Published on February 22, 2014
ORGANISATIONAL BUYING Prof Prashant Kumar Gupta Jain College Of MBA
Features Of Business Markets Fewer, larger buyers Close supplier-customer relationship Professional Buying Several buying influences Derived demand Inelastic Demand Geographically concentrated buyers Direct Purchasing
Business Buying Behaviour Buying behaviour of organisations that buy goods and services for use in the production of other products and services or for the purpose of reselling or renting them for profit
Business Buying Process The decision process by which business buyers determine which products and services their organisations need to purchase and then find, evaluate and chose mong alternative suppliers and brands.
Business Buying Process Order Routine Specification Proposal Solicitation Supplier Selection General Search ProblemNeed Description Recognition • Final order to chosenasked to submit Qualified buyers are supplier Performancefrom ofand Product Specification select service • Can resultvendors product orsupplier Review proposal Find best Review Characteristics internal(Launching a • proposals specifications, quantity Technical • new of internetrated Satisfaction is Desired be done Use product) It should needed technically Quantitysupplier attributes and their needed, expected delivery time, • Kind of proposal depends on thereturn • Also result task, externalthe complexity Continuation, modification relative of doing reduce or Newer the from greater costexit Value analysis to it Processimportance is simple for policies, warranty are decided complexity of the product • factors(Somebodyplace a better offer Negotiation takes of supplier search having standard items Vendor managed inventory • Should be marketing documents
Buying Situation Straight Rebuy 1. 2. 3. 4. Reorder without modification Handled on a routine basis Based on past buying satisfaction Buyer simply chooses from list of suppliers Modified Rebuy Product specification, prices, suppliers are changed 2. Involves more decision participants 1. New Task 1. 2. 3. First time purchase Greater risk and cost Even larger decision participants
Participants In Business Buying Process Influencers Users Buyers Deciders specifications supplier • HelpUsually initiate the buying • define Gatekeepers evaluation of • Formal authority to select • Provideor informal decision makers Formal info for • • • • process Control for terms Information Arrangethe flow ofof purchase In routine define product are deciders alternatives • Help buying buyers Eg: Assistants, Secretaries In complex purchses buyers might or approvers Technical personnel are more specification includehigh level officers to negotiate important influencers
Buying Center All the individuals or units that play a role in the purchase decision making process
Buying Center’s Features Is not formally fixed Buying roles assumed by different people for different purchase Size depends on type of purchase Point of importance is to understand who are the participants and what influence they have
Influence on Business Buying Behaviour Environmental Individual Organisational • Economic Developments like demand, cost Interpersonal etc. • Objectives Age • • • • Supply • Policies (different for avavilable conditions Education Authority and scarce materials) and • Procedures Job position Status Technological Change • Systems Personality Persuasiveness Political Regulatory Developments • Structure Risk Attitude Competitive Depvelopments
Institutional Market • Consists of schools, hospitals, prisons • Provide goods and services to people in their care • Differ in terms of their objectives • Have different buying needs • Marketers need to have separate division to cater to these needs
Government Market • Major buyer of goods and services • In US there are 82000 buying units • Success here lies in identifying the key decision maker • Usually bids are submitted and lowest bid wins • Favour domestic players
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