Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.
Organizational Buying depends on
1. Buying objectives
2. Buying structure, and
3. Purchase constraints.
Organizational Buying Objectives
A. Organizational buyers have the following several distinct objectives in purchasing goods and services:-
- Availability of items-buyer is able to obtain items throughout the year or whenever necessary.
- Seller reliability-based on fairness to organizational consumers in allocating items in high demand.
- Consistency of quality-being able to purchase items of proper quality on a regular basis.
- Delivery goals-minimized and stabilized length of time from order placement to delivery.
B. Price is only one of several considerations for organizational consumers. Usually, availability, quality, service, and so on is more important. Manufacturers stress quality standards and may want a variety of suppliers. Wholesalers and retailers are interested in salability and exclusive
buying arrangements (to limit competition).
Organizational Buying Structure
A. Organizational Buying structure refers to the level of formality and specialization used in the purchase process.
B. A firm’s buying structure depends on an organization’s size, resources, diversity, and format.
C. Manufacturers and wholesalers often have purchasing agents.
Organizational Constraints On Purchases
A. The major constraint on purchase behavior is derived demand.
B. Availability, ability to pay, financing availability, and risk are other constraints.
C. Government consumers are constrained by the budgeting process.
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