This document discusses organizational buying behavior and the buying process. It covers key concepts like the buying center, roles in the buying process, factors considered in decision making like price and quality, and models that describe buying behavior. The buying process involves problem recognition, developing specifications, supplier selection, evaluation, ordering, and performance feedback. Multiple individuals and roles are typically involved in the organizational buying decision.

2. 1. Organisational buying Activity
2. Buying models and buying centre
concept
3. Inter Personal Dynamics of Industrial
4. Buying Behaviour
5. Roles of Buying centre
6. Conflict Resolution in Decision Making
7. Ethics in Purchasing

3. It is defined as buying a right items in the right
quantity, at the right price for the delivery at
the right time and place. The objective are
stated as follows
 Delivery/Availability.
 Product quality
 Lowest price
 Services
 Supplier relationship

4. To ensure that purchased goods and services
are available or delivered when and where
needed.
If not delivered, work will come to grinding halt
and this reflect on the performance of the
purchase function

5. It should be consistent with the specifications
and use of the product. It can happen that a
product may meet the Indian Standard (IS) or
British Standard (BS) specifications.
It is important to ensure to consistency in
quality to reduce cost of inspection,
interruptions in production process due to
rejections and arranging the replacement of
rejected material

6. Buyer would like to buy at the lowest price
consistent with availability and quality of the
product.
This will be important objective, if delivery and
quality criteria’s are met.

7. The industrial buyers need many types of
services accompanying in the purchase of
goods. Which are listed:
 Prompt and accurate information of suppliers
 Application or technical assistance,
 Spare-parts availability
 Repairs and maintenance capability &
 Training ( if required)

8. To develop long term supplier/ vendor
relationship and to develop new sources of
supply.

9. The organizational buying (purchase) process
consist of various phases of buying- decision
making process.
The importance to be given to various phases
will depend upon type of buying situations.
Robinson, Faris and Wind developed eight
phases of decision making process and types of
buying situations

10. It is also known as BUYPHASES and they are
logical in sequence.
1. Recognition of a problem or need
2. Determination of application or
characteristics & quality of needed product.
3. Development of specifications or
description of needed product.
4. Search for and qualifications of potential
suppliers

11. 5. Obtaining and analyzing supplier proposals
6. Evaluation of proposals and selection of
suppliers
7. Selection of an order routine
8. Performance feedback and post-purchase
evaluation.

12. It may originate within the buying firm or may
also recognized by a smart marketer.
 Quality of material
 Machineries
 Equipment

13. The buying firm will try to answer questions
such as:
what type of products/services to be
considered?
 Quantity?
 Engineering/design
 R&D
 Production
 Quality control

14. Previous stage are closely related with this
stage. Here prominence is given to technical
specifications of the product.

15. To obtain all the relevant information & secondly
to decide on acceptable or qualifying suppliers
and it depends based on following:
▪ Type of buying organization
▪ The buying situation
▪ The decision making members
General characters will be quality, reliability in
delivery, service are considered to qualifications
of suppliers

16. Proposal can be formal offer, quotation or a
formal bid submitted by supplier, it should
contain product specification, price, delivery
period, payment terms, taxes & duties,
transportation cost, transit insurance and any
other costing

17. Decision makers of buying organization may
evaluate each suppliers on the set agreed
parameters or factors. For illustration
Factors Weight age / IMP Supplier performance Supplier rating
Quality 30 0.8 24
Delivery 25 0.4 10
Price 15 0.6 9
Service 20 0.6 12
Flexibility 10 0.2 2
TOTAL 100 57
A supplier evaluation system

18. It is technique/framework that can evaluate
supplier performance in information age
companies.
It translates companies mission, vision into a
set performance measurements. The frame
work is divided into 4 parts and they are as
follows:
Financial, customer, internal business process &
learning growth

19. Financial
To succeed financially, company
should focus on financial
objectives that will satisfy
shareholders
Customer Internal-business- Process
Which customer value To satisfy shareholders &
Mission & customers, what business
company should focus
Vision process company must
on, to achieve its
mission excel at ?
Learning and Growth
How can company improve &
change to achieve its mission

20. Operations Processes
Identify Design & Make/ Buy Market
Satisfy
customer need develop products/ Products/
customer needs
and market product/ service Services Services
Innovation Processes

21. Mechanics of exchange of goods and services
between buyer and seller is worked out. The
activities include
 Placement of orders
 Quantity to be purchased
 Frequency of order placement
 Levels of inventory needed
 Follow up
 Payment terms

22. A formal or informal review regarding the
performance of each supplier (vendor) takes
place. The user department will give feedback
on whether the purchased items solved the
problem or not. If not, the members of the
decision making unit review their decision
and decide.

23. There are three types of buying situations
called buy classes:
 New task /New purchase
 Change in supplier/ Modified rebuy
 Repeat purchase/ straight rebuy

24. Buyphases New task Modified rebuy Straight buy
Problem Yes May be No
recognition
Characteristics Yes May be No
Specification Yes May be No
Qualifications Yes Yes No
Analysis Yes Yes May be
Evaluation Yes Yes No
Selection Yes Yes May be
Performance Yes Yes Yes
feedback

25. The buying centre, the decision making unit, in
business marketing is called buying centre.
They consists of individuals or members who
participate in buying decision & share the
common objectives.
Size-- varies

26. Usually members of buying centre accept
different roles during the buying process.
These roles may vary for different stages of
the buying process depending upon the
buying situations, complexity of the purchase
and the functions involved.
Assume several roles which are as follows
Users, buyers, influentials, deciders & gate
keepers

27. Recognizing key influential is an important task
carried out sales person.
Identifying key members of buying centre.
Top management persons
Technical persons (functions)
Buyers
Accountants
Marketing function

28. There are three models available to provide a
comprehensive & integrated picture of major
factors.
1. The Webster and Wind Model
2. The Sheth Model
3. The Choffray & Lilien Model

29. Environment Variables
Organizational Variables
Technology Structure Goals and Tasks Actors (people)
(Purchasing) (Buying Centre) (Buying Tasks) (Buying Centre
members)
Buying Centre Variable
Interpersonal interaction
Group functioning: buying task and non task dimensions
Individual Variables Buying Decision Process Buying
Need & desires •Individual decision making process decision
Perception & learning •Group Decision making process

30. Component 1
Component 2 Component 3
Situational
Factors
Variables that
Differences among Methods used for
determine if the
individual buyers conflict resolution in
buying decision is
factors: joint decision making
autonomous or joint:
Back ground of process: Supplier
Time pressure,
individuals, their info Problem solving or
perceived risk, type of
sources, active search,
satisfaction with past
purchase. Persuasion Brand
purchases Company size, Bargaining chice
orientation, degree of politicking
centralization

31. Individual Responsibility Obtained set of alterative
offers
Interaction Evaluation Sources
Structure Criteria Organizational Environmental
of Info constraints Constraints
Likely alternative offers
Individual preferences formed
Organizational preferences
Organizational choices

32. Organizational buying behavior ultimately
influenced by forces within the organization.
it is understand and examine the influence of
purchasing activities on organizational buyer
behavior and how groups and individuals
differ in their approach.

33. A. Material requirement planning
B. Just in time purchasing
C. Centralized purchasing

34. Characteristics of the firm ( Employees,
Function of the firm)
Buying center interaction patterns
 Vertical involvement
 Lateral involvement
 Extensivity
 Connectedness

35.  Differences in role orientation
 Differences in information exposure
 Perceived risk in the vendor
selection process

36. Write in detail about conflict and decision
making:
Refer Reeder Referral book