ndustrial Buying Process & Factors

By Ashwin Raphel IG Blessy Varghese

( Buy - Phase Buying Process

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valuation of product performance Selection of an order procedure valuation of proposals & selection of a suppiler Acquisition and analysis of proposals Search of qualified suppliers Development of detailed specifications Definition of product - type needed Recognition of a need

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An organi.ation needs *ample new office space .

! - Recognition of a +rowded +ondition need Definition of product - type needed Built a new office , add on to e*isting ,uilding or simply find a larg place to rent / ,uy Development of detailed specifications An architect would help creat specifications ,y drawing pla

Search of qualified -hen suppliers the suppliers will ,e contacted , inclu those recommended ,y the architect

Acquisition and analysis of proposals Receiving & reviewing ,ids from ea contractor

valuation of proposals & selection -he architect of & the e*ecutives wou a supplier meet , evaluate the proposals , and select a contractor

of a contract specifying whe Selection of an order +reation procedure ,uilding will ,e complete , what it will li/e , and when payments will ,e made

valuation of product performance valuation ,egins as the pro0ect ,e

S o m e + o n ce p ts in B u y - G rid ) o d e l
NEW BUYS STRAIGHT REBUYS MODIFIED REBUYS

Marketing Implication o! T"e B#$%Gri&

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REWARD%MEASUREMENT THEORY THINK: BENEFITS BEHA'IOR (HOI(E THEORY THINK: SITUATION RO)E THEORY THINK: NORMS / EXPECTATIONS

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-his points out that ,uyers are motivated ,y ,oth I5-RI5SI+ R 6ARDS ( those rewards they give themselves ) & 7-RI5SI+ R 6ARDS ( rewards given ,y the organi.ation ) -he degree of importance or value attached to a reward . It varies from person to person . Perceived Pro,a,ility , or the perception that effort on a particular set of tas/s will lead to accomplishment of performance outcomes that will , in turn , lead to the desired reward .

)otivation

= Valence 7Pro,a,ility

*ample

BEHA'IOR (HOI(E THEORY

-his theory states that ,uyers go through a choice process to arrive at decisions of how they will ,uy .

*roce IDENTIFYING SITUATION %%%%%%%%% + E'A)UATE *ERSONA) RE)E'AN(E %%%%%%%%%%% ,

ASSESS A(TION A)TERNATI'ES -

* a m p le

IDENTIFYING SITUATION

-he degree to achieve 2RI 5-A-I25 -he degree to achieve .

to which the individual wor/s Personal ,enefit --- S 8F . to which the individual wor/s +ompany --- +2)PA54 - 2RI 5-A-I25

* a m p le

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E'A)UATE *ERSONA) RE)E'AN(E

e2amine t"e re3ar& 1ot" !ormal - in!ormal4 3it" t"e it#ation a tage one5

T"e 1#$er tr#ct#re 4 a ociate& &e!ine& in

Situation ! opportunity to purchase a product reward structure associated with product , such as satisfaction with the product .

Situation " opportunity to show off decision - ma/ing s/ills reward structure associated include promotions , management recognition , and the li/e .

T"e 1#$er look at t"e amo#nt o! control o6er t"e ta k7

Are t"ere an$ c"oice in 3"at t"e 1#$er can an& can8t &o 9 (ompan$ policie - proce&#re ma$ limit t"e c"oice o! 1#$ing acti6itie E2ample7 (ompan$ polic$ ma$ re:#ire oliciting at la t t"ree 1i& 5

ASSESS A(TION A)TERNATI'ES RE.UIREMENTS

T"ere are t3o t$pe o! trateg$

company - orientation

(HOOSE BEHA'IOR STRATEGY

Selecting A- & - --- high self OFFENSI'E orientation Selecting another --- high DEFENSI'E

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-his theory suggests that people ,ehave within a set of norms or e*pectations of others due to the role in which they have ,een placed . 6hen a person ma/es a purchase decision alone for an organi.ation , the decision is said to ,e autonomous . 6hen more than one person is involved , the group of participants in the company are called the ,uying centers or decision - ma/ing units ( D)3 ). Role theory helps us to understand how those participants interact ,ecause it defines the role ta/e when involved in purchase

RO)ES IN THE BUYING (ENTER

Initiator Starts the recogni.ing the need. purchase process ,y

Decision ma/er -he person who ma/es the final decision. +ontroller +ontrols or sets the ,udget for the purchase. Influencers Are those individuals who see/ to affect the decision ma/ers finial decision through recommendations of which vendors to include or which products are ,est suited to solve the organi.ations needs.

E2ample
PERSON SECRETARY VICE PRESIDENT OFFICE MANAGER SECRETARY & OFFICE MANAGER VICE PRESIDENT OF OPERATIONS ROLE

Initiator-reports that fax keeps breaking down

Controller-sets budget for purchase of new fax

atekeeper-gathers re!iew fro" !endors#

Reco""ender$Influencer-reco""ends a particular product to decision "aker

%ecision &aker ' Selects fax to purchase

 General theory of why ,uyers ,uy -he theory descri,es as due the com,ined effects of four factors.
Government regulations and technology . Si.e and num,er competitors . +ompany si.e , corporate culture , and policies . Age , e*perience , education . and of

BUYING DETERMINANTS THEORY

Environmental factors Market factors Organizational factors Individual factors

Re!erence
B# ine Marketing ; F Ro1ert D3$er an& <o"n F Tanner5

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