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Affecting buying behavior

Buying decisions process Buying objectives and structure of organizational markets

Group members
Kiran Siddiqui
Auroob Irshad Nida Afzal Sadaf Rauf Rubbia Waseem

Buying Objectives
Availability Of The Required Good

Goals Price

Buying behavior
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

Factors Affecting buying behavior

Internal Factors External Factors

Factors affecting buying behavior (internal factors)

Organizational goals and objectives Organizational structure Policies and Procedures

Technological Levels
Manpower Skills

Factors Affecting buying behavior (External Factors)

Economic Conditions
Regulatory changes

Political environment
Social Environment Competition

BUYING PROCESS Buying Decision Process

Initiators: those who make request for purchase Users: those who will use the product Influencers: Influence buying decisions, including technical personnel Deciders: decide on product requirements or suppliers Approvers: authorize the proposed actions of deciders or buyers Buyers: have authority to select supplier and arrange purchase terms Gatekeepers: people who have power to prevent sellers or information from reaching members of the buying center.


The purchasing/procurement process

Three Ways of Company's Purchasing Orientations:
1.Buying Orientation:
* focus on short term & tactical
Two tactics:

a. b.

Commoditization: firm imply that product is commodity & care only about price Multisourcing: firm use several sources & make them compete for shares of companys purchase.
* focus on quality & cost ,long term contracts. * nice relation with suppliers.

2.Procurement Orientation: 3.Supply Chain Management Orientation: * more strategic.

* firm focus on improvement of value chain.

Types of Business Customers

Solution-oriented customers (consultative selling). They want low prices but will respond to arguments about lower total cost or more dependable supply or service.

Price-oriented customers (transactional selling). Price is everything.

Gold-standard customers (quality selling). They want the best performance in terms of product quality, assistance, reliable delivery, and so on.

Strategic-value customers (enterprise selling). They want a fairly permanent solesupplier relationship with your company


School of business Management


Types of purchasing processes

Marketers need to understand how business purchasing dept works . Peter kraljic distinguished 4 product-related purchasing process

1.Routine Products: These product have low value and cost to the

customer involves low risk. (e.g. stationary) 2.Leverage Products: These Products have high value and cost to the customer but involves little risk of supply.(e.g. engine piston) 3.Strategic Products: Such products have high value and cost to the customer also involves high risk.(e.g. main frame computers) 4.Bottleneck Products: Such products have low value and cost to the customer but they involve some risk.(e.g. spare parts) Note: purchasing process will vary with different types of products.

Business Marketers need to be aware of organizational trends in purchasing

Purchasing department upgrading Cross functional roles Centralized purchasing Decentralized purchasing Internet purchasing Long term contracts Purchasing performance evaluation and buyers professional development Lean production



Organizational Markets

ADVANTAGES Improved management information across all areas of purchasing Instant access to catalogs and products Improved transparency and interoperability Standardized and streamlined purchasing practices Budget visibility and control Supplier bills paid on time Reduction in paperwork and duplicated records Centrally-managed contracts Faster procurement Improved methods of spending and performance measurement and analysis Lower overhead and marketing costs for vendors

Organizational Markets

DIS ADVANTAGES Human or system errors in orders Software and systems that don't meet companies' needs Lack of vendor support for e-commerce Generation and maintenance of product information Inadequate search capabilities Tendency to use one e-procurement system or process (e.g., reverse auctions) for all areas The need for internal culture change so employees will use the new system Training costs Potential change in suppliers or available goods

Organizational Markets


Organizational Markets (Definition)

All the individuals and companies who purchase goods and services for some use other than personal consumption