Module-2-Business Marketing-VTU

Organizational buying& buyer behaviour Module 2

The nature of organizational buying • The buygrid model • Buying situations – New task – Modified rebuy – Straight rebuy

• Phases in the purchasing decision process – Phase 1. Anticipation or recognition of a problem (Need) – Phase 2: Determination of the characteristics& quantity of needed item – Phase 3: Description of the characteristics& quantity of the needed item

– Phase 4. search for and qualification of potential sources – Phase 5. Acquisition and analysis of proposals – Phase 6. Evaluation of proposals and selection of suppliers – Phase 7. Selection of an order routine – Phase 8. Performance feedback& evaluation

• Overview of the buygrid – Creeping commitment – Center of gravity

• Marketing implications

Buying centers and multiple buying influencers • Identifying buying center members – – – – –

Marketing Manufacturing Research& development General management purchasing

• A model for determining the composition of the organizational buying center – Environment& mission – Purchase needs – Buy class/buy phase – Dollar value& complexity – Time commitment& life cycle – Buying center membership, procurement and other members

• Buying center objectives – Task-oriented objectives • Price • Services • Quality • Assurance of supply • Reciprocity

– Nontask objectives

Interpersonal dynamics of industrial buying behavior

• Purchasing’s influence on buyer behavior – – – – –

MRP (Material Requirement Planning) JIT (Just-in-Time) Centralized purchasing Buyer technology Marketing implications

• Buying center involvement and interaction patterns

• Joint decision making – Characteristics of the firm – Buying center interaction patterns • Vertical involvement • Lateral involvement • Extensivity • Connectedness

– Purchase situation influence – Organizational influence – Marketing implications

• Psychological factors influencing individual decision making – Differences in role orientation – Differences in information exposure – Perceived risk in the vendor selection process – Marketing implications

• Conflict and resolution in joint decision making – – – – –

Conflict-resolution strategies Coalition Power in conflict resolution Identifying power bases Marketing implications

• The buying committee • Suppler choice and evaluation – Supplier choice and qualifying process – Evaluating supplier performance • The categorical method • The weighted-point method • The cost-ratio method