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Chapter 4
 

Chapter 4

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    Chapter 4 Chapter 4 Presentation Transcript

    •  
    • Business, Government, and Institutional Buying Key Words / Outline Intermediaries, Business-to-Business, Straight rebuys, Modified rebuys, New task purchases, Structural influences, Purchasing roles, Organization-specific factors, Purchasing policies and procedures, Initiators, users, influencers, deciders, buyers, gatekeepers, Sole sourcing, Lethargic organization
    • Buyer Categories
      • Producers: Businesses that buy goods and services in order to produce other goods and services
      • Intermediaries: Purchase products to resell at a profit
      • Government agencies: 86,000 Government agencies spend trillions of dollars on machinery, equipment, facilities, supplies and services
      • Other institutions: Such as hospitals, museums, universities, nursing homes, and churches
    • Organization Buying Process Purchase-type influences Structural influences Behavioral influences Organizational buying process Organizational need Vendor analysis Purchase activities Postpurchase evaluation
    • Purchase Types
      • Straight rebuy: Routine reordering from a supplier used in the past
      • Modified rebuy: Purchase involves considering a limited number of alternatives before making a selection
      • New task purchase: Involves an extensive search for information and a formal decision process
    • Organizational Buying Distinctions
      • How marketing to organizational buyers differs from marketing to consumers
        • More variation in buyer-seller relationships
        • Shorter distribution channels
        • Greater emphasis on personal selling
        • Greater web integration
        • Unique promotional strategies
    • Behavioral Influences
      • Personal motivations: Factors such as friendship, professional pride, fear and uncertainty, trust and personal ambition
      • Role perceptions: Their commitment lies in what they believe is their perceived or expected role
        • Organizations can be divided into three groups based on commitment
          • Innovative
          • Adaptive
          • Lethargic
    • Understanding Buyers’ Code of Ethics
      • Avoid the intent or appearance of unethical activity
      • Demonstrate loyalty to employee by being lawful and using reason
      • Refrain from private or personal activity that could create conflicts of interest
      • Refrain from soliciting or accepting gifts, loans, or services from potential suppliers
    • Understanding Buyers’ Code of Ethics
      • Handle confidential information with proper consideration
      • Promote positive relationships with suppliers through impartiality
      • Refrain from reciprocal agreements that restrain competition
      • Know and obey both the letter and spirit of laws governing the purchasing function
    • Purchasing Agent Influences
      • Design of the product
      • Cost of the product
      • Performance life
      • Naming a specific supplier
      • Assessing engineering support from the supplier
      • Reduction of rejects
    • Organizational Buying Process ORGANIZATIONAL NEED PURCHASE ACTIVITIES VENDOR ANALYSIS POSTPURCHASE EVALUATION
    • Organizational Buying Process
      • Organizational Need
        • Needs based on survivability and stated objectives of the organization
      • Vendor analysis
        • Search for, locate and evaluate potential providers of goods and services
        • Rate them based on quality, on-time delivery, price, payment terms, and use of technology
    • Organizational Buying Process
      • Purchase activities
        • Purchases can involve extensive negotiations on price, term of contract – increases with complex goods and services
      • Postpurchase evaluation
        • Does the purchase perform as expected?
        • Should the supplier be used again?
    • Functional Areas in Organizational Buying
      • Design and development
      • Production
      • Sales / marketing
      • Maintenance
      • Finance / accounting
      • Purchasing
      • Quality control