Business

Buying
Session-11

Manoj Bharti
21epgp093B2

1
Stages in Organisational Buying Process
Problem Recognition General Need Description
.

1 2
.

4 3 Product Specification
Indentifying Suppliers

5
Proposal
Solicitation
6 7 8
Supplier selection
. Order/routine specification
. Performance review
Business Buyers Vs Consumer:
Buying behaviour of organization which buys goods and services
for use in production and service

Characterstics of Business
Market

1. Business Market
volums >> consumer
volumers • Marketing Structure
& DEMAND
• Nature of Buying unit Types of decision
and decision
process.

Manoj Bharti (21epgp092B2) 3

Business Market Characterstics
There is a sharp contrast between business and consumer market.

Market Structure and

demand
• Fewer, larger buyer Nature of Buying Unit
• Geographically concentrated
• Demand derivied from
consumers • More buyers
• Inelastic Demand • More professional Decission Types and
• Fluctuating demand purchasing effort process

• Complex decisions
• Formalised process
• Buyer and seller
dependancies
• Build close term relationship
with customer

Manoj Bharti (21epgp092B2) 4

Business Buying Situations
Straight Rebuy 1. Office Supplies
Reordering Without 2. Chemical
Modification. 3. Consumables
4. OEM components
(Spares)

New Task 1.
2.
Risk
Cost
First Time purchase 3. No of participants
4. Amount and level of
information to gather)

Modified Rebuy 1. Modified product

Requires modification of prior specification
purchase 2. Price, delivery terms
3. Technological upgrade

Manoj Bharti (21epgp092B2) 5

Business Buyer Behaviour
Marketing and other Stimuli
1. Product 1. Economic
2. Price 2. Technological
3. Place 3. Political
4. Promotion 4. Cultural

Buying Organisation

1. Organisational 1. Interpersonal and

Influence individual influences

Buyer Response

• Product/Service Choice • Delivery Terms and Times

• Supplier Choice • Service Terms
• Order Qty • Payments

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Professional Purchasing

Organizational Limits
and constraints

Organizational
Organizational Policies Requirement

1. Quotations
2. Proposal
3. Contract

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Developing Customer Reference Store

Company’s Values Listing qualified

. results affecting
ROI

• Stating Customer needs

Different offerings from
• Emphasizing barrier in
.those of competitiors
satisfying customer need.

Providing a brief of
comprehensive summary
including customer quotes

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Business Buying

Participants Buying Centre Marketers Perspective

> Initiator Issues & influence > Identifying decision influencers

> User • Enviornmental for participating
> Influencer > What decision they influence
• Organisatinal
> Decider > Evaluation criteria
• Interpersonal > Level of influence
> Approver • Individual > etc
> Gatekeeper
> Buyer

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MAN of the organisation

Money Authority Need

v Direct Selling
v Commercial Selling
v Technical Selling
v Connection Selling

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Buying Centre influence

Enviornmental Interpersonal
ü Economic trend
1 3
ü Supply conditions ü Authority
ü Technological and political ü Status
change ü Empathy
ü Culture and Customs ü Persuasiveness

Organisational
ü Objectives
2 4 Individual
ü Policies
ü Procedures ü Age and income
ü Organisational Structure ü Education
ü Systems ü Job Position
ü Personality
ü Risk attitude
ü Buying styles
03

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Purchase Process
General Need Description
Problem Recognition
General characteristics
Required qty estimation.
Stimulator, internal or 01 02
external stimulator.

Product Specification
Supplier search Product Value analysis

Searching appropriate supplier

q Catalogues/Sites
q E-hubs
Solicitation of proposal
q Auction Sites
q Private exchange
03 04 Supplier selection
q Open purchase.

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 Developing Compelling customer value proposition

v Price Pressure

> Internal engineering › Brand repute

assessment › Technology
› Reliability
> Field Value in use Customer value Performance
assessment proposiiton review
v Order Routine Specification
> Focus Group Value
assessment › After vendor selection,
> Direct Survey Specification,quality norms, payment
terms, return, warranty conditions are
> Importance rating reinforced
> Compositional approach
> Benchmark (Customer)

Manoj Bharti (21epgp092B2) 13

Thank
You

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