December 19, 2014

Organizational Buying Process

Organization buying process involves the decision-making  by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers. Organizational buying process has certain parameters which are discussed as follows

EXPECTATIONS

A. Organizational consumer expectations refer to the perceived potential of alternative suppliers and brands to satisfy buying objectives.
B. Expectations are based on the backgrounds of those participating in the buying process, the information received, perceptions, and satisfaction with past purchases.

BUYING PROCESS

A. The organizational buying process is similar to the final consumer buying process.
B. The organizational buying process may involve autonomous or joint decision making.
C. Under competitive bidding, the potential seller specifies all terms and specifications in writing. With open bidding, competitors see bids. With closed bidding, contract terms are kept secret and sellers are asked to present their best bids first.

CONFLICT RESOLUTION

A. Conflict resolution is sometimes necessary in joint decision making due to the diverse backgrounds and perspectives of purchasing agents, engineers, and users.
B. Conflicts can be settled in the following ways:

1. Problem solving occurs when it is decided to acquire more information before making a decision. This is the most effective method.
2. With persuasion, members of the purchasing team present reasons why a particular choice should be made. Often, the most persuasive speaker wins.

SITUATIONAL FACTORS
A. Situational factors (such as price controls, recession, or foreign trade; internal strikes, walkouts, machine breakdowns, and other production-related events; organizational changes such as merger or acquisition; and ad hoc changes in the marketplace, such as promotional efforts, new-product introduction, price changes, and so on) can intervene between the organization buying process and the actual selection of a supplier or brand.

PURCHASE AND FEEDBACK
A. After the decision process is completed and situational factors are taken into consideration, the purchase is made (or the process terminated).
B. Feedback is stored for future use.
C. Regular service and follow-up calls are essential.

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