the size of the budget on online behavior. There were six possible budget categories ranging from unknown to more than $6M (USD) as shown in Figure 5. Of the 157 responses, most budgets were for less than $1M or unknown, but 12 people indicated budgets exceeding $1.25M. We also expect that the 2016 data is more representative than the 2015 data, as our sample grew by 26 responses in the $12K to $1.25M range in 2016.

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1st timeever

Infrequentlyless than1x / year

Yearly (1 - 2 times/year)

Repeat Buyseveral /many

times / yr.

How Often Do You Buy This Kind of Product, Service Solution (N=155)

2016 survey

2015 survey


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FIGURE 5 BUDGET FOR THE PURCHASE OR SERVICE

4.1 Buyer Roles Many business buyer behavior research studies commonly segment buyers into several buyer roles, see for example (Frederick C. Webster, April 1972), (Kreutzer, 2010, p. 32), (Kotler, 2012, pp. 188-189).

We asked respondents what their primary buyer role was in the decision-making process for the purchase considered in the survey. There were six possible choices as shown in Figure 6. The roles were further clarified with the text shown here below in parenthesis. Respondents were required to pick one choice.

• Initiator (requesting the purchase for 1st time)

• Gatekeeper (controlling information)

• Influencer (internal or external expert, stakeholder)

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Unknown or there was no budget

Less than $12,000 (USD)

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(USD)

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$1.25M - $6M (USD)

Greater than $6M (USD)

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The Total Budget for the Product(s) or Service(s) Purchased (N=157 for yr. 2016)

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• User (using the purchased product or service)

• Decider (budget owner, having final decision authority to approve purchase)

• Buyer (being formal authority to arrange purchase, purchasing agent)

Interesting although the 2016 sample was larger than in 2015, as a percentage the top three buyer roles are almost the same percentage.

FIGURE 6 BREAKDOWN OF BUYERS’ ROLES IN PURCHASE PROCESS

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5.0 FINDINGS: THE EVOLUTION OF BUYERS’ BEHAVIOR

5.1 Extending the reach of buyers We asked people how far from their work location did they search for a solution or vendor for their packaging need. The internet has enabled even small buyers to search for solutions or vendors easily, quickly, conveniently and rather inexpensively worldwide. About one third of the respondents (35.7%) searched outside their own country as shown in Figure 7 and Table 2. These numbers are almost similar to the 2015 survey. The local searched in 2015 were 18%, regional 48%, international 21%, and global, 13%.

FIGURE 7 DISTANCE SEARCHED FOR SOLUTIONS

Value Count Percent Locally (within 100 miles / 150 km ) 23 14.9%

Regionally (within my own country) 76 49.4%

Internationally - but only some selected countries

33 21.4%

Globally - the country did not matter 22 14.3%

TABLE 2 DISTANCE SEARCHED VS RESPONDENT COUNTS

14,9%

49,4%

21,4%

14,3%

How Far Did You Look For Possible Vendors or Suppliers (N=154)

Locally within 100 miles / 150 km

Regionally within my own country

Internationally - but only someselected countriesGlobally - the country did notmatter


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We also looked at how the searched distance was related to the budget for the project. Figure 8 shows that for budgets less than $125,000 most buyers look for domestic solutions or suppliers, with only about 25% looking outside their country. For larger budgets between $125,000 and $6M, more and more people look outside their country for suppliers or solutions. However, please note that the sample size for $1.25M and above is small, only 12 respondents.

FIGURE 8 DISTANCE SEARCHED VS BUDGET

5.2 Internet usage vs buying stage We identified four main phases or buying stages that people go through when purchasing a packaging solution or service.

• Identifying and defining the packaging need • Identifying appropriate suppliers or vendors • Validating suppliers and solutions (short listing) • Final vendor / supplier selection

These stages are independent of whether or not the internet is used to facilitate the purchase. Respondents were asked in which of the stages they used online resources for help. Note respondents could pick more than one stage. The results show in Figure 9 that most people look online for identifying appropriate suppliers or vendors (79.6%),

70,8% 75,9% 76,9%

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Unknown orthere was

no budget (24)

Less than$12,000 (29)

$12,000 -$124,999 (52)

$125,000 -1.24M (36)

$1.25M -$6M (8)

Greater than$6M (4)

How Far People Searched vs Budget (N=153)Domestic 2016

International/Global 2016


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followed by identifying and defining the packaging need (59.2%). Compared to the 2015 survey, there are only two small changes, namely fewer people used the internet for identifying vendors, and a more used it for validating suppliers and solutions. The “other” comments included: “price checking; review prices; researching design compared to competitors.”

FIGURE 9 INTERNET USAGE DURING BUYING PROCESS

A second question related to the one above, explored specific kinds of online and offline information sought during the four buying stages. There were 15 different information sources suggested. Respondents were asked to map each source into the one buying stage step where they felt it was the most useful. If they did not use the information source, then they could mark it as “not used.”

The results for the 15 most used sources are shown in Figure 10. The information sources were sorted by the frequency by which they are not used starting from low values to high values. Thus, from the 177 buyers, 4% said they did not use a supplier website in any of the buying stages and 86% said that they did not use Twitter. The distribution of information

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NOTE: more than 1 answer was possible

Internet Usage vs. Buying Stage (N=201)

Activity

Percent 2016

Percent 2015

Over 50% of the buyers use the internet

to validate supplier’s products or solutions,

thereby coming up with a short-list of possible vendors


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sources used for identifying and defining the need is quite broad, as most buyers use various sources ranging around 15% to 20%. For identifying appropriate suppliers and vendors, webs searches, supplier websites, emails from suppliers and relying on friends or colleagues are the most often used means (all above 30%).

FIGURE 10 MAPPING OF INFORMATION SOURCE USAGE VS BUYING STAGES

We compared the data from Figure 10 to the results of the same question from the 2015 survey. The changes in behavior are shown in Table 3 below. Increased usages are shown by positive numbers, and decreased usages are shown by negative numbers. The 2016 sample size was 33% larger (177 vs 133) thus perhaps was more representative.

4% 4%

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38%45% 47% 48% 50% 50% 54% 58%

75%80%

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08%

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00%

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Utility of Information Sources vs Buying Stages (N=177)

Final vendorselection

Validatingsuppliers andsolutions(short listing)

Identifyingappropriatesuppliers orvendors

Identifyingand definingthe need

Not Used


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There are several changes which merit comment. First, the use of press articles in trade journals, trade associations, online communities, blogs, and offline events all declined by 10% or more in 2016. More people this year used supplier’s websites for identifying and defining their packaging need(s). However, in the next step, to identify appropriate suppliers, the number of people trusting supplier’s websites seem to have decreased by 13.2%. Also trade associations were used less for identifying appropriate suppliers—down 9.3%. Finally, we see from the 4th column that all of the information sources except the suppliers’ website and Google+, were used less for actually validating suppliers and solutions (short listing).

Name of Information Source Not Used

Identifying and

defining the need

Identifying appropriate suppliers or

vendors

Validating suppliers

and solutions

(short listing)

Final vendor

selection

Supplier Website 2.3% 8.3% -13.2% 0.7% 1.8% Internet Web searches 1.5% 1.3% -1.0% -5.5% 3.7%

Recommendation / Advice from colleague or friend 0.4% 0.8% 1.1% -7.2% 4.8%

Supplier email 0.0% 1.4% 1.5% -6.7% 3.9% Press Article (trade journal) 11.2% -2.6% -4.6% -4.8% 0.9%

Online video / webinar 6.7% 0.4% -1.5% -7.3% 1.6% Industry intermediaries (e.g. packaging

trade association) 14.5% -0.7% -9.3% -4.0% -0.5% Press Advertising 9.3% -4.0% -1.5% -5.2% 1.5%

Industry specific forum or online community (e.g. Linkedin) 11.6% -1.0% -3.7% -10.2% 3.3%

White Paper / Case study 6.9% 3.7% -6.4% -4.2% 0.0% Offline event or seminar 10.5% -2.8% -1.3% -9.8% 3.3%

Google+ -4.5% 2.9% -5.2% 4.5% 2.5% Blog(s) 13.0% -5.1% -2.5% -6.1% 0.9%

Facebook 1.2% 3.5% -5.2% -2.6% 3.0% Twitter 2.8% 2.6% -3.5% -3.5% 1.5%

TABLE 3 DIFFERENCE BETWEEN 2016 AND 2015 ONLINE RESOURCES USED VS BUYING STAGES

5.3 Common types of online information sought After asking the types of online and offline channels and sources people use to search for information content supporting their purchase, we wanted to know what kinds of typical information people were looking for. We suggested nine different kinds of information, and an “other” selection, and the option to mark “none of these.” Respondents were allowed to mark more than one kind of information they sought. The results are shown in Figure 11. Not surprising, product and pricing information were most commonly sought. Later, below in Section 5.4 we will comment on the effort it


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took to get the information and the intent and reputation of these different kinds of information.

Again we compared the types of information sought online between this year and 2015. The sample size was bigger in 2016 (176 vs 117) so we made the comparisons based on percentages. The major changes in values are shown by the numbers in parenthesis in the yellow rectangles. The biggest changes are 23% more people searched for technology primers and “how-to” information sources. Noteworthy, 17% less people searched for a peer review or opinion.

FIGURE 11 TYPE OF INFORMATION SOUGHT BY ONLINE BUYERS

For the top seven types of information content sought by buyers, we wanted to know which of the most common buyer roles looked for these kinds of information. In Figure 12, these relationships are shown. The main observation from Figure 12 involves the behavior of Deciders versus the other three roles. About 35% of the Deciders did not look for price information, while for all other roles this was higher. Perhaps Deciders

89.4% (+15)

71.8% (+5)

57,1%

41.8% (+23)

32,4%

26.5% (- 17)

24.1% (-13)

13.5% (-10)

7,6%

3,5%

0,6%

152

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Product information of a packaging solution /product / service

Pricing information

Industry / competitive comparison

Technology primer / "how to's"

Customer testimonial / case study

Peer review or opinion

Best practices article or video

Report by an external industry analyst

Interview with opinion leader / former

Other - Write In

None of these types of information

NOTE: more than 1 answer was possible

Types of Information Sought Online (N=176)

% Year 2016

Count Year 2016

Count Year 2015


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don’t need to look for pricing information, as they may be given the data by other members of extended buying teams. Furthermore, more Deciders look for industry competitive or comparison information (73%) than all of the other roles.

FIGURE 12 MAPPING OF INFORMATION CONTENT TYPES VS 4 MAIN BUYER ROLES

5.4 Perceived impact, intent, effort, reputation, of information sources

Based on the work of Albee (2010), respondents were asked to rate the specific types of information content sources that they indicated that they used in Section 5.3. We report on nine different kinds of information content used by respondents. We explored four specific kinds of metrics to rate the utility, quality, trust and ease of use of the various types of information collected by respondents during their purchasing process. These four metrics were: impact, effort, reputation and intent. To further clarify these metrics, respondents were shown two to four phrases that helped clarify or define the metric. The phrases are reviewed in the next paragraph below. Ratings were done using a sliding scale between 0.0 and 10.0, with 1 decimal point accuracy. The extremes of the scale were labeled with descriptive terms related to the metric (see below). Upon presentation, each measurement started off at a default neutral position in the middle of the scale, having a value of 5.0.

86% 86% 97% 100% 90%

68%68% 65% 90% 71%

50%

56% 73%68% 59%

36%

48% 43% 42% 43%

9%40% 32% 37% 31%

18% 29%30% 26% 26%

23% 19% 35% 32% 25%

Initiator (22)

Influencer (63)

Decider (37)

Buyer (19)

All BuyerRoles

(167)

Perc

enta

ge o

f Spe

cific

Buy

er R

oles

Se

ekin

g Di

ffere

nt K

inds

of I

nfor

mat

ion

Name of Buyer Role

Top 7 kinds of Information Sought vs 4 Main Buyer Roles (N=167)

Best practices article orvideo Column %

Peer review or opinionColumn %

Customer testimonial / casestudy Column %

Technology primer / "howto's" Column %

Industry / competitivecomparison Column %

Pricing information Column%

Product information of apackaging solution /product / service Column %


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The following definitions or clarifications were given for the four metrics:

Impact:

• simplifies a complex issue and resulting payoff, • provides alternative strategic choices, • shows future benefits leading to growth.

Impact scaling terminology: 0.0 = No Impact at All; 10.0 = Lots of Impact

Effort: • easy to access promised information, • no barrier or hurdles to get information.

Effort scaling terminology: 0.0=Little Effort-easy; 10.0 = Lots of efforts-difficult

Reputation: • instills confidence, • comes from a peer referral, • trustworthiness of author(s) or source.

Reputation scaling terminology: 0.0 =Misleading/Doubtful; 10.0= Impressive/Certain

Intent: • focuses on providing insights and education, • shares valuable information with little marketing "fluff", • demonstrates that it will solve a business problem, • does not request anything from you beyond your attention.

Intent scaling terminology: 0.0 =Vague/Unclear; 10.0= Supportive of me

First the combined ratings of all nine information sources are presented. The term “All” means that the buyer should consider all of the different kinds of online resources they sought out and used. The results are shown in Table 4 and the box plots shown in Figure 13.

We see that overall the average ratings are reasonably positive, except the “effort” rating. When considering 1 standard deviation, all of the ratings except the “effort” rating are above 5.5. On the following pages, we map the four Albee indicators against various demographic variables such as budget, distance searched and buyer roles.

Descriptive Statistics N Mean Std.

Deviation Variance Impact Summary Across All Info Sources 128 7.12 1.55 2.42 Effort Summary Across All Info Sources 159 5.32 2.42 5.90 Reputation Summary Across All Info Sources 134 7.03 1.56 2.45 Intent Summary Across All Info Sources 128 7.05 1.57 2.50

TABLE 4 STATISTICS FOR ALBEE INDICATORS FOR ALL INFORMATION SOURCES COMBINED


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Relative to last year, the Albee indicators for all information sources don’t vary a lot. The “effort” indicator has gotten worse, by 1.24 points on the 10 point scale. Thus, it appears that this year’s buyers found it more difficult to use the internet to find and source their needs compared to 2015.

We looked at the influence of the six different buyer roles defined in Section 4.1 against the different Albee indicators. Specifically, we investigated if there were differences in opinion about the reputation, intent of the information found on the internet, and the effort it took to find all of the information.

In Figure 14, we see that there are some differences between the roles when considering the reputation of the online information. Buyers and Deciders are quite in agreement, but Influencers are less positive by about 1.0 (6.5 vs 7.5). Initiators show the largest variance, ranging from about 5.7 to 9.0 for the bottom and top quartiles.

The intent ratings of the online information are shown in Figure 15. A vast majority of the respondents report that the intent of the online resources were supportive, with the means scores all above 6.7. The Buyer role showed the most variance, but we note that the sample was quite small (19) to draw any significant conclusions. All of the roles except the Influencer showed that the limit of the upper quartile was at 8.0, which is quite good.

FIGURE 13 SUMMARY OF COMBINED RATINGS OF ALL INFORMATION SOURCES


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FIGURE 14 REPUTATION OF ONLINE RESOURCES VS BUYER ROLE

FIGURE 15 INTENT RATINGS VS BUYER ROLES FOR ALL TYPES OF INFORMATION

SOUGHT ONLINE

Buyer Role

All BuyerRoles

Influencer Decider Buyer Initiator User Gatekeeper0

1

2

3

4

5

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7

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ALL

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Buyer Decider Gatekeeper Influencer Initiator User0

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We asked the different kinds of buyers to rate how hard (effort) it was to find all of the information they needed and specific kinds of information they sought as shown Figures 11 and 12. Figure 16 shows that the mean values across the different roles are all under 6.0 except the Buyer role, with the average being 5.08. In 2015, the average was 4.1 for all roles.

FIGURE 16 EFFORT RATINGS OF INFORMATION SOURCES VS BUYER ROLE

There is a significant difference in the mean values, for example, between the Buyers and the Gatekeeper roles. One explanation of this difference could be the type(s) of information sought by these two different roles is, of fundamental nature, different. The Gatekeepers may be looking for more comparative and peer review data and hard

Buyer Role

All BuyerRoles

Buyer Decider Gatekeeper Influencer Initiator User0

1

2

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4

5

6

7

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ALL

5,20

6,10

5,58

4,33

5,10

4,63 4,68

Lot

/ ha

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Eas

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evidence that the purchase is best practice. Whereas the Buyers may look for specifications, prices, guarantees, and terms and conditions.

Numerous participants in the 2015 survey complained that it was too hard to get pricing information online for their needs. So in this year’s survey, we specifically asked buyers to rate the effort needed to find pricing information online, and the intent of the pricing information (given the definitions above).

In Figure 17, the bar graphs shows that pricing information is more of a challenge to source than the quality of the intent of that information (note: the rating scales were opposite for these two measures, with high numbers positive for intent, and low numbers positive for effort).

We wanted to check if the total spend budget was related to the difficulty in getting prices. Thus, Figure 18 maps the effort ratings for getting pricing information against five ranges of budgets and an “unknown budget” option. We see that the three lowest ranges with a reasonable sample (48, 70 50 answers respectively), the difficulty of getting the pricing information increases from 6.2 to 7.1 The biggest budgets, those with expenditures of $1.25 to $6.0M are the most difficult to source prices, but the sample for this data point is small, only 10 responses.

Lastly, this year we wanted to know from the buyers why they may have found it difficult to find information online that they needed. We suggested six reasons shown below and the option of “other,” so respondents could fill in a textual answer telling us why it was difficult. The options were:

• Supplier "gated" information (required registration) • Supplier's online information was unclear, poor • Hard to find appropriate suppliers online • Website of suppliers too difficult to use • Too much information online (I got overwhelmed) • Not available in my native language, or one I am fluent in • Other reason (can you tell us what this reason was by using the comment box

below?)

Respondents were asked to divide 100 points amongst these options, and were forced to divide all of the points. The results are shown in Table 5 and Figure 19. The number one reason given (94 people) was supplier “gated” information, with respondents giving this reason an average 26.67 points, but we note that this reason also had the largest

Pricing Info Intent pricing informationonline Effort

0

1

2

3

4

5

6

7

8

9

10

Val

7,1

6,5

FIGURE 17 EFFORT AND INTENT RATINGS OF ONLINE PRICING INFORMATION


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standard deviation, 23.11. Obviously this reason was not a problem for many buyers, but for the ones who didn’t want to register or were in a hurry it was significant.

FIGURE 18 MAPPING EFFORT TO GET PRICING INFORMATION VS TOTAL SPEND

BUDGET FOR THE PURCHASE

The 2nd ranked problem was supplier’s online information was unclear, poor, with 92 people giving this an average of 22.84 points with a standard deviation of 16.36. Thus, different kinds of buyers worldwide have large differences in the perception of the quality of the information posted. This is not surprising as the nature of the buys varies a lot within this survey from simple small-budget rebuys to major new acquisitions.

The 3rd highest ranked reason was it was simply hard to find suppliers online. For this reason, 90 people gave this an average of 20.98 points but again with a standard deviation of 16.36. So it appears that for some buyers it is easy to find vendors online and for some others it is difficult.

Budget for Purchase (N=208)

Unknown(22)

< $12,000(48)

$12,000 -$124,999

(70)

$125,000 -1.24M(50)

$1.25M - $6M(10)

>$6M(8)

0

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Next year we will strive to characterize the seven reasons against demographics, describing the nature of the buy and characteristics of the buyers themselves.

Reason #Responses Average StdDev Supplier "gated" information (required registration) 94 26.67 23.11 Supplier's online information was unclear, poor 92 22.84 16.36 Hard to find appropriate suppliers online 90 20.98 18.3 Website of suppliers too difficult to use 89 12.9 9.83 Too much information online (I got overwhelmed) 86 13.99 13.96 Not available in my native language, or one I am fluent in 79 3.38 6.77 Other reason (can you tell us what this reason was by using the comment box below?) 61 13.69 23.81

TABLE 5 RANKING 7 REASONS WHY IT IS DIFFICULT TO FIND INFO ONLINE


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FIGURE 19 REASONS WHY BUYERS FOUND IT DIFFICULT TO FIND THE NEEDED INFORMATION ONLINE

There was an option for buyers to write in comments about why they found the information collection process difficult. Here are some of the common reasons:

• Difficult to get proper technical information (4) • Didn’t really know what we were looking for and websites didn’t help (2) • Deliberate attempt to mislead or hide information (2) • Slow responses to online inquiries (2)

5.5 How online information is shared We asked people to tell us how they may have shared information that they collected online with colleagues. There were six possible methods ranging from verbally to not

26,67

22,84

20,98

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50 55 60 65 70 75 80 85 90 95 100

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Number of People Reporting A Particular Kind of Hinderance(Size of Bubble Indicates Average Points Assigned to Hinderance)

Reasons Why It Is Difficult to Find Info Online (N=162 )

Supplier "gated" information (required registration)

Supplier's online information was unclear, poor

Hard to find appropriate suppliers online

Website of suppliers too difficult to use

Too much information online (I got overwhelmed)

Not available in my native language, or one I am fluent in

Other reason ( can you tell us what this reason was by using thecomment box below?)


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sharing it at all as shown in Figure 20. From the six possible sharing choices, we asked people to rank the top three methods they used.

This year’s results are quite the same as last year. Only the 1st and 2nd ranked choices changed positions. This year, most buyers shared the collected information using email, followed by verbal communications and finally paper printouts.

FIGURE 3 RANKING THE TOP 3 METHODS FOR SHARING ONLINE INFORMATION

5.6 Perceived benefits of social buying This year, we again asked people about the perceived and actual benefits that they gained when using online social media information sources. The results are compared to answers from 2015 as well. We asked people to rank the four propositions show here below using a 4-point Likert scale (Strongly disagree; disagree; agree; strongly agree) with and additional 5th option of I don’t know.

The four propositions were:

1. Supplier research on social media networks helped me to widen or strengthen my knowledge/expertise about a specific packaging supplier/product.

2. Social media channels helped me to speed up the process of information transfer to other colleagues in the buying team and have advantages over other offline sources.

3. Me and my supplier-counterpart keep each other informed about events or changes that may affect the other party via social media platforms.

35,4%

31,8%

15,4%

8,2%7,1% 2,1%

Top 3 Ways to Share Information Collected Online (N=160)

Attaching file/link and sending byemail

Verbally (face to face or bytelephone/video call)

Providing paper print-outs

Publishing collected informationon our own company intranetpageI did not share any informationwith other buying team members

Through social media channelsTotal Responses Ranking Top 3 Methods: 389


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4. I have not derived any benefits from social media in making purchasing decisions

for my organization.

The results are show in Figure 21. Question 4 acts as a reflective control question, which is all inclusive to specific benefits that could be derived from using social media in purchasing decision.

Let’s start with the first question. In 2016, less people were able to learn useful information about suppliers and their solutions using social media channels. Also, this year’s sample was about 50% larger than in 2015. The number of people who strongly agree about this question in 2016 dropped to 10.4% from 18.0%, and those who agreed to 31.8% from 32.4%. So overall there was a decline in the appreciation of social media usage for interacting with suppliers by 8.2% (18%+32.4%-10.4%-31.8%).

The results of the second and third questions are about the same for 2016 versus 2015. Using social media to speed up the exchange of information with vendors only went up positively by 0.2% in 2016. There was only a slight drop of 6.7% in 2016 for people agreeing or strongly agreeing that they used social media to keep informed about event or changes with their suppliers. Thus, not any big changes here.

The last question explored the overall utility of social media for the buying process. Here there are some changes between 2016 and 2015. Five percent more people in 2016 strongly agree that they did not get any benefits for their buy. The number of people agreeing with the statement remained almost the same at 29.2%. Thus, 63% of the respondents in 2016 did not gain any benefits from social media for their purchase versus 57.7% in 2015. However, on the opposite extreme, the number of people who found social media useful (strongly agree) grew to 13.6% from 12.4%. So there appears to be increases in opinion at both extremes when answering this question.

This year, 63% of the buyers told us that they did not gain any benefits from using social media to help make their purchase


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FIGURE 21 PERCEIVED BENEFITS OF SOCIAL MEDIA USAGE FOR PURCHASING

We looked at the answers in Figure 21 relative to specific types of social media that people could use. We also compared the data in Figure 21 to how frequently people bought the product or services they were seeking and whether distance searched from home had any affect.

In Figure 22, we see that this year more people did not use social media to pursue their purchases. The height of each bar represents the total number of people who responded about the use of one of the 4 particular social media channels (LinkIn, Facebook, Twitter, and Google+). From these totals, the lighter colored parts of each bar (orange and pink for years 2016 and 2015 respectively), represent the number of people who said that they gained no benefit from the particular social media channel during their packaging purchase. The absolute numbers are shown for each year, but

15,6% 19,0% 20,9%13,6%

29,2%32,7% 25,5%

16,9%

31,8%26,1%

26,1%

29,2%

10,4% 9,2%13,1% 33,8%

13,0% 13,1% 14,4%6,5%

14,4% 18,2% 17,4%12,4%

19,8%

30,0%24,8%

29,9%

32,4%

29,1%

25,7%30,9%

18,0%6,4%

20,2% 26,8%

15,3% 16,4% 11,9% 14,4%

0%

10%

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30%

40%

50%

60%

70%

80%

90%

100%

Supplier research widen or

strengthen 2016 …

Year 2015 Speed up the process of

information transfer 2016

…

Year 2015 Keep each other

informed 2016 …

Year 2015 No derived any benefits

2016 …

Year 2015

Benefits of Using Social Media(N=154 in 2016; N=109 in 2015))

Don't know Strongly agree Agree Disagree Strongly diagree


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when taken as percentages, the increases are 6%, 7%, 10% and 9% respectively for LinkedIn, Facebook, Twitter and Google+ in 2016 over 2015.

In Table 6, we see that frequency of the purchase does not influence the use of social media too much with no pattern. However, there is a significant difference between people who searched for the solution more locally versus people who searched internationally or globally, with the difference being about 15% less people using social media if they searched far away.

FIGURE 22 COMPARISON OF SOCIAL MEDIA BENEFITS VS SPECIFIC CHANNEL USE

51

25

74

46

79

4655

35

0

20

40

60

80

100

120

140

Linkedin(80)2016

Linkedin(43)2015

Facebook(123)2016

Facebook(87)2015

Twitter(132)2016

Twitter(92)2015

Google+(89)2016

Google+(69)2015

Coun

t of R

espo

nses

Name of Social Chanel Not Used

No Benefits of Social Media vs Specific Channels

2016 data vs 2015


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Frequency of Purchase

This was the first time ever

Infrequently (less than 1 time per year)

Yearly (1 - 2 times per year)

Repeat buy several/many times per

year (such as production procurement)

% No Benefit 55.6% 64.7% 66.1% 58.1%

Distance Searched

Locally (within 100 miles / 150 km )

Regionally (within my own country)

Internationally - but only some selected

countries

Globally - the country did not matter

% No Benefit 58.3% 57.1% 72.7% 71.4%

TABLE 6 RESPONDENTS REPORTING NO BENEFITS OF SOCIAL MEDIA COMPARED TO FREQUENCY OF BUY AND DISTANCE SEARCHED

5.7 Smoothness of purchase process vs online and offline factors

We investigated the smoothness of the purchasing process by asking how people perceived or experienced working together with colleagues and/or external advisors or suppliers. The overall rating of the smoothness of the process is shown in Figure 23. Ratings ranged from 0.0 which represented very difficult or not smooth at all to 10.0 which represented very smooth. A little more than 33% of the respondents rated the experience less than 6.0. In the 2015 survey, a little more than 25% of the respondents rated the process less than 6.0. The mean and standard deviation in 2015 was similar to this year 6.82 and 1.998, respectively.

It remains a challenge for buyers to smoothly complete their purchases when using the internet as a resource. One third rate the process less than 6 on a scale of 10.


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FIGURE 23 RATING THE SMOOTHNESS OF THE PURCHASE PROCESS

The smoothness of the purchase process was also investigated using these three demographic variables:

• Buyer roles • First time /infrequent buy versus yearly/repeat buys • Distance searched from current location (four distances)

The results of the smoothness versus buyer roles are shown in Figure 24. Since the sample was quite limited, we can only make some cautionary remarks. The Influencers and Deciders both rated the process with means and medians above 6.0, but the Deciders show a larger variance. For the small samples of the other roles, we see that the Users, Gatekeepers and Buyers are least satisfied with means just above 6.0. Not surprising, the Initiators are most satisfied, perhaps because they simply start the buying process, and then remove themselves.

0 0 0

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Rating 1.0 = not smooth; 10.0 = extremly smooth

Histogram of Smoothness of Purchasing Process N=127 Mean =6.49Std. Dev.=2.036


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FIGURE 24 SMOOTHNESS OF BUYING PROCESS VS BUYING ROLE

We draw various insights about how smooth the process went compared to the distance search from home, and whether the purchase was new or infrequent compared to a yearly repeat purchase. These results are shown in Table 7 and Figure 25.

This year more buyers were buying something new or infrequently compared to 2015. Thus we see that the smoothness of the purchase when searching locally went down from a median of 8.35 to 6.3 from 2015 to 2016. The regional numbers remain about the same despite more people looking to buy something new or infrequently. Another big change is the 31 people who searched internationally, as they reported the least satisfaction of 5.8 versus 7.0 in 2015. Perhaps the process didn’t go so smoothly for these buyers as a greater percentage of them in 2016 (36.3% vs 20.8%) were looking for new product/services or buying something infrequently. The numbers for the Global searches were quite similar for both years. The medians for 2015 are shown as red numbers in Figure 25.

Buyer Role

Initiator (12) Gatekeeper (11) User (12) Buyer (12) Decider (26) Influencer (47) All Buyer Roles(120)

0

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Comparison 2016 vs 2015 Distance

Searched vs How Smooth the Process

Went

2016 data 2015 data

count (N) median

1st time or < 1/yr. (N=69)

Yearly or repeat

buy (n=88)

median 1st time or < 1/yr.

Yearly or repeat

buy

Locally (within 100 miles / 150 km )

17 6.3 37.5% 62.5% 8.35 15.0% 85.0%

Regionally (within my own country)

61 6.9 48.8% 51.2% 7.00 20.4% 79.6%

Internationally - but only some selected countries

31 5.8 36.3% 63.7% 7.00 20.8% 79.2%

Globally - the country did not matter

15 6.6 45.4% 54.6% 6.15 37.7% 62.3%

TABLE 7 SMOOTHNESS OF BUYING PROCESS VS FREQUENCY OF BUY

FIGURE 25 SMOOTHNESS OF PURCHASE PROCESS VS DISTANCE SEARCHED

Max. Distance Searched

Locally Regionally Internationally Globally0

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6.0 DISCUSSION

More than 200 packaging buyers around the world contributed to this study. In Section 1, we identified eight key research objectives for the study. We now review the results in the context of the eight objectives.

Objective 1: Enable packaging buying teams around the world to benchmark their own online buying behavior.

This objective was met quite well. We started by including reasons why people do not use the internet for a purchase. Besides repeat purchases, and getting all the needed information from colleagues, there are still people who collect the information needed using personal contacts at trade shows or sales people.

The study covered a range of products or services bought, such as packaging materials, machines, automation services and more. This should enable a variety of buyers to profit from this work. We also successfully identified the information sources used by buyers during four key buying steps. The types of information sought online were characterized, with 89% looking for product or service information and 72% looking for pricing information.

Buyers can also characterize their role in a recent purchase using one of the six roles we defined for this study. Thus, buyers can benchmark the kinds of information they sought relative to peers. Also, buyers can rate their own perceptions of the effort it takes to search and profit from the internet relative to peers.

Objective 2: Determine which phases of the buying process people use the internet.

With more than 200 responses, we determined which of the four buying steps buyers used the internet to facilitate their purchase. Further, we were able to map different kinds of information sources (website, trade press, social media, etc.) and when they were used during the four buying steps. Clearly the internet is not used evenly for all four buying steps. This makes sense, as only a few kinds of purchases can be made directly online without any other type of vendor or solution qualification.

Objective 3: Determine what are the most common online resources (channels) used by buyers to search for information.

We found that supplier websites (96%), web search engines (96%), supplier emails (79%), press articles in trade journals (66%), online webinars/videos (55%) and trade association websites (53%) are the most commonly used.

Objective 4: Examine if there are any significant differences in online behavior of the six different buying roles suggested to survey participants.


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This objective was partially met. Even though the sample grew this year, we still did not have enough participants in certain buyer roles (such as initiator, gatekeeper, user and buyer). Thus, we were careful in reporting based on the role that the buyer played in the buying process. However, we can say most buying roles reported that the effort to find information online is still high, rating 5.32 on a scale of 10, where 1 is easy and 10 is hard.

Objective 5: The results should be objective, reported by the buyers themselves.

The data we collected came directly from qualified buyers. Participants came from 21 countries, but 84.6% still were from North America. Thus, we can’t say that worldwide opinions and behavior are well represented. There may have been some language barriers for some of the buyers, as the survey was offered in English only. The buyers were qualified, as they claimed that they made a purchase the past 12 months. There were limits in the utility of the demographic descriptions of the buyers. We did not ask about the job functions or seniority of the people filling in the survey. Thus, there are limits on benchmarking relative to seniority and specific job titles.

Objective 6: Compare and contrast buyer behavior in 2016 versus 2015.

Our comparisons are interspersed in the texts above in sections 4 and 5 of the report. Major differences are summarized here. First, more people used the internet this year to facilitate their purchase (with the size of the population normalized between years). We were happy to report that more people decided to participate in the survey this year, a gain of 45%. More of this year’s buyers were looking for new products or services, or ones they bought infrequently than last year. Interestingly, the search distances for 2016 remained the same proportions as in 2015.

Objective 7: Help vendors better optimize their online content offerings to serve buyer’s needs.

Our results show vendors which online information channels are used by buyers during different stages of their buying journey. Such information should help them decide where to advertise or to place content.

Also, we reported on what kinds of information is used most often. There are some insights about why people do not use the internet for purchases as well. Figure 11 shows the types of information sought. The information about the impact, and intent, of the online content offering may help certain vendors to improve these two metrics. A key message to many vendors is to stop or reduce the gating of information to buyers.

Objective 8: Identify additional key insights or questions for follow-up studies in the near future.

As we intend to carry out a similar study in 2017, we propose these improvements and enhancements to the study. Naturally we are happy to hear from buyers (and other people in the packaging community) about other suggestions.


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1. Grow the sample population to 750, with more qualified buyers from outside North America (+25% to 30%).

2. This year there seemed to be a small decline for using the internet to validate solutions and vendors in 2016 versus 2015. Will this be an ongoing trend in 2017?

3. What changes can we detect in buyer’s content consumption in 2017 versus the past two years? Are there any trends?

4. It would be useful to characterize behavior more specifically of people making (frequent) rebuys versus people who are making a purchase for the first time or infrequently.


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7.0 MANAGERIAL IMPLICATIONS Buyers The purchasing environment for packaging solutions, products or services remains challenging for most organizations. Most purchases using the internet to source information or products are quite short, less than six months (89%), so there isn’t too much time to search and interact with vendors online. With one third of the buyers rating the overall online customer journey as substandard (less than 6.0 on a scale of 10.0), clearly there is some room for improvement within many organizations. Information overload is not the key issue. As we reported, gated information, unclear or poor information online, and simply finding appropriate qualified vendors online are the top three issues for many buyers. The effort to find appropriate information online is rated the highest hindrance compared to the impact, intent and reputation of the information. Thus, buyers need to be more clever in their online search tactics, but suppliers also need to heed the findings of this report to improve the situation. Buying organizations can benchmark their search tactics against those reported herein. We noted a drop of 9.3% in the number of buyer’s using industry intermediaries, such as packaging associations to help in their searches. The reasons for this decline were not studied here. However, it would make sense to communicate with such trade associations about the utility of their online resources in the context of your buying needs. Industry or competitive comparisons of products or services, and technology primers of how-to achieve a packaging result are sought by about 40% to 60% of the buyers during their purchasing journey. This makes sense, as you want to buy the best product or service at a given price point to remain competitive. Social media is used by many buyers around the world, but the use of it is not valued by many buyers during the purchasing processwith more than 60% of the buyers reporting no benefit. Social media doesn’t really speed up the transferring of information, as reported by 64% of therespondents. Suppliers There are some key messages from this research to suppliers that proliferate their marketing and sales efforts online. As mentioned in the introduction, it remains crucial to service customers with real people. However, during the earlier phases of customer journeys, it makes sense to let people serve themselves as much as possible, seven days a week, 24 hours a day. However, it appears that many vendors are still gating information about their products or technical assistance materials, which is counter-productive.


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This year, 23% more buyers indicated they were looking for technology primers and information on how to do something. Thus, it would make sense to ensure such information is easy to find and access on your websites and web properties. The quality of such information also needs attention, as about 60% reported that unclear or poor information was their second highest ranking nuisance for why it is hard to find information online. Thus, perhaps it makes sense to improve the quality of posting before addressing quantity. Gating pricing is understandable, but you need to respond to pricing requests in a timely manner, as this is a common complaint. Regarding online marketing communications channels, it remains a challenge to figure out where to post relevant content and/or advertising. Most respondents reported less use of channels after the initial phase of identifying their needs and defining their needs. At this stage of searching, many different channels are still used. In the next step of the customer journey, less people are using certain channels as compared to 2015 (such as your website or the websites of packaging associations). The biggest decline in online usage is in the short-listing phase, when buyers validate a few sellers. Here all channel use decreased. At this step, it seems that it is crucial for sellers to allocate proper personal selling techniques to engage the buyers personally (off-line). Social media continues to be a work-in-progress. Most likely it does not assist you in actual sales. Facebook and Twitter were not used by more than 80% of the buyers in this survey. Even LinkedIn was not used by 50% of the buyers. So sellers should be careful in allocating resources to social media to move short-term sales targets, as this will most likely fail.


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8.0 BIBLIOGRAPHY

Albee, Ardath. eMarketing Strategies for the Complex Sale, pgs. 110-119, McGraw Hill, 2010.

BaseOne. (2012). Buyersphere Report 2012. London: BaseOne.

Brinkmann, K. (2012). Social Media Network Use in Purchasing. Maastricht: Maastrict University.

Cespedes, Frank V., Bova Tiffani, (August 2015), What Salespeople Need to Know About the New B2B Landscape, Harvard Business Review

Corporate Executive Board. (2011). MLC Customer Purchase Research Survey 2011. Corporate Executive Board.

DemandGen. (2013). The 2014 B2B Buyer Behavior Survey. Hasbrouchk Heights: DemandGen.

Frederick C. Webster, J. a. (April 1972). A General Model for Understanding Organizational Buying Behavior. Journal of Marketing 36, 12-19.

Giunipero, L. C. (2013). The Impact of Social Media in Supply Managment - Focus Study. CAPS University of Arizona Supply Chain Research Center.

Grewal, R., Lilien, G.L., Bharadwaj, S. et al., Business-to-Business Buying: Challenges and Opportunities (2015) 2: 193. doi:10.1007/s40547-015-0040-5

Kotler, P. K. (2012). Marketing Management. New Jersey.

Kreutzer, R. (2010). Praxisorientiertes Marketing, Grundlagen--Instrumente-Fallbeispiele. Wiesbaden: 3. Aufl.

Lilien, G.L., The B2B Knowledge Gap, International Journal of Research in Marketing (2016), http://dx.doi.org/10.1016/j.ijresmar.2016.01.003

Lingqvist, Oskar, Lun Plotkin, Candace, and Stanley Jennifer, (February 2015) Do you really understand how your business customers buy?, McKinsley Quarterly

Schwartz. (2011). The Rise of the B2B Social Buyer - 2011. ITSMA.


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Szanto, G. (2015), Online Buying Behavior of Packaging Buyers in 2015, Fontys University of Applied Sciences

Szanto, G (2015) Online packaging information is relatively easy to get but not to share, Packaging Digest Dec. 2015, retrievable at: http://www.packagingdigest.com/packaging-research/online-packaging-information-relatively-easy-get-not-share

http://www.packagingdigest.com/packaging-research/online-packaging-information-relatively-easy-get-not-share

http://www.packagingdigest.com/packaging-research/online-packaging-information-relatively-easy-get-not-share


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APPENDICES

Appendix 1: Location Map of Survey Participants Location map of all participants who started the 2016 survey.

Location map of all qualified participants who participated in the 2016 survey.

417

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Number of Records1

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Appendix 2: Histogram of length of buying process

Average length: 3.9 months

Standard Deviation: 3.5 months.

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Length of Buying Process Histogram (N=152)

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Online Buying Behavior of Packaging Buyers in 2016

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