Industrial buying


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Industrial buying

  1. 1. Industrial buying behaviour
  2. 2. Introduction • Increase in economy results into creation of Demand for industrial goods & services, new entrant in market , rise in competition • Industrial buying different from consumer buying • Involves buying like machinery, packaging material & services such as insurance, consultation & transportation • Commercial Buyers i.e buy to either produce something new or resell or use for organizational purpose • refers to the buying activities of organizations that purchase products and services for end-use purpose. • derived demand and not for direct consumption. • Few buyer of industrial goods • a lengthy process & decision of complex nature • Each organization evolves its own procedure for making purchase decision
  3. 3. Three important buying decision are 1.Authority to purchase 2.Determine the product specification 3.Choice of supplier Three types of industrial Buying situations: 1.Straight Rebuy: Buying on routine basis Eg: stationery 2.Modified Rebuy: Modify products specification, price, Eg: Spare parts, technology 3.New Task: buying for the first time for a new task Eg: Plant, building, e
  4. 4. • Industrial products involves: 1.Raw material 2.Fabrication parts & material 3.Installation of machinery 4.Accessories equipment's 5.Operating Suppliers • Exchange process involves Products/ services Information Financial
  5. 5. Participants in buying process • Initiators: One who request that something is to be purchased • Users: one who uses the product or service • Influencers: People who influence buying decision • Gatekeepers: People who have power to prevent sellers or information from reaching members of buying centers.
  6. 6. Decision making process / Industrial buying decision process: Recognition of need  Determining product specification / determining quality and quantity characteristics  Search for suppliers  Analysis of proposals  Selection of suppliers  Selection of an order routine  Post purchase evaluation
  7. 7. Decision-Making Units (DMUs) • What is a DMU? • The decision making power in industrial buying is shared by few persons jointly/ collectively and not by one individual. • There exists multiple buying patterns and the decision makers are also large in number. Joint authority or buying center is useful. Hence it results in making wise decision and also protecting the interest of industrial organization such authority is known as DMU. • In industrial buying the decision making power is shared by people collectively. DMU may be defined as all the individuals or groups who are involved in the process of making a decision to
  8. 8. Participants Of DMU: • Actual users: The one who uses the product. He could be a foreman or labour or the end user help define the product specifications. • Influencer: May or may not be an end user but whose opinion would influence the end users choice. Eg- consultant, technical personnel, Provides information for evaluation of alternatives. • Buyers: Buyer who makes actual purchase on behalf of the organization. They have the formal authority to select the suppliers and finalized terms of purchase. Selection of vendors and negotiating transactions. • Deciders: Actual decision to buy, considering economic and technical factors while making a decision to buy. He finalizes i.e. from purchasing agent or top management personnel. • Gatekeeper: Individuals in the organization who keep a check on the information flow within the organization that is shared. Eg- purchases
  9. 9. Factors influencing purchase decisions buying decisions • Individual factors • Age • Income • Edu & job • Personality • Attitude • Interpersonal Factors • Authority • Status • Empathy • Persuasiveness • Economic Environment • Level of demand • Economic outlook • Competition • Organizational factors • Obj /goals • Policies • Procedures • Systems • Structures
  10. 10. Different between Industrial & consumer Buying behavior BASIS Consumer Market Industrial markets Market structure Geographical Dispense Geographical concentration Buyers & seller Many Seller & many buyer Few buyer & few seller CompeStiton