Technical Instrumentation Market

Part
01
of two
Part
01

Technical Instrumentation Products: Consumer Purchase Decisions (Large Firms)

There are various factors that are currently influencing the purchasing habits of technical instrumentation products by large firms. Some of these include the availability of after-sales service, convenient shipping arrangements, various purchasing methods, payment and pricing options and the presence of designated sales representatives. Below is a methodology that we used to find the leading factors that influence the product buying habits of large companies

METHODOLOGY

Information for this research was obtained from credible industry publications and company websites relating to factors influencing the product buying habits of large firms. We started our search by focusing on large firms that purchase technical instrumentation products. This information was not available since most buyers rarely disclose their instrumentation suppliers to maintain their competitive advantage. However, we managed to get the top sellers of instrumentation products.

Our assumption is that the top sellers are responsible for supplying large and well-paying companies with their instrumentation products. We, therefore, focused on the attributes of these companies to determine the influences that affect clients to purchase their products. As such, we focused on various market reports to determine factors that are present in various resources. We then shifted our focus to the official websites of the top-selling instrument companies in North America to find details about their services and payment options.

Based on our search, we established some common factors like specialised shipping and bulk pricing are not prioritised and are therefore not strong influencing factors. Some common factors include after-sales service, offering price quotes and having various purchasing options.

TOP FACTORS CURRENTLY INFLUENCING THE PRODUCT BUYING HABITS OF LARGE FIRMS

Some of the current and projected industry influences include after-sales services, online purchasing options, product promotional activities, product testing before purchase and specialized customer service and support.

AFTER SALES SERVICE

The rate of after-sales service is expected to grow significantly by the highest compound annual rate. Some of the companies that offer after sales service include Keysight Technologies, National Instruments, Viavi Solutions and EXFO.

SALES REPRESENTATIVES

Companies are also directing potential clients, large firms, to sales representatives who will offer them personalized support throughout the sourcing and purchasing process instead of having them purchase items through their online stores. In case any issues arise throughout the process, the sales representative will be the contact person between the company and the client. Examples of companies that have adopted this approach include Keysight Technologies, National Instruments, Viavi Solutions and EXFO.

TRAINING

Companies are also offering training for products that have been purchased by large firms. This strategy has been adopted by Keysight Technologies, National Instruments, Viavi Solutions and EXFO.

PAYMENT OPTIONS

Various companies have different payment options:

PRICING

Various companies have different pricing options that can be discussed with large buyers:
  • Keysight Technologies: The company directs companies to sales representatives who will provide the potential client with a quote. In the case of bulk purchases, a discount can be discussed with the designated sales representatives. For some products, there are special offers.
  • National Instruments: Potential clients request a quote from the sales representative, and once this has been obtained, they have a 30-day price guarantee for their selected products. Price discounts are offered by the company.
  • Viavi Solutions: The company provides a price quote for prospective clients, and bulk pricing can be offered based on discussions with sales representatives.
  • EXFO: The company provides a price quote for potential clients, and bulk pricing can be offered based on discussions with sales representatives.

SHIPPING

Companies have different shipping arrangements for their clients. In the case of National Instruments, EXFO and Viavi Solutions, there are no shipping perks. Keysight Technologies offers clients the option to expedite shipping of orders.

PURCHASING OPTIONS

There are different purchasing options that are offered by various companies. These include:
  • Keysight Technologies: Instead of standard purchasing, clients can lease products, rent-to-own and get access to finance facilities for their services. They can also purchase used products at lower prices.
  • Viavi Solutions: Clients can lease products, rent-to-own and get access to finance facilities from their regional partners. They can also purchase refurbished instruments at lower prices.
  • EXFO: Clients can lease products, rent-to-own and get access to finance facilities from their regional partners. They can also purchase refurbished instruments at lower prices.
Part
02
of two
Part
02

Technical Instrumentation Products: Consumer Purchase Decisions (Small Firms)

SMEs choose value over price when it comes to technological purchases. Additionally, they are also influenced by vendor trust, online reviews, and experiences from other businesses, colleagues, and friends. However, the information for the top factors influencing the product buying habits of small firms could not be found.

Methodology

We looked into various published articles by small businesses and other business sources such as SBE, Forbes, Fortune, Business Insider, Entrepreneur, INC, and others. We also checked reports that talked about factors driving consumer technological purchase decisions from credible sources such as Academia, Research Gate, and Tandfonline. Other similar reports coming from McKinsey, Deloitte, and PWC were also checked. Other sources that published articles on marketing strategies for companies that want to sell from small firms were also checked. These sources include B2B Marketing, Duct Tape Marketing, and Think Growth. After this exhaustive search, we still could not find any information on the given topic.

Our research has shown that small businesses comprise 99.9% of the businesses in the US, and out of the 28 million businesses in the US, 23 million businesses are controlled by entrepreneurs. The average employee count for businesses that earn less than one million is only three. This information tells us that small firms within the US make highly fragmented decisions at a very personal level, and this fragmentation of decisions has led to the absence of a comprehensive and compiled data because this might be too big of a task for any consultancy firm to take. Additionally, the technical instrumentation industry is also a niche domain, which makes it harder to find specified data on the given topic.

We looked for alternate data points by looking into companies that sell technical instrumentation. However, these companies provide very little insight into the topic. We also looked into companies that buy products such as direct reading thermometers, sensors, smoke detectors, microscopes, or heating thermostats. These included companies that fell into categories such as small manufacturing firms, path-labs, and small motor repair garage chains. However, none of these companies provide information about their purchase decisions, which is usually available for some large firms. We also broadened the research criteria by including other geographies outside the United States. This search led to some useful findings which we have included in this research.

SMEs' Purchasing Habits

Global trends have shown that the factors that influence the buying habits of small firms are the prices. Price is not the only criteria when it comes to technological purchasing. A study done by CEB Global has shown that 79% of SMEs do their best to buy what they can afford. However, they don't tend to buy the cheapest products. Statistically, it was found that SMEs tend to put ‘value’ above ‘price’. It makes sense, considering that they enjoy the best purchases compared to cheaper ones. It was found that the analytical instrumentation industry in the US used to put price over value. However, as time passed by, they started to develop a "value over price" system when it came to technological purchases. Additionally, SMEs look into other factors when making purchase decisions. Such factors include the ease of transaction, highly-rated customer service, reliability, and product quality. However, when it comes to SMEs in the US, these factors differ.

In the US, SMEs take a couple of considerations when making a technological purchase. These considerations include importance to convenience (43%), compatibility with the SMEs' current infrastructure (37%), vendor trust (32%), and technology that scales with their business (28%). It was also found that SMEs place much value in vendor trust, making it one of the more important factors when it comes to technological purchases. Additionally, SMEs in the US do their research before buying the product themselves, and they like to be informed about what they are buying and how they could benefit from it They also check the “Word-of-Mouth” properties of the product by checking online reviews and the experiences of fellow businesses and friends. In addition to this, it was found that 70% of SMEs buy their product online. This is quite similar to the UK where 58% of SMEs purchase online because of the convenience. However, there were still some businesses that decided to buy the products in person (24%) and by using their phones (15%).
Sources
Sources

From Part 01
Quotes
  • "Finding a company's actual suppliers is often very difficult. Many companies do not want to reveal this information to their competitors."
From Part 02
Quotes
  • "While budget stretch is always a consideration, SMEs often won’t simply choose the cheapest option. Our experience tells us that they also place value in ease of transaction, highly-rated customer service, reliability and product quality."
  • "While it may not be universally true, many will be more likely to choose the best they can afford than the cheapest they can get away with (79% of SMEs buy the best they can afford not the cheapest they can get away with, according to CEB Globa)."
Quotes
  • "While there’s less consensus surrounding other factors, many small business owners pointed to convenience (43%) and compatibility with current infrastructure (37%) as important considerations when making technology purchase decisions. Vendor trust (32%) and technology that scales with their business (28%) are important to more than one-quarter of respondents."
Quotes
  • "75% of SMEs feel large companies don’t market their product effectively when targeting their community."
  • "According to our study, there’s an element of serendipity as buyers begin their journey and formulate their strategy – 27% of small businesses claim they first noticed a certain product or service while scanning the market, but just 7% cited advertising and 3% social media. The most-trusted information source is self-conducted research (27%), followed by recommendations from friends, family and colleagues (20%), then online reviews/blogs (17%)."
  • "52% said they enjoy discovering new products and services. And once they start their research, the internet plays a major role, making it easy for buyers to compare products and services, and get the opinions of peers and experts. However, our study revealed that during the research stage, for buyers there’s no substitute for actually trying the product themselves – the demo or trial is the most trusted source of information (56%)."
  • "53% of respondents said they prefer to visit a store and speak to a rep to get reassurance they’re making the right decisions. Our study also revealed recommendations and reviews are critical, with 49% citing them as their top source of information during the research stage."
  • "When it comes down to sealing the deal, online is the preferred channel, largely for its convenience (58%). Just under a quarter (24%) prefer to buy in person and 15% are happiest buying over the phone."
  • "When it comes interacting with your brand face to face, your reps’ knowledge and bedside manner really matter. In our study, 55% of respondents said they’re looking for suppliers who ‘share their own business values and vision’, with 38% even describing their regular suppliers as ‘good friends’. So a personable, well-informed sales exec who can advise a customer on what’s right for them can be the clincher (even if the customer ends up buying online)."
Quotes
  • "First they search the internet looking for what criteria they should be considering. "
  • "Next, they rely on word of mouth. Once they understand what criteria they are looking for and which alternatives have that criteria, they are checking online reviews and experiences by colleagues and friends. The study also showed that most purchasers were not committed to a brand as they went through their purchasing process."
  • "However, random conversations on Twitter and Facebook have little influence ."
  • "Buying technology for business is often an online purchase. The study shows that 70% of their respondents purchase online."
Quotes
  • "However, establishing trust is extremely important. Small business owners can be loyal to a fault. Also, while the majority of businesses in the U.S. are small businesses, sourcing and reaching this long tail of potential customers in a cost-effective way can be very difficult. "
Quotes
  • "The market and the customer has changed much more than the manufacturers and I think that represents opportunities for some and challenges for others. Companies that are product focused are being left in the wake of those who are customer or value focused."
  • "If it's equipment that's less than $50,000, there's fewer people involved in the decision, which makes things simpler."
  • "For equipment that's between $50,000 and $500,000, there are around 5.4 decision-makers. For each purchase, there's a financial decision-maker, there's a technical decision-maker, there's the various types of them, and again, the challenge is the fact that the salesperson for the equipment company generally meets with and only has one or two contacts in the CRM."
Quotes
  • "Small and medium-sized businesses are the lifeblood of the economy. By the latest estimates, they make up 99.9 percent of the businesses operating in the U.S. today and employ almost 48 percent of U.S. employees."
  • "Of the 28 million business in the U.S., 23 million are run by solo entrepreneurs. What's more, the average employee count for businesses that earn less than $1 million annually is only three."