Organizational Buying Decision

Stages
 1. Anticipate or recognize a
problem or need
• Derived demand
– Volatility
• Need recognition may
be
– Automatic
– Identified due to a better
operation
– evolved
2. Determine and describe the traits
and quality needed
• Purchase-resultant of the
demand for the firm’s outputs
& requirements
• Criteria must be technically
precise
• Optimum quantity needs
• Clear & precise description of
W-H-W
3. Search for and qualify potential
suppliers
• Relationship selling
• Single-source suppliers
 4. Acquire and analyze
proposals/bids
The process may be
• Extensive
• Limited
 5. Evaluate proposals and select
suppliers
• Members of buying center
examines the acceptability of
proposals
• Purchase department personnel
responsible for evaluating
• Organizational buying – “a rational
decision-making process”
consumer versus organizational
buyer behavior
 Cont..
• Relative importance of supplier selection criteria
varies across organizations and types of
services/products being purchased
– Commodity products
 6. Select an order routine

• Order placement
• Matching the delivery of the goods with the
company’s need for the goods
• Matching the received goods with the ordered
goods
• Internal activities
– Reception
– Inspection
– Paid for
– entry
 7. Perform evaluation and give
feedback
Focus of evaluation
• Product performance
– Performance against expectation
• Supplier’s service performance
– Promptness of delivery
– Quality of product
– After-sale service
 KAIZEN
• Kaizen is the name given
by the Japanese to
continuous improvement

• Kai – change
• Zen – good
Organizational Buying Situations
Organizational Buying Situations
 New-task purchase
• first-time purchase
• complex and expensive product/service
• greater risks
 Modified re-buy
• requires some modification to existing purchase decision
and may open the door for new suppliers
• Users, influencers, or deciders in the buying center want
to change the product specifications, price, delivery
schedule, or supplier
 Straight re-buy
• Buyer reorders an existing product or
service from the list of acceptable
suppliers
ROLE PLAY