Organizational Buying Case Study

Organizational Buying

9.1 Introduction

9.2 Objectives

9.3 Differences between Industrial Markets and Consumer Markets

9.4 Differences between Organizational and Consumer Buying

9.5 Buying Decisions in Organizational Buying Process

9.6 Organization Buyer’s Decision Making Process

9.6.1 Problem Recognition

9.6.2 Need Description

9.6.3 Product Specification

9.6.4 Supplier Search and Evaluation

9.6.5 Proposal Solicitation

9.6.6 Supplier Selection

9.6.7 Order and Post Purchase Evaluation

9.7 Factors influencing Organizational Buying Behavior

9.8 Webster and Wind model of Organizational buying behavior

9.9 The Sheth Model of Industrial buying

9.10 Summing Up

9.11 Model Examination Questions

9.12 Suggested Readings

There are several concepts within organization and its buying behavior, all of which is deemed important to make sure that an investment is done to receive maximum, multiple dividends. All of this and more is explained within this unit. By the end of the unit, people will be able to understand several concepts of organizational buying and some of the important concepts of consumer buying too; and all the phases enclosed along.

9.3 Differences between Industrial Markets and Consumer Markets

It is important to learn the types of markets and their common effect on people before getting involved within the concept of marketing or in this case, to understand organizational buying better. The analysis of the markets can be done on the base of product itself, or the end consumer or both at the same time. Consumer and industrial markets are the most common sight making a difference here, and are explained hereby:

Consumer Markets: The consumer markets are the markets available for products and services for the individuals for the use of their own or the family. There are several categories within which consumer goods fall under:

• Fast moving consumer goods: These are the high volume, low unit per value, fast repurchase goods always needed by market full of people: ready meals, beans baked, French fries, newspapers and soaps are the

A business having an ongoing relation with an office supply store will mean the pricing contracts and dedicated support personnel can end up making the relation much more beneficial to the business. An individual consumer is interested in making comparison between the prices of different companies, and does not base them over the vendor relationship.

9.5 Buying Decisions in Organizational Buying Process

The formal Organization makes buying by following the decision-making. First they establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and supplier and then assign an order to the reliable and professional supplier.

The characteristic features of organizational buyers are given below:

1. Consumer market is a huge and it has millions of consumers whereas organizational buyers are limited in number for most of the products.

2. Organizational buyers always make purchases are in large quantities.

3. They require Close relationships and service.

4. The Demand of the organizational buyer is mostly derived from the production and sales of buyers.

5. One can easily notice the Demand fluctuations. They are high as purchases from business buyers magnify fluctuation in demand for their