Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Organizational buying activity centers on the level of experience and information that firm have in purchasing certain product & service. Buying activity consists of various phases of decision making.
(1) The New task (2) The Straight Rebuy (3) The Modified Rebuy
Buying Situations
New Task: The need or problem is considerably different from past experience. Decision maker lack the experience and product knowledge to make comparison of alternative products & suppliers.
Buying Situations
Modified Rebuy: Occurs when decision makers feel that significant benefits such as quality improvements or cost reduction may be derived from reevaluating alternatives. Occurs most often when the firm is displeased with present suppliers.
Buying Situations
Straight Rebuy: Most common buying situation. Little or no information is needed. As long as choice criteria are met, alternative solution are seldom evaluated.
What are the application requirements? What type of goods and services to be considered? What quantities will be needed?
In case of technical products engineering dept will usually prepare performance specification. For non technical items user dept will decide on product specification.
Product Specification Price Delivery Period Payment terms Taxes & Duties applicable Transportation cost Cost of transit insurance. Etc..
Creeping Commitment: Decision making, according to the concept of Creeping Commitment involves a sequence of choices, each of which eliminates certain alternatives from further consideration. In other words commitment to the final solution is becoming firmer and more specific (creeping) with each phase.
Center of Gravity The concept of center of gravity holds that various phases or combination of phases become more critical to final outcomes of purchase decisions and that individuals involved in these critical phases have greater power than do individuals in other phases.
Marketing Implications
Phases New task Modified rebuy
In supplier: maintain quality/service standards; out supplier: watch for developing trends.
Straight rebuy
In supplier: maintain close relationship with users and buyers; Out supplier
1 Problem recognition Anticipate problem; use advertising & creative sales people to convince buyer of problem solving capacity 2 Solution determination Provide technical assistance and information
In supplier and Same as out supplier: phase 1 stress capability, reliability, and problem solving capabilities
Marketing Implications
Phases
3 Determining needed item
New Task
Provide detailed product/service information to decision makers
Modified Rebuy
same as phase 2
Straight Rebuy
Same as phase 1
In supplier: watch for problems; out supplier: demonstrate ability to perform task
Same as phase 1
Marketing Implications
Phases New Task Modified Rebuy Straight Rebuy
5 Analyzing proposal
Understand Make timely details of proposals problem/nee ds; make timely proposals
Buying centers
A decision-making unit may consists of only one person, but it is normally a group of individuals who share a common goal or goals which the decision will hopefully help them to achieve, and who share the risk arising from decision. In industrial marketing, these decision makers are referred to as the buying center.
The buying center is an informal, crossdepartmental decision making unit in which primary objective is the acquisition, impartation, and processing of relevant purchasing related information. People within an organization become involved in buying center for one of the two reasons
Marketing:When a purchasing decision has an effect on the marketability of a firms product Manufacturing:Involved when new products or models are being developed Responsible for determining the feasibility and economic considerations of producing end products. Continuous feed back to the purchasing department on the performance of suppliers makes manufacturing key influencer in the selection and retention of suppliers and the allocation of quantities among suppliers.
The earlier the marketer becomes involved in the development process, the greater the chance of incorporating his product into the final design. By understanding the direction in which customers are moving, marketers are better able to plan the direction of their own business.
General Management:When firm is faced with unfamiliar situations not related to day to day activities, or when purchasing decisions are likely to have major consequences on the firms operation. Purchasing:Contrary to widely held belief, purchasing is not the most central figure in the purchasing process Research indicates that purchasings dominant sphere of influence falls within phases 4,5,& 6 of the purchasing decision process- when specifications of products to be purchased have been established & suppliers qualified. They are dominant decision makers and influencers in repetitive buying situation.
Production Distribution service Capital Equipment Product Essential Support Essential Consumption
Purchase needs
Buygrid Components
Continued
Task-Oriented Objectives:Price Services Quality Assurance of Supply Reciprocity Nontask Objectives:Social considerations, such as friendship, reputation, and mutually beneficial interactions.
Under MRP a firm estimates its future sales, schedules production accordingly, and then orders parts and materials to coordinate with production schedules so that inventories will not become too large or too small To utilize MRP firms are combining functions of purchasing, transportation, inventory control, receiving and in some cases production control under one functional area referred to as materials management.
Just-in-Time Purchasing
JIT is an inventory control system which enables a manufacturer to maintain minimum inventory levels by relying on only one supplier to deliver frequent shipments
Centralized Purchasing
It is centralization of purchasing Purchasing specialist concentrate their attention on selected items, developing extensive knowledge of supply and demand condition. Places more importance on long term availability and supplier relationship.
Marketing Implications
MRP, JIT and Centralized purchasing have a definite impact on industrial marketing programs. Close buyer seller relationship will be developed through MRP and JIT.
It helps to understand Buying Center Involvement and Interactions Patterns in organizational buying. It is useful for examining organizational buying behavior from the perspective of
1. 2. 3.
The condition that precipitate joint decision making The psychological world of the individual involved Conflict among those involved in the decision process and resolution of conflict.
Size of the buying center and the amount of interaction between those involved is dependent upon
1. 2. 3. 4.
Psychological Factors
Difference in Role orientation Difference in information Exposure Perceived Risk in the Vendor Selection Process Strategies to minimize or avoid the perceived risk:
Competing- lets do it in my way! Accommodating- I see your point of view Collaborating- May be we can work this one out. Avoiding- Better let the situation cool down before we act Compromise- Lets split the difference! Coalition- individuals within the formation attempt to cooperate with specific other group members to enhance their competitive position with respect to the entire group.
Thank You..