Professional Documents
Culture Documents
Organization buying is the decision-making process by which formal organizations establish the need
for purchased products and services and identify, evaluate, and choose among alternative brands and
suppliers. (Webster and Wind)
Straight rebuy
In this buying situation, only purchasing department is involved. Thet get an information from
inventory control department or section to reorder the material or item and they seek quotations from
vendors in an approved list.
The "in-suppliers" make efforts to maintain product and service quality. The "out-suppliers" have to
make efforts to get their name list in the approved vendors' list and for this purpose they have to offer
something new or find out any issues of dissatisfaction with current suppliers and promise to provide
better service.
Modified rebuy
In this buying situation, there is a modification to the specifications of the product or specifications
related to delivery. Executives apart from the purchasing department are involved in the buying
decisions. The company is looking for additional suppliers or is ready to modify the approved
vendors list based on the technical capabilities and delivery capabilities.
New task buy
In this situation, the buyer is buying the product for the first time. As the cost of the product or
consumption value becomes higher, more number of executives are involved in the process. The
stages of awareness, interest, evaluation, trial, and adoption will be there for the products of each
potential supplier. Only the products which pass all the stages will be on the approved list and price
competition will follow subsequently.
Systems buy
Systems buying is a process in which the organization gives a single order to a single organization
for supplying a full system. The buying organization knows that no single party is producing all the
units in the system. But it wants the system seller to engineer the system, procure the units from
various vendors and assemble, fabricate or construct the system.
Buyers
They are the person who actually do the buying transaction.
Gatekeepers
They control access to personnel in a company. The receptionist, the secretaries etc.
Deciders
People who decide on product requireements and suppliers. It is the final approval for product
specfications and suppliers' list.
Approvers
Persons who approve the purchase. In the case of safety gloves, the personal manager may have the
power to approve.
Environmental factors
Expected demand for the product that the buying organization is selling, expected shortages for the
item, expected changes in technology related to the item etc. are the environmental factors that will
have an effect.
Organizational factors
Changes in purchasing department organization like centralized purchasing, decentralized purchasing
and changes in purchasing practices like long-term contracts, relationship purchasing, zero-based
pricing, vendor-performance evaluation are the organization factors of importance to marketers.
Interpersonal factors
These factors are the relationship between buyers and sales representatives of various competitor
companies.
Individual factors
These factors related to the buyer. What sort of ways of interacting and service are appreciated by the
buyers and what ways are considered as irritants? Marketers have to understand the reactions of
buyers.
Organizational Buying/Purchasing/Procurement Process
Problem recognition
General need description
Product specification
Supplier search
Proposal solicitation
Supplier selection
Order routine specification
Supplier performance review