The buying decision process involves 8 stages called buy phases: (1) problem recognition, (2) general need description, (3) product specification, (4) supplier search, (5) proposal solicitation, (6) supplier selection, (7) order routine specification, and (8) performance review. In the first stage, an internal or external trigger identifies a problem or need. In the second stage, specifications, quantity, and characteristics of the solution are determined. In the third stage, technical specifications are formulated. Suppliers are identified in the fourth stage through methods like trade shows. Proposals are solicited in the fifth stage. A supplier is selected in the sixth stage using an evaluation model. The order details

1. HOW Do
Business Buyers
MAKEDECISIONS
?

2. The
Buy
Phase
The buying decision process is divided into 8
stages called BUYPHASES.
3. Product
specification
4. Supplier
search
5. Proposal
Solicitation
6. Supplier
search
7. Order routine
specification
8. Performance
review
1. Problem
Recognition
2. General need
description

3. 1. Problem
Recognition
● A need or problem that
can be solved by a
product or service is
identified.
● The trigger to identify
this can be either
internal or external.

4. 2. General need
description
● The specifications,
quantity and
characteristics of the
new product or service
is determined.

5. 3. Product
specification
● The technical specifications of
the product are formulated by
the buying organisation.
An approach to determine whether the
components can be redesigned or
standardized or made cheaply without
affecting the product performance.
Product value
analysis (PVA)

6. 4. Supplier
search
Buyer tries to
identify the most
appropriate supplier
through different
methods.
Trade Shows
Contact with
other companies
AdvertisementsInternet
Trade Directories

7. E Procurement
Two types of E Hub
Functional Hub
Vertical Hub

8. Lead Generation
To identify good leads, the marketers must
coordinate with the sales team and take
coordinated, multi channel approach to the
role of trusted advisor to prospective
customers.

9. ● The qualified suppliers
are invited for proposals.
● Proposals are marketing
documents that describe
the value and benefit in
customer terms.
5. Proposal
Solicitation

10. ● Using a supplier
evaluation model, the
buying center will
specify and rank the
customer attributes.
6. Supplier
selection

11. Price pressure
● The buying center tries to negotiate with
prefered suppliers for better prices and
terms.
● Some suppliers impose restrictive
conditions if they agree to supply at lower
prices.

12. No. of suppliers
● Customers are increasingly reducing the
number of suppliers.
● Multiple sourcing increases the threat of
labour strike while single sourcing risks
reduction in quality due to lesser
competition.

13. Buyers negotiate the final order, listing the
technical specifications, the quantity needed,
expected time of delivery, return policies etc.
7. Order routine
specification

14. The buyer
periodically
reviews the
performance of
the supplier.
8. Performance
review

15. Performance review is done in the following ways:
● By contacting end users and asking
for their evaluation.
● Rate the supplier on various
criteria using weighted score
method.
● Aggregate the cost of performance
with adjusted costs of purchase.

16. The
Buy
Phase
3. Product
specification
4. Supplier
search
5. Proposal
Solicitation
6. Supplier
search
7. Order routine
specification
8. Performance
review
1. Problem
Recognition
2. General need
description
RECAP

17. Disclaimer:
““These slides were created by Shine Ali, MEC Cochin,
during a marketing internship by Prof. Sameer Mathur,
IIM Lucknow (See www.IIMinternship.com)”