Organisational buying/ Chapter 4 Flashcards
explain the 3 types of organisational markets
industrial market - buy products and services to help them produce other goods and services e.g. raw materials
re-seller market- buy products and services to resell
government market- government agencies that buy products and services to help them carry out other activities
what 6 roles have been identified in the decision making unit
initiator user decider influencer buyers gatekeepers
what is the initiators job in the DMU
they begin the purchasing process e.g. maintenance managers
what is the users job in the DMU
the ones who actually use the product. They may be the one who initiates the purchase process and may develop the product specification e.g. welders
what is the deciders job in the DMU
have the authority to select the supplier and/or product e.g. production managers
what is the influencers job in the DMU
supply information and advice e.g. accountant
what is the buyers job in the DMU
have the authority to execute the contractual arrangements e.g. purchasing officer.
what is the gatekeepers job in the DMU
controls flow of the information e.g. secretaries
what is the decision making unit
it is defined as a group of people within a buying organisation who are involved in the buying decision
what are implications of the DMU
Need to identify key actors in buying decisions.
Composition and roles played in the decision-making unit have implications for communications: target audience and message.
explain the organisational decision making process
- recognition of problem (need)- recognised in internal/external factors.
- determination of specification and quantity of needed item- draw up description of what is required
- search for and qualification of potential sources- a lot of variation in degree of search takes place in industrial buying
- acquisition and analysis
- evaluation of proposals and selection of supplier
- selection of an order routine- details of payment and delivery drawn up
- performance feedback and evaluation-purchasing department draws up evaluation form for user department
what types of choice criteria are there?
- economic investment e.g. price
- technical e.g. delivery, reliability
- social (organisational) politics e.g. status, office
- personal, reduction e.g. personal risk
what are the implications of the choice criteria?
- Marketing and sales appeals may need to be modified to different members of the decision-making unit.
- Choice criteria may change over time as circumstances change. Suppliers may need to change their offerings and communications as a result.
what are the influences on organisational purchasing behaviour
- buy class -
-new task-organisation makes an initial
purchase of an item to be used to perform a new
job or to solve a new problem. Lots of info
required from supplier
-modified re-buy - When a new task purchase is
changed on repeat purchases. The buyer may
require faster delivery, lower prices or modified
specifications,Moderate amounts of info required.
-straight re-buy - The buyer purchases the same
products again routinely under approximately the
same terms of sale. Little info required - product type- product constituents, product facilities,
what are implications for straight re-buys and new tasks
- new task - Big gains for those suppliers involved in the decision-making process at the start.
Many people are involved and the process is long – suppliers need to invest heavily in time to influence all of them. - Current suppliers need to build a strong defensible position and maintain it.
Potential suppliers need to reduce risk of change for purchaser.
